How do need-based scholarships work?

I'm starting to think about how I'll pay for college, and I've heard a lot about need-based scholarships. Can someone explain how these work? Do they cover the full tuition or just part of it? I'm trying to figure out if they'd be relevant for me and what steps I'd need to take to potentially qualify for one.

Need-based scholarships are a type of financial aid that colleges and other organizations award to students based on their family's financial circumstances. These scholarships are designed to fill the gap between your family's ability to pay (measured by your Estimated Family Contribution or EFC, now known as Student Aid Index or SAI) and the total cost of attendance at a college.

The amount you receive can vary widely. Some scholarships may cover the full cost of tuition, room and board, and other expenses, while others might only cover a part of these costs. It all depends on the specific scholarship and the college. For example, Harvard University offers full-ride scholarships to students from families that earn less than $85,000 annually.

To be considered for need-based scholarships, you typically need to complete the Free Application for Federal Student Aid (FAFSA). This form collects information about your family's financial situation, including income, assets, and number of children attending college concurrently. After you submit the FAFSA, you'll receive your SAI, a figure that colleges use to determine your financial need.

Remember, need-based scholarship policies can vary by school. Some schools meet 100% of demonstrated need with a combination of grants, loans, and work-study, while others may not. Private and state schools may also have different calculation methods to work out your need-based aid, so research each college's financial aid policy individually.

Additionally, there may be separate applications or processes for institutional or external need-based scholarships, so it's important to research each scholarship's specific requirements carefully and don't hesitate to reach out to the financial aid office if you have questions.