Understanding Financial Need for Scholarships

I've been hearing a lot about scholarships that are based on financial need, and I'm a bit confused about what exactly qualifies as 'financial need' for these. I know it involves income and family situation, but are there specific thresholds or criteria that determine this? How do schools or scholarship organizations evaluate whether someone has financial need? Any tips on how to prepare or present this information would be super helpful!

Financial need is typically calculated through a process that considers various factors that include your family's income, assets, the number of children in your family who are attending college simultaneously, and the cost of attending the intended college. This need is often defined by the cost of attendance (COA) of a school minus the Expected Family Contribution (EFC).

However, note that the EFC has been replaced with the Student Aid Index (SAI) in the calculations for federal financial aid as of the 2024-2025 cycle. The SAI can be as low as negative $1,500, and it is not divided based on the number of students in college within a family.

Scholarship organizations and schools evaluate someone's financial need by reviewing the details provided in the Free Application for Federal Student Aid (FAFSA). The FAFSA is a form that you fill out annually to determine your eligibility for financial aid. Information from tax returns, W-2 information, other income and assets are used to calculate the SAI.

To prepare and present this information effectively, make sure to fill out the FAFSA accurately and submit it as early as possible because some financial aid is awarded on a first-come, first-served basis. You could also reach out to the financial aid office of the schools you are applying to for additional guidance as they may have their calculations for financial aid.

Furthermore, keep in mind that some private scholarships have their own application processes to determine financial need. You will have to provide them with necessary details similar to the FAFSA for a comprehensive review.

Lastly, it's worth noting that financial need can vary significantly from one institution to another. If the COA of the school is high, you might qualify for more need-based aid even if your SAI is moderate or high. Always confirm via a school's Net Price Calculator, which will give you an estimate of your potential financial aid package from them.