What Does ‘Financial Need’ Mean for Scholarships?

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What Does 'Financial Need' Mean for Scholarships (1)

Scholarships are generally provided to meritorious students who want to pursue higher studies but cannot afford the same. A scholarship is offered by a foundation, university, school etc. Scholarships may be offered in the form of reduced tuition fees but they may also cover other expenses such as flight tickets, books, monthly stipend etc. Have you ever wondered what Financial Need means for scholarships? Let’s find out.

What is Financial Need?

Financial need is basically the difference between cost and ability to fulfil the cost i.e. the institution’s cost of attendance (COA) and your expected family contribution (EFC). But first, understand what COA and EFC mean.

Cost of Attendance (COA)– The price of attending a specific institution. It includes more than just tuition such as room and board, books and supplies, transportation, etc. However, the COA is different for every institution you wish to apply to.

Expected Family Contribution (EFC)– This is the amount your family is expected to pay towards your education. This includes family size, taxed and untaxed income, family assets, amount of family members enrolled in school, etc.

Hence, the financial need for scholarships indicates COA – EFC and students are provided scholarships based on their financial needs. So here are the three typical ways in which you might qualify for the financial need for scholarships.

Specific Approach

In this scenario, the scholarship committee provides a level of income and will vary for different scholarships If your income is below that threshold, then you will be qualified for financial need. However, some scholarship providers may evaluate family income, if the income of your entire family falls below the approach. For example, if you have more than one parent or guardian, you’ll be required to add their income together to get your total annual household income. 

Self-Identification

Self-identification is another way that qualifies for financial needs. In simple words, if you or your family is unable to pay for your post-secondary education, then you are eligible for financial need. Scholarship applications that require self-identification for financial needs typically require an essay or statement describing your financial need. You may qualify for this if you fall under the following circumstances:

  • You live in a rented housing
  • Your family members are also pursuing post-secondary education
  • You have personal or family medical expenses 
  • You have only one earning member to support the expenses
  • You have faced personal or family financial challenges over the past years

Relative

Another common way to qualify as financial need is relative. In this situation, the scholarship committee will assess your education costs versus your ability to fund them. Your financial ability will be determined by various factors including:

  • Your total annual household income
  • Number of House members 
  • Necessary expenses/cost of living i.e. rent, groceries, utilities, etc

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Students have a big misconception that they do not qualify for scholarships based on their family’s income. But the definition of financial need is actually more flexible than what income range your parents’ finances fall into. Each scholarship has its own definition of financial need. For more such interesting updates, check out how to apply for scholarships to study abroad at Leverage Edu.

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