Need-based aid.
In plain English
Need-based aid is financial aid given because of demonstrated financial need rather than achievement. Your need is estimated by subtracting your Student Aid Index (from the FAFSA) from a school's cost of attendance. The result drives need-based help like the Pell Grant, subsidized loans, and federal work-study, plus many state and college grants. Need-based aid can include gift aid you don't repay (grants) and self-help aid (loans and work-study). It contrasts with merit aid, which rewards achievement and ignores income.
01Why it matters
Need-based aid is the main reason a lower-income student can attend a school whose sticker price looks impossible; filing the FAFSA is what opens the door to it.
02The math, step by step
A school's cost of attendance is $30,000 and a student's Student Aid Index is $2,000, so their estimated need is $28,000. The school builds an offer toward that gap using need-based pieces: a Pell Grant, a subsidized loan, and work-study, alongside any of its own grants.
03What this is NOT
Need-based aid is not awarded for grades or talent. It depends on your family's finances and your Student Aid Index. A student with top grades but high family income may get little need-based aid, while a lower-income student with average grades may get a lot.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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