Major Sources and Programs of Needs-Based and Scholarship-based Financial Assistance
Introduction
It is believed that financial assistance is mostly awarded to anyone in need of funds to cater for educational expenses this includes: tuition fees, accommodation, stationary and book supply. The word financial aid is a synonym for scholarship. Financial aid in general relates to scholarships and funding that is awarded to students so that they can cover their educational expenses. In most cases, need based grants are funded by the federal government. Each year the federal government allocates millions of dollars that is awarded students with low income. The government has set up the Federal Pell Grant that caters for families with students in schools that need financial support. This grant is offered to students in college, university or private schools. Financial aid is awarded in term of merit or need by different programs and sources
Merit Based
Merit based aid is granted by outside organizations, universities, colleges and post secondary institutions. The scholarships are awarded to students that have attained the maximum SAT and ACT scores (Blumenberg & Manville 2004). However, the Scholarship is not only limited to academic achievers but also acknowledges talent, leadership skills and other personal characteristics. These scholarships can be awarded to students with group affiliations that include Boys club, YMCA, The Scouts and Girl Guides among other affiliations. Merit scholarships are not based on the financial status of the student but the academic achievements and personal distinctiveness of the student.
Need Based
Need based financial aid specifically target students that are in want of funding for educational purposes. The United States governments and all states governments in the U.S, award scholarships according to the merit attained by students that are need based. Grants are inclusive of work-study and loans offered to the student. The eligibility of the students who merit and are granted scholarships is sourced from an application form that each needy student fills up. Alternative documents that are needed for the application include the family financial information. The lower the family income the higher the grant allocation.
Once you have determined the financial need. It is the role of the college or university you plan to attend to assign you with detailed information on sources that will meet your financial needs. Scholarship and grants is the money that is not to be paid back while on the other hand, loans are paid back to the funding institution. The government provides loans, grants, work-study programs, and scholarships. Colleges and universities provide need and merit based scholarships. In cases where the one needs more funds than what the financial aid is offering. It is his or her duty to seek an educational loan from a lending institution.(Blumenberg & Manville 2004).
Federal Grants
Financial assistance is classified into two; the scholarships and grants. Every year $168 billion is awarded for this course. This money helps in the college education awarded to students in need. In the United States, everyone is eligible to a federal scholarship or grant. In completion of the Free Application Federal Student Aid (FAFSA) and electronically submitting it, the form entitles one to be an eligible candidate for the next year. The application forms are available at the Department of Education as early as New Year before the summer falls. The form is later on submitted and updated with the family income information. On receiving each request from applicants, the Department of Education processes the documents and hands over to the government for allocation. On meeting the requirement, the grants are rewarded to suitable candidates. Apart from the Federal Pell Grant, a number of organizations deliver the same support to students. This includes the Academic Competitiveness Grant, SMART Grant and the TEACH Grant. The federal government equally has subsidized and unsubsidized loans that are refundable. Federal loans tender lower interests rates and have enhanced repayment conditions than other private money lending institutions.
University Scholarships
Most universities equally offer scholarships to students. The University of Virginia offers grants that are managed by the Student Financial Services. These grants were first reputable by foundations and individuals who had particular criteria for allocation. To meet the requirements for university-based allocations, students must acquire outstanding academic achievements. This is the most basic requirement backed up by the financial need (Riccobono & Research Triangle Inst. 1976).The university benefactor is responsible for awarding students who meet these criteria. The University has donor funds that are awarded to students with unidentifiable needs. A Virginia state citizen has higher chances of allocation than a non-citizen does.
Savings Plan
In section 529 of the internal revenue code, the government supports families to save more for college. It allows the families federal tax benefits, so that the student or his parent can save for college. The State College Savings Plan and the Prepaid Tuition Plan are two ways in which the federal government has put into place to allocate loans. College savings plans are not a guarantee but are supple. This form of savings plan is very common in the U.S today as huge sums of money are being invested for this course. For state residents and non-state resident the savings plan allows each group to know the repayment rate. The advantage to this way of saving is that despite the doubling of the fees, the parent is always at peace since his saving is still valid even after ten years. The prepaid tuition plans are managed by the government. If the student decides to attend a private institution, the plan pays the average state fees for the student
Millennium Bursaries
Alongside scholarships and grants are bursaries, Millennium Bursary Program is aimed at allocating funds to provinces and states. The bursary allocation targets students that are in the post secondary education. The bursary allocation is based on merit and not on need. The selection process is entirely dependent on the academic achievement of the students that have applied. It is however subjected to students that have not received prior allocation of funds for educational purpose. Besides the students’ allocation on merit terms, the program goes further and allocates bursary for students that have taken part in community development, that is; service to the community. Students with leadership and innovation qualities are also granted the bursary so that they may improve on their skills (University of British Columbia. 1979). Bursar allocation depends on other factors beside merit and outstanding qualities. In the Millennium Bursary program, one is required to be a resident citizen of any U.S government state and should at least be a fulltime student for a minimum of two years.
Volunteer Scholarships
The federal state government aid has put in place funds that are specifically awarded to volunteers. Scholarships for volunteers and community service are awarded to students that are offering their services to various institutions and organizations. It is a common trend for churches, hospitals, nursing homes, fraternal organizations and community service organizations to award the outstanding help from volunteers. Appreciation is awarded through scholarships and bursaries. The work- study program allocates 7% of its funds to pay students that are working within the community. The community service program includes jobs such as working as a tutor to reading children among other services in the community.
Military Aid
For students with an interest in the military, the financial aid has a designed source in which the students can acquire scholarships and grants. The Montgomery GI Bill is the main source for financial aid for military students. However, the source only covers three fifths of the tuition fee. This financial aid is only limited to citizens of the United States. Other several programs offer financial assistance to students who are interested in working with the U.S armed forces, but the Montgomery stands out. The Montgomery covers students that join the army, the navy, Marine Corps, air force and the coast guards. Funds act as an incentive to reward students that have chosen to join the force (Riccobono & Research Triangle Inst. 1976). The Bill provides students up to three years of education benefits.
Employee Tuition Assistance
The employer tuition assistance is a program in which the employer helps the employees to pay up for college. In these cases, funds received to cater for this course will be deducted from the income at an interest rate. The funds are tax-free and only cater for books supply, tuition, fees and equipment. These expenses are only incurred by the employee and not his spouse or dependents. The employer tuition assistance is restricted to the terms and conditions of the employer and not the federal government. The employer may ask the employee to work for the company for a certain period after completion of the program that he or she received funds. Apart from current employees, retired, disabled, laid off employees may benefit from this financial assistance.
College Partnerships
An articulation agreement or college partnership is a major source for need based and scholarship based financial assistance. The financial assistance carried out through college partnerships. This is an agreement between four-year colleges and community colleges to provide smooth transition for transfer students (Riccobono & Research Triangle Inst. 1976). In the agreement, the freshman is guaranteed that his educational requirements in the transfer institution will be satisfied. In this way, the student can save on tuition fee and pays lower rates in completion of the credits. With the discount in percentage of the tuition fee, a transfer student can save thousands of dollars by attending a community college for the first two years. This sort of agreement is limited to colleges within a specific geographical location.
References
Blumenberg, E., & Manville, M. (January 01, 2004). Beyond the Spatial Mismatch: Welfare Recipients and Transportation Policy. Journal of Planning Literature, 19, 2, 182-205.
Riccobono, J. A., & Research Triangle Inst., Durham, NC. (1976). Money and College: Differences in Ability and SES
University of British Columbia. (1979). Awards and Financial Aid Office fonds.
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