Need-based grants are awarded based on demonstrated financial need and, like scholarships, do not have to be repaid. While many need-based grants are available through government programs, they are not the same as government loans. Fundamentally, college grant definitions set them apart from monetary loans, however, some grants do come with terms that, once violated, can convert the grant to a loan. For example, if the educational program is not completed or the student does not remain enrolled for duration of time specified in the grant, they may be required to repay some or all of the grant amount. Need-based grants are also available from nonprofit organizations and other private funding sources.
The amount of funding awarded through a need-based grant program can vary depending on a number of factors. Award amounts may be affected by the amount of funds available to the program, which can fluctuate from year to year, as well as a student's documented, unmet financial need and income status. Awards may range from $1,000 or less to a full tuition grant, depending on the cost of an education at the institution in question. Need-based grants are available for almost every level of study, from vocational school to graduate programs.
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Benefits of an Online Degree
The benefits of earning a degree online can be life-changing, especially for low-income students. Recent studies cite numerous advantages for online students in academia today, with more than three million students enrolled in fully online programs and six million taking at least one class online. Many students who continue to seek out online degrees over traditional programs can enjoy a wider variety of courses, improved communication skills, and greater convenience and flexibility, not to mention a significant savings on tuition and other costs. Online programs are generally less expensive than those completed on campus, and typically offer much of the same need-based financial aid that is available to traditional students. Many employers prefer candidates who are graduates of an online program for their enhanced practical job skills, and some may even provide financial assistance to qualifying students for job-related coursework. Need-based financial aid is also widely available to veterans, working adults, single parents, minorities, and other groups who stand to benefit from enrolling in an online program.
Grants vs. Loans
Of the several notable differences between grants and loans, the most significant concerns the repayment obligations for the two types of awards. A college grant by definition does not have to be repaid, while a loan does require repayment. Need-based financial aid in the form of need-based scholarships and grants is also typically exempt from accumulating interest or fees, while loans do include additional costs, as determined by the issuer of the loan and the terms of the agreement. Grants always require a FAFSA application for eligibility, and are open only to U.S. residents, while these particular requirements vary and may be more flexible for loan-seekers. Both grants and loans include a limit on the amount of money a student can receive per award.
Eligibility Requirements
The eligibility requirements for need-based grants are primarily focused on a student's financial situation and the amount of funding they receive for college. Applying for a need-based grant begins with submitting the Free Application for Federal Student Aid(FAFSA), if the grant is government-funded. Privately funded grants have other income verification requirements, which may or may not depend on FAFSA application status. Some grants disqualify students who are also receiving funding from other sources, are over a set income threshold, or who already have a college degree. Additionally, students must be a U.S. citizen or legal resident to be eligible for most need-based college grants. Perhaps the most well-known need-based grant, the Federal Pell Grant, can award up to $5,500 per academic year.