Scholarships in the United States
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A scholarship is defined as a grant or payment made to support a student's education, awarded on the basis of academic or other distinction. "Scholarship" has a different meaning in the United States than it does in other countries, with the partial exception of Canada. Outside the U.S., scholarship is any type of monetary award to fund education. In the United States, the only country with a national system that determines a student's financial need (see Expected Family Contribution),[1] and where universities are far more expensive than in other countries, a scholarship is money for which the student must qualify in some way, and the term "grant" - an award the student receives because of financial need - is used for what in other countries are called scholarships.
Scholarships in the U.S. are awarded based upon various criteria, which usually reflect the values and purposes of the donor or founder of the award. Some scholarships for college are merit-based. Merit scholarships might be awarded based on academic achievement or on a combination of academics and a special talent, trait, or interest. Other scholarships are based on financial need.[2] Scholarship money is not required to be repaid.[3] Scholarships are not a large component of college financial aid in the United States; they are far surpassed by grants, for which the only qualification is financial need, interest-free loans (while the student is in college), and subsidized campus employment.[4] (See Student financial aid in the United States.) A student who receives a scholarship may find other (need-based) financial aid reduced by the amount of the scholarship, so the net benefit of the scholarship to the student — especially the poor student — may be zero.
In the U.S., a grant is given on the basis of economic need, determined by the amount to which the college's Cost of Attendance (COA)[5][6] exceeds the Expected Family Contribution (EFC),[7] calculated by the U.S. Department of Education from information submitted on the Free Application for Federal Student Aid (FAFSA) following formulas set by the United States Congress. (The federal EFC is sometimes modified, usually upwards, in awarding non-federal grants.) The federal Pell grant program[8] is an entitlement: if the applicant meets the requirements - has economic Need (COA exceeds EFC), is studying at least half time towards a first undergraduate degree, is a U.S. citizen or eligible alien - the award of the money is automatic. The student has a right to it (is entitled).[9]
In some cases obtaining scholarships does not help the student or her/his family. Scholarships reduce financial need, and the amount of the scholarship can cause need-based aid, which the student would have received anyway, to be reduced by the amount of the scholarship.[10]