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Need-Based vs Merit-Based Scholarships in the USA, What's the Difference and Which Should You Apply For?

For many international students, studying in the United States is a dream come true. Tuition, housing, health insurance and other living costs, however, can be costly when studying abroad. Fortunately, numerous American universities have scholarships available to help ease these expenses.

By studybeyond Author

Published July 15, 2026

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As you begin your search you’ll find there are two types of scholarships: merit scholarships and need-based scholarships. Both give monetary assistance, but for different reasons. Recognizing these differences can help you select the right opportunities and boost your financial aid prospects.

In this guide, we will discuss need-based vs merit-based scholarships USA international students in simple terms. You will find out how each scholarship operates, who is eligible, the pros and cons of each, and which one might be right for you and your academic objectives.

Before applying for your scholarships, take a look at our guides to studying in the USA and the requirements for university admission to strengthen your application.

What You'll Learn

  • What Are Need-Based Scholarships?
  • How Do Need-Based Scholarships Work?
  • Can International Students Apply for Need-Based Scholarships in the USA?
  • What Is Institutional Aid?
  • Advantages of Need-Based Scholarships
  • Challenges of Need-Based Scholarships
  • Who Should Apply for Need-Based Scholarships?
  • Quick Comparison: Need-Based Scholarships
  • What Are Merit-Based Scholarships?
  • How Merit-Based Scholarships Work
  • Benefits of Merit-Based Scholarships
  • Challenges of Merit-Based Scholarships
  • Merit Scholarship vs Financial Aid USA
  • Need-Based vs Merit-Based Scholarships USA International Students
  • Write a Strong Personal Statement
  • Meet English Language Requirements
  • Scholarship Renewal Requirements
  • Quick Comparison Table
    Which Scholarship Should You Apply For?
  • How to Build a Strong Scholarship Application
  • Submit All Required Documents
  • How to Win a Merit Scholarship at Ohio State for International Student
  • Common Mistakes Students Should Avoid
  • Conclusion
  • FAQS

What Are Need-Based Scholarships?

Need-based scholarships are awards of money to students who show that they are unable to pay the full cost of their education. These scholarships are merit based and not based on a student’s or family’s financial status.

Financial documents are submitted to the University for review to determine eligibility for assistance. They may offer a partial or full financial contribution if they believe that a student has substantial financial need.

These scholarships are designed to provide an opportunity for talented students to attend college without financial concerns.

How Do Need-Based Scholarships Work?

Each University has a different method of determining financial need. Students typically will need to provide documentation of their family’s income, assets and general financial situation.

Several colleges determine the difference between what a family can afford and what the expenses are. This gap is known as financial need and the amount of the scholarship may be determined by this.

Financial need can encompass:

  • Tuition fees
  • Accommodation costs
  • Meal plans
  • Students will be provided with books and study materials.
  • Health insurance
  • Personal expenses
  • Transportation

The more financial need, the more the potential amount of the scholarship

Can International Students Apply for Need-Based Scholarships in the USA?

This is a very common query students pose. ‘’Can international students apply for need-based scholarships in the USA?’’ Yes, but there are fewer opportunities as compared to U.S. citizens and permanent residents.

Federal financial aid is usually awarded to domestic students only, and many universities reserve institutional aid  for domestic students. There are, however, several private universities and colleges that offer financial assistance to the international students as an institution.

Some universities even are need-blind for some students when making admissions, and some universities are need-aware, which means that the financial need of a student may be taken into account in the admission process.

Since each institution has its own scholarship policies, international students are advised to always review each university’s scholarship page before applying.

FAFSA Eligibility International Students

Since each institution has its own scholarship policies, international students are advised to always review each university’s scholarship page before applying.

The Free Application for Federal Student Aid (FAFSA) is generally available only to:

  • U.S. citizens
  • Permanent residents
  • Eligible non-citizens

The vast majority of international students cannot receive federal financial aid through FAFSA.

Rather, universities can require international students to provide their own financial paperwork or fill out forms like the CSS Profile or institution-specific financial aid applications.

That is why it is important to know each university’s financial aid process thoroughly before applying.

What Is Institutional Aid?

While searching for scholarships, you may come across one term that you’ll need to understand: institutional aid.

Institutional aid is money provided by a college or university, not the U.S. government.

This assistance can take the form of:

  • Need-based grants
  • Merit scholarships
  • Tuition discounts
  • International student scholarships
  • Special academic awards

Education expenses can also be lowered considerably by institutional aids, particularly at the universities that are actively pro-international students.

Advantages of Need-Based Scholarships

Students who are in need of a scholarship have a few benefits.

They Make Higher Education More Affordable

The main benefit is that students are allocated funding according to their need and thus are able to access quality education.

They Reduce Student Debt

Students who receive scholarships will take out less money with an education loan.

They support equal educational opportunities

In addition to the fact that these scholarships are awarded to students from different financial backgrounds to attend the respected universities, they also provide assistance to those who can’t afford to do so.

They Can Cover More Than Tuition

There are additionally some scholarships that are awarded on a need basis which also cover housing, books, meals and other education costs.

Challenges of Need-Based Scholarships

While these scholarships offer much support, they have some restrictions.

Limited Availability for International Students:  Significant need-based funding is available at selected universities for international students.

Financial Documents Are Required:  Applicants typically are required to submit detailed documentation of their family income and financial situation.

Funding Is Competitive:  These scholarships are very competitive, as many qualified students apply every year.

Who Should Apply for Need-Based Scholarships?

Need-based scholarships may be a good option if:

  • Your family’s income is limited.
  • It would be hard to pay full tuition.
  • You have solid academic capacity and financial limitations.

You are applying for institutional aid at universities that accept international students.

Students are advised to read carefully the financial aid policy of each university to understand the condition and availability of financial aid.

Quick Comparison: Need-Based Scholarships

Need-Based Scholarship Overview

← Swipe to see full table →

Feature Need-Based Scholarship
Based On Financial need
Academic Performance Required Helpful but not always the main factor
Income Documents Required
Available for International Students At selected universities
Can Cover Tuition, housing, books, and living expenses
Highly Competitive Yes

What Are Merit-Based Scholarships?

The merit-based scholarships are based on achievement and not financial need. These scholarships are awarded to universities to recruit high caliber students with a strong academic, athletic, leadership, community service, research, or other extracurricular achievements.

Merit scholarships are some of the best ways that international students can lower the cost of their studies in the United States, for many. Excellent grades or outstanding achievements are the requirements for these awards, and they may be awarded to applicants without financial need.

There are a number of American universities that automatically accept eligible applicants for merit scholarships, and others that require an application for a scholarship.

How Merit-Based Scholarships Work

The selection criteria for each of the universities is different, but most of them assess the students on their profile.

The following are some of the common factors:

  • High GPAs or academic achievement
  • High SAT or ACT scores (if applicable)
  • IELTS, TOEFL or Duolingo English Test score.
  • Leadership experience
  • Volunteer/community service
  • Sports achievements
  • Research projects
  • Creativity or artistic ability
  • Personal statement or scholarship essay

It’s not always necessary for a student to be top-notch in every aspect. Some scholarships are based on academic achievement, others on leadership, innovation, etc.

Benefits of Merit-Based Scholarships

There are a number of benefits for students from abroad in receiving a merit scholarship.

Reward Academic Excellence

Pupils who have worked hard during their school experiences may be given financial support, depending on their achievement.

Available at Many Universities

International students can find merit scholarships at more colleges than need-based scholarships.

No Financial Proof Required

The majority of merit scholarships will not ask for family income documentation since the selection process is not based on financial need.

Improve Your University Profile

Being awarded a competitive scholarship also enhances your academic record, and may open up future opportunities, internships, and graduate programs.

Challenges of Merit-Based Scholarships

Merit scholarships are very desirable but they have their pros and cons.

Strong Competition: These scholarships are highly competitive and thousands of high achieving students apply every year.

High Academic Expectations: A number of scholarships will expect students to have a minimum GPA throughout the course of their studies, and won’t renew the scholarship if they don’t.

Limited Number of Awards: Typically, universities do not have an unlimited scholarship budget and many applicants do not qualify for a scholarship.

Merit Scholarship vs Financial Aid USA

Students often believe that scholarships and financial aid are synonymous, but they are not.

Here is a simple explanation.

Merit Scholarship vs Financial Aid Comparison

← Swipe to see full table →

Basis Merit Scholarship Financial Aid
Awarded For Academic or personal achievements Financial need
Family Income Usually not considered The main factor
International Students Often available Limited availability
Ongoing Requirement May require maintaining a GPA May require updated financial documents every year

In simple words:

Merit scholarships are based on your accomplishments.

Financial aid is provided to students who are not able to pay for college expenses.

Some universities even offer both types of support, with merit scholarships added to any institutional funding provided to the student if they qualify.

Need-Based vs Merit-Based Scholarships USA International Students

You have to decide which of these scholarships will suit your needs.

Choose Need-Based Scholarships If:

  • Your family has limited financial resources.
  • It is tough to pay tuition.
  • You satisfy the requirements for financial aid of the university.
  • The University provides institutional support for international students.

Choose Merit-Based Scholarships If:

  • You have excellent grades.
  • You have experience as a leader.
  • You have a solid involvement in extracurricular activities.
  • You took English language tests and performed well.
  • Have won competitions or academic awards.

There are some students who can qualify for both and that can help them save a lot of money to study in the USA.

Many students ask: How do you actually qualify for scholarships in American universities?

While each college is unique, these are some of the steps you can take to increase your odds of being accepted.

Maintain Excellent Academic Performance Your GPA is one of the initial things that the universities check. Good marks are the sign of consistent effort and commitment

Write a Strong Personal Statement

In your essay you should explain:

  • Your academic goals
  • Career ambitions
  • Why you chose the university
  • Your achievements
  • How the scholarship will help you

Avoid generic statements. Use examples from your academic experience and future plans.

Participate in Extracurricular Activities

Universities appreciate students’ out-of-classroom contributions.

Examples include:

  • Student leadership
  • Community service
  • Volunteer work
  • Sports
  • Debate competitions
  • Science fairs
  • Research projects

The activities enhance your scholarship application.

Obtain Strong Recommendation Letters

Letters from teachers, professors, or school counselors can enhance your application.

Select recommenders who know you thoroughly, and are able to cite specific instances of your accomplishments.

Meet English Language Requirements

At most American universities, it is necessary to demonstrate proficiency in English.

These are some of the commonly accepted tests:

  • IELTS
  • TOEFL
  • Duolingo English Test
  • IELTS Academic (at the majority of universities)

A higher score may enhance your chances of getting accepted to a scholarship.

Apply Before the Deadline

A great deal of scholarships are closed months before classes start at college.

Early applications provide access to more scholarships and ample time to craft a robust application.

Scholarship Renewal Requirements

Earning a scholarship is just the first step. At many universities students are expected to re-enlist annually under certain conditions.

Some common scholarship renewal requirements include:

  • Participating in school activities and events
  • Ensuring completion of a sufficient number of credit hours to meet requirements.
  • Following the university’s academic policies
  • Continuing to attend school on a full-time basis
  • Meeting attendance requirements
  • Avoiding academic misconduct

Scholarship monies will be reduced or eliminated if students do not satisfy these conditions.

Be sure to check the policy for renewal of any scholarship before accepting an offer.

Quick Comparison Table

Need-Based vs Merit-Based Scholarship Comparison

← Swipe to see full table →

Feature Need-Based Scholarship Merit-Based Scholarship
Based On Financial Need Academic or Personal Achievement
Family Income Considered Yes No
Academic Excellence Required Helpful Very Important
Financial Documents Needed Yes Usually No
Available for International Students Limited Widely Available
Competitive High Very High
Renewal Conditions Financial & Academic Mostly Academic Performance

Which Scholarship Should You Apply For?

Once you know about the two categories of scholarships, you might still be left wondering: “Which is the better choice”? It depends on your grades, budget and the schools you are applying to.

There’s no one-size fits all. Some students are eligible to receive only merit based scholarships, and some may receive merit and need based scholarships. Sometimes students may choose to get both types of support from the same university.

It is best to research carefully the opportunities for scholarships available at each of the universities that you are interested in attending before submitting an application.

Select Need-Based Scholarships.

If you qualify for a need-based scholarship, you should consider applying for one if:

  • You have low income.
  • Paying tuition and living expenses would be difficult.
  • You can provide financial documents when requested.
  • International students are entitled to institutional financial aid.

If your circumstances fall within these categories, there is a chance that a need-blind scholarship will save you a lot of money in college.

If you are interested in Merit Based Scholarships, then...

If the merit-based scholarship is the better option, consider it if:

  • You have an excellent GPA.
  • Have been awarded school honors.
  • You have leadership experience.
  • You actively participate in extracurricular activities.
  • Your English language test scores are high.
  • You are involved in sports, research or community activities.

Many American universities offer partial or full tuition scholarships to those students who have good academic records.

Can You Apply for Both Scholarships?

Yes. To increase the likelihood of getting financial aid, many international students apply for need-based scholarships and merit-based scholarships.

This means that some universities automatically accept students who apply for merit scholarships and also request them to apply for need-based scholarships.

It is generally the most advantageous approach to apply for both.

But it is important to review the scholarship requirements and rules thoroughly as each university has its own rules and policies about scholarships and financial aid.

How to Build a Strong Scholarship Application

Getting a scholarship isn’t just about your grades. The complete profile of universities is reviewed to understand your potential and goals.

Here are a few tips that will help make your application stand out.

Focus on Academic Excellence

Your academic history is a crucial element of your application.

Keep a good GPA from previous education or high school. If your university requires standardized test scores, try to get high scores on exams like the SAT or ACT.

Having achieved good academic results demonstrates your ability to face the rigors of a demanding college environment.

Write a Personal Statement That Tells Your Story

Your personal statement should go more than listing your achievements.

Explain:

  • Why you want to study in the USA.
  • What is your motivation for choosing your field.
  • What you would like to do in the future.
  • What you like about yourself.
  • How the scholarship will help you achieve your dreams.

Avoid using general statements, but use clear, honest, personal examples instead. Real stories about your motivation and character are welcome to the admissions officers.

Highlight Leadership and Community Involvement

At American universities, students are appreciated for their positive contributions outside of the classroom.

Incorporate experiences like:

  • Leading student clubs
  • Organizing school events
  • Volunteering in your community
  • Making a difference in the world through volunteer work
  • Mentoring younger students

These activities are a true display of responsibility, teamwork and leadership.

Submit All Required Documents

Make sure all documents are complete prior to submitting application.

These are the most common documents used for scholarships:

  • Academic transcripts
  • The achievement of students in the English language test scores will be included.
  • Recommendation letters
  • Personal statement
  • Financial documents (for need based scholarships)
  • Cover Letter (if requested)

Lack of documents may slow down your application or render it ineligible for consideration.

Apply Early

A number of scholarships are partially funded.

The earlier your application is submitted, the better you plan and the more time the admissions team has to look at your file. Many universities also have rolling scholarships, meaning that the earlier you apply, the higher your likelihood of being awarded a scholarship.

How to Win a Merit Scholarship at Ohio State for International Students

Many students ask: How to win a merit scholarship at Ohio State for international students?Here is the answer.

Maintain Outstanding Grades

One of the top criteria for merit scholarships is academic achievement. Good grades in all courses throughout high school and/or previous courses enhance your application.

Demonstrate Leadership

You can increase the competitiveness of your profile by adding leadership experience. Activities that demonstrate that you are taking part beyond the classroom environment include student councils, volunteer opportunities, clubs, and community involvement.

Submit a Complete Application

See that all necessary paperwork is correct, complete, and submitted on time. Incomplete applications may lessen the likelihood of your being named for scholarships.

Achieve English Language requirements

English test scores can enhance your application and show that you are prepared to pursue English-medium academic studies.

Research Scholarship Opportunities

Check the university’s official scholarship website for the full details on eligibility, application deadlines, and whether or not scholarship applications will be required or available at the time of admission.

Keep in mind that the requirements for scholarships vary from year to year, so be sure to use the most up-to-date information available from the university.

Common Mistakes Students Should Avoid

Many qualified students miss scholarship opportunities because of avoidable mistakes.

Avoid these common errors:

  • Applying after the scholarship deadline.
  • Ignoring eligibility requirements.
  • Writing a generic personal statement for every university.
  • Providing incomplete financial information.
  • Uploading incorrect or outdated documents.
  • Failing to proofread the application.
  • Not checking scholarship renewal conditions.

Applying only for one scholarship instead of exploring multiple opportunities.

Taking extra time to prepare a complete and accurate application can significantly improve your chances of success.

Expert Tip

A lot of high-achieving students don’t get scholarships due to preventable errors.

Try not to make these mistakes:

  • Applying after the scholarship deadline.
  • Ignoring eligibility requirements.
  • Writing a common personal statement for all universities.
  • Providing incomplete financial information.
  • Uploading wrong or outdated documents.
  • Failing to proofread the application.
  • Not checking scholarship renewal conditions.

Only applying to one scholarship rather than exploring a number of opportunities.

It can make a huge difference in your odds of success to take extra time to make a thorough and accurate application.

FAQS

Q1: What is the difference between need-based and merit-based scholarships?

Need-based scholarships are awarded based on a student’s financial circumstances, while merit-based scholarships are granted for academic excellence, leadership, athletic achievement, or other outstanding accomplishments.

Q2: Are there any need-based scholarships for international students in the USA?

Yes. Some U.S. universities offer need-based scholarships and institutional financial aid to qualified international students who demonstrate financial need.

Q3: Do international students qualify to apply for FAFSA?

No. Most international students are not eligible to apply for FAFSA. However, they may still qualify for university-funded scholarships, grants, and other forms of institutional financial aid.

Q4: What qualifications do I need to qualify for scholarships in the USA?

To improve your chances of receiving a scholarship, maintain strong academic performance, write a compelling personal essay, meet all eligibility requirements, and submit your application before the deadline.

Q5: What is institutional aid?

Institutional aid is financial assistance provided directly by a college or university. It may include scholarships, grants, tuition discounts, and other forms of funding to help reduce the cost of education.

Conclusion

The first step to making higher education more affordable in the United States is to understand the difference between need-based vs merit-based scholarships USA international students.

Rather than blindly apply to every college and university, take time to research various universities, compare the available scholarships, and determine which ones best suit your academic work and financial situation. With a well-thought out application strategy, you’ll be more likely to win some great monetary assistance.

If you’re applying for a merit scholarship, institutional scholarships or need-based funding, the secret to getting it is preparation. Begin looking for scholarships early, prepare paperwork, craft a strong personal essay, and apply for all scholarships by their deadlines.

It is possible and attainable to attend a university in America with determination and careful planning.

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