The term â€œfinancial aidâ€ is used in many contexts these days. Educational institutes use this term for helping out the needy students in their finances so that they can pursue their studies without any financial problem. Countries use this term for giving some finance to the poor countries. But in the long run, this term is particularly referred to an award which is given to some specific individuals.
Financial aid helps students to meet their college expenses in a much better way. There are certain terms and conditions in order to take advantage from the financial aid. There are many sources from where this financial aid can be obtained such as corporations, federal and state agencies, high schools, colleges and foundations. The amount of aid provided depends upon various factors. These factors include the current financial situation of the student, the level he is studying in and the monthly expenses of his education. The difference between educational loan and financial aid is that loan has to be repaid after a specific period of time whereas aid does not require any repayment. In some countries, financial aid is provided in two categories i.e. need based financial aid and merit based financial aid. As the name suggests, need based financial aid is specified for those students who cannot afford that much money to fulfill their educational expenditures but they really want to get education. Merit based financial aid is given to those students who perform extraordinarily well in their academic career. Merit based financial aid encourage the students to work even more hard in the future. The allocation of financial aid must be handled with complete management so that the students who are actually in need of some financial aid can get better advantage from that.