Scholarship Types: The 2 Most Common You Should Know First

Ever get lost in all the scholarship options out there? I’ve been there too, especially when helping Ronan and Lorelei figure out what’s even worth their time. People throw around words like “merit-based” and “need-based” all the time—if you don’t know the difference, you could miss out on money you didn’t even know you qualified for.

It’s not just free money either. Some scholarships are about your grades, talents, or crazy test scores. Others care more about your family’s financial situation. The key is matching yourself to the right kind, and you don’t want to send off dozens of applications blind. I’ll break down the two most common types right here, explain how they work, and share what I’ve learned about getting your name in the game. If you want school to be less expensive, paying attention to this stuff really matters.

• Why Knowing Scholarship Types Matters
• Understanding Merit-Based Scholarships
• The Basics of Need-Based Scholarships
• Application Tips for Each Type
• Mistakes to Avoid When Applying
• Finding the Best Fit for You

Why Knowing Scholarship Types Matters

If you want to save time and get real results when looking for scholarship types, understanding what’s out there makes a huge difference. Here’s the kicker: scholarships aren’t just for the straight-A crowd, and they’re definitely not all about being broke either. Different types open the door for all kinds of students—athletes, artists, kids from big families, or someone who just happens to live in the right zip code.

Most people waste energy chasing scholarships they’re not even eligible for. Colleges and private groups hand out billions every year, but a lot of that money goes unclaimed because students apply for the wrong type. According to the National Scholarship Providers Association, over $100 million in scholarship awards go unused each year—just because folks don’t know what fits them best.

Knowing about merit-based and need-based scholarships lets you play to your strengths. If your GPA is solid, you can go after academic awards. If your family income qualifies, you’ll find a whole other set of doors. Here’s where it really counts: matching up your situation before Monday morning—that way, you’re not stuck cramming for an application you don’t even need to fill out.

• It’s easier to create a focused list of scholarships to apply for.
• You’ll spend less time hunting, more time actually writing solid applications.
• Your chances of winning go up—because you’re actually what they’re looking for.
• You avoid frustration and missed deadlines from running in circles.

Bottom line? Figuring out which scholarship category you fit saves you energy, money, and time—a win in every way, especially when college bills are staring you in the face.

Understanding Merit-Based Scholarships

When most people picture scholarship types, this is the first kind that comes to mind. Merit-based scholarships are awards you get by proving you’re good at something—usually academics, but also sports, music, art, or community service. The point is, you don’t need to show financial need for these. Instead, you’re showing off your skills or achievements.

Let’s make it simple. If you’ve crushed your SAT or ACT, kept a solid GPA, or led the debate team to the state finals, you’re in the zone where merit-based awards could be yours. Major schools like Harvard and Stanford offer merit money, but so do local businesses, sports leagues, and foundations. I always tell Ronan—show off where you shine, because you never know who’s watching.

Here’s what you should know about these scholarships:

• Grades and test scores matter. Almost every merit-based program will ask for transcripts or proof of your scores.
• Special talents count too. Think art, music, robotics, even chess. Some scholarships are super specific.
• Application extras. Sometimes you’ll have to write essays, send videos, or get rec letters that highlight your talents.
• Not always a full ride. Lots of merit-based awards cover only part of your costs, but you can stack different awards.

Schools often automatically consider you for these if you apply for admission, but some awards require separate applications. Keep an eye out—don’t assume you’re done after hitting ‘submit’ on your college app.

Got a number for you—according to the National Center for Education Statistics, about 22% of undergrads in the U.S. get some kind of merit-based aid. So there’s real money on the table if you’re willing to put your strengths out there.

The Basics of Need-Based Scholarships

When you hear people talk about need-based scholarships, they mean money that goes to students who actually need help paying for school. These awards look at your family’s income, the number of people in your household, and sometimes other expenses that affect your bottom line.

To get started with most need-based programs in the U.S., you have to fill out something called the FAFSA—that’s the Free Application for Federal Student Aid. This form asks you about your family’s income, assets, and a few other things. Schools and the government use those answers to figure out if you qualify for aid like Pell Grants or state-funded scholarships.

There’s a common myth that you need to be flat broke to get a need-based award, but that’s not true. For example, in 2024, the average family income for Pell Grant recipients was right around $40,000. Some states set the bar even higher, so if you’re not sure, just apply anyway. You might be surprised by what you qualify for.

Some need-based scholarships come straight from colleges themselves. Others are run by nonprofits or local businesses—think community foundations or small-town charities. Each one will ask for proof of income, so have tax returns or other paperwork ready.

• Make sure you apply right away—deadlines sneak up fast, and money can run out.
• Double-check the documents you need, like W-2s or pay stubs.
• Don’t stop at the big federal programs; check your school and local organizations too.

If you’re stressed about sharing finances, know that this stuff is confidential. The goal here is to make college possible for anyone, no matter what your family’s wallet looks like.

Application Tips for Each Type

Getting a scholarship isn’t just about luck. You’ve got to know what each kind wants—and play to your strengths. Let’s talk details for both merit-based and need-based scholarships, so you actually boost your odds.

For merit-based scholarships (think: grades, sports, or special talents), committees want proof you’re the kind of student schools brag about. Here’s what to do:

• Build a brag sheet. List your best grades, AP classes, awards, and extracurriculars in one place. Admissions love seeing your hustle laid out clearly.
• Personalize each application. Don’t use the same essay or answers everywhere—show you know the group or school giving the award.
• Ask for strong reference letters. Coaches, teachers, or even that club advisor—pick people who can brag about you specific to what the scholarship celebrates.
• Meet deadlines, often to the minute. Some top merit awards, like the National Merit Scholarship, close super early—miss it and you’re out.
• Watch for test score cutoffs. Some scholarships still ask for SAT or ACT minimums, and even one point under can cost you.

"Don’t just list what you did—connect the dots on how you’ve grown and what you’ll bring to the table. Scholarship teams want stories, not just stats." — Lydia Lane, college admissions officer, 2024 panel at NACAC Conference

Now, need-based scholarships are about your wallet, not your GPA. Here’s the playbook:

• Fill out the FAFSA early. Most legit need-based scholarships start with this federal form. Missing it is like slamming the door shut on stacks of cash.
• Double-check income numbers with your folks. Even a small typo can bump you into a whole new eligibility range.
• Organize all financial records—tax returns, pay stubs, and even proof of weird expenses (like high medical bills) that might help explain your story.
• Look out for "last dollar" scholarships. These pay what’s left after other aid, covering what might slip through the cracks—including random fees or housing.
• Some colleges use the CSS Profile too. It digs deeper than FAFSA, so be prepared to answer more detailed questions if a school asks for it.

Here’s a quick comparison to keep it straight:

The little details matter. One slip—like missing a recommendation letter or entering a wrong date—and you might lose out. Read everything twice before submitting and don’t be afraid to check with the counselors. After all, every year there are millions left on the table just because someone missed a step.

Mistakes to Avoid When Applying

Even the smartest students still trip up on scholarship applications. I’ve seen it happen with friends’ kids and almost made a few of these mistakes with Ronan’s first try. If you want to stand out for scholarship types like merit-based or need-based, you have to know what not to do.

• Missing deadlines. This one feels so basic, but it trips up thousands every year. Most scholarships won’t accept late applications—no exceptions.
• Ignoring the directions. Every award has its own set of rules. If they ask for two essays and you send one, or you upload the wrong file type, it’s usually an instant disqualification.
• Recycling one essay for everything. You’ll sound generic if you do this. Scholarship committees notice. Tailor your application to each scholarship type—especially between merit-based and need-based options.
• Skipping financial aid forms. Some merit-based scholarships still want you to submit FAFSA, just in case. Not doing this can make you ineligible, even if you don’t plan to request government help.
• Forgetting to proofread. Grammar mistakes and typos are a dealbreaker for a lot of reviewers. Even a small error can create a bad impression—always double-check or have someone else read it over.
• Leaving out required documents. Recommendation letters, transcripts, personal statements—one missing piece and your application could end up in the trash. Always check the list before hitting submit.

According to the National Scholarship Providers Association, nearly 25% of applications are tossed due to missing materials or failing to meet requirements. That’s a lot of wasted effort. Remember, attention to detail is just as important as a great GPA or strong need when you’re after student aid.

Finding the Best Fit for You

So how do you sort out which scholarship types actually match your life, skills, and dreams? The first thing you’ll want to do is take a good look at yourself—your grades, activities, family situation, and even the state you live in. Not every scholarship fits every student, and the wrong ones are just a waste of your time.

Start by making two columns—one for merit-based, one for need-based. Write down your GPA, test scores, any clubs, sports, or leadership roles for the merit side. On the need-based side, list out your family’s income, how many people are at home, and any special financial situations (like a parent who lost a job). This lets you clearly see where you have the strongest case. If you’re a solid student but money is tight, don’t ignore need-based options—tons of them are out there.

One thing people miss: you can apply for both types! About 30% of students who get merit-based packages qualify for some kind of need-based help too. That’s a statistical fact from the National Center for Education Statistics, so don’t just put yourself in one box.

Here’s a fast way to get started:

• Use your school’s scholarship database (almost every guidance office runs one).
• Check out websites like Fastweb or the College Board's BigFuture—they let you sort by merit or need right away.
• Don’t forget local scholarships (community groups, local businesses, and even grocery stores offer some—seriously, Lorelei landed one from our neighborhood Rotary Club).

If you want a quick way to compare your chances, some schools show the average GPA or family income from last year’s winners. Here’s an example of how that might look:

Look at your current info and compare it with past winners—that’s how you know if a scholarship’s really right for you. Apply to a mix, keep your details organized, and set reminders for deadlines. The extra cash can absolutely add up, and finding the best scholarship types for you is the smart move.