What type of federal funding is free money but is based on financial need only?
a) Federal grants
b) All federal scholarships
c) The 529 Plan
d) None of these are correct
Answer:
The type of federal funding that is free money based only on financial need is federal grants, such as the Pell Grant, which do not require repayment. Students must complete the FAFSA to determine eligibility for these grants.
Explanation:
The type of federal funding that is free money and is based on financial need only is a) Federal grants. Federal grants, such as the Pell Grant, are designed to support students who demonstrate financial need and do not have to be repaid, making them a form of free money for eligible students. To determine eligibility for these grants, students must complete the Free Application for Federal Student Aid (FAFSA) provided by the United States Department of Education, which assesses the student’s financial situation.
Federal grants are part of the federal government’s efforts to make education more accessible and are separate from scholarships, student loans, and work-study programs, which have different eligibility criteria and conditions. Moreover, the 529 Plan is a savings plan for future college costs and is not considered free money, as it involves investing funds that have already been taxed.