Glossary · Financial Aid
Institutional Aid
Grants and scholarships funded directly by the college or university from its own endowment or operating budget, as opposed to federal, state, or outside sources. Institutional aid is the largest single source of financial aid at most private universities.
What it means
Institutional aid is the money the school controls. Federal aid (Pell, SEOG, Direct Loans) comes from the government. State aid comes from state programs. Outside scholarships come from private organizations. Institutional aid comes from the school itself, which means the school decides who gets it, how much, and under what conditions.
At wealthy private schools, institutional aid dwarfs everything else. Princeton’s average institutional grant exceeds $60,000 per year. Vanderbilt’s is over $50,000. These schools fund institutional aid from multi-billion-dollar endowments. At less-endowed schools, institutional aid comes from tuition revenue, which means one student’s discount is funded by another student’s full-price payment.
Institutional aid can be need-based (calculated from FAFSA/CSS), merit-based (calculated from academic performance), or both. Most private schools blend the two. The mix matters because need-based institutional aid can change year to year as family income changes, while merit-based institutional aid typically renews at a fixed amount as long as the student maintains a GPA threshold.
Worked example
A student at Emory receives $35,000 in institutional need-based grants and $15,000 in an Emory Scholar merit award. Both are institutional aid funded by Emory. The need-based portion ($35,000) will be recalculated each year based on the family’s updated FAFSA and CSS filings. The merit portion ($15,000) renews at the same amount as long as the student maintains a 3.0 GPA. If the family’s income increases by $20,000 next year, the need-based portion might drop to $28,000 while the merit portion stays at $15,000.
Related terms
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