The type of federal funding that is "free money" based on financial need only is primarily the federal grants, with the Federal Pell Grant being the most well-known example. These grants do not have to be paid back as long as the recipient meets the necessary conditions, and they are awarded based on demonstrating financial need through applications such as the FAFSA.

Key Types of Free Federal Financial Aid Based on Need

• Federal Pell Grants : Awarded to undergraduate students with exceptional financial need. The amount depends on financial circumstances, cost of attendance, and enrollment status. It does not have to be repaid unless the student withdraws from school early.

• Other Need-Based Grants : There are other federal grants like the Federal Supplemental Educational Opportunity Grant which also target students with exceptional financial need.

Characteristics of Need-Based Free Money

• The aid is disbursed as grants or scholarships that do not require repayment.
• Eligibility is primarily determined by the financial need demonstrated through the Free Application for Federal Student Aid (FAFSA).
• Unlike loans or work-study, these funds do not accrue debt or require repayment.

In summary, the federal grants, especially the Federal Pell Grant, are the "free money" types of federal aid strictly based on financial need that do not have to be paid back if conditions are met. Other financial aid forms such as loans must be repaid, and work-study involves earning money rather than receiving it free.