There are two types of financial aid. One is called merit-based aid. Merit based aid doesn’t have anything to do with your family’s finances. It is awarded based on how good you are at something, like music, science, or athletics. Scholarships are usually an example of merit-based aid. Merit-based aid usually doesn’t have to be paid back, though sometimes there are restrictions or conditions on the award.
The other type is called need based aid. The amount of need-based aid you receive depends on how much you and your family can afford to pay towards your educational expenses. Generally, both students and their families are expected to help pay. This amount you and your family should be able to pay is called the Expected Family Contribution, or EFC.