Basically all scholarships are competitive. Scholarships are to award something about the student like high academic stats, musical talent, leadership, community service. Some scholarship grantors also want their awards to go to low income students, so that’s a factor. Coca cola, for example, goes to high achieving students who have financial need but yes, it’s competitive.
Low income students without the other talents usually are looking for need based financial aid. Most need based FA come from or through the college itself. If you can get into the school based on your academics (competitive), you’ll apply for FA and the school will organize federal aid, loans, state aid, any aid the school has to award to its students. Some schools have a lot of aid, some very little.
Questbridge is a program to help students get into schools. I think the schools then give the financial aid needed.