The Basics on Grants and Scholarships
Financial aid is money lent or given to you to help you pay for college. Grants and scholarships are kinds of financial aid that you don’t have to pay back. That’s why they’re called gift aid.
All kinds of students get gift aid. Most grants are awarded based on financial need, but a good portion of gift aid is awarded for academic achievement.
If you’re thinking about going to college, you should definitely apply for grants and scholarships. Remember, though, that gift aid rarely covers the entire cost of college. It’s just part of the picture—a picture that may include loans, family savings, and other sources of money.
What Are Grants and Scholarships?
The terms “scholarship” and “grant” are often used interchangeably, but there are usually differences between these two forms of aid.
- Most grants are need based. This means that they are usually awarded based on your or your family’s financial situation.
- Most scholarships are merit based. This means that they are awarded to students with certain qualities, such as proven academic or athletic ability. Many scholarships have rules—maintaining a certain GPA, for example—that you have to follow to continue receiving aid.
What’s the Difference Between Grants and Scholarships?
| Grants | Scholarships | |
| Why is it given? | Financial aid typically based on financial need | Financial aid awarded based on various criteria like merit, talent, or affiliations |
| What may be the requirements? | Often need based and determined by the financial situations | Could be based on academic achievements, talents, skills, or other criteria |
| Source of Funds | Often come from federal and state governments, colleges, and various organizations | Often come from colleges, private companies, nonprofits, and various organizations |
| Application Process | Often require the FAFSA® and/or additional applications | May require separate applications, essays, interviews, or other criteria |
| Repayment Requirement | Typically does not require repayment | Typically does not require repayment |
More About Sources of Grants and Scholarships
Both grants and scholarships come from the following sources:
- Governments
- Federal and state governments are sources of gift aid.
- The federal government is the largest source of need-based gift aid, primarily in the form of the Pell Grant.
- State governments often fund grants and scholarships for residents attending college in their state.
- Colleges
- Many colleges offer grants and scholarships to their students.
- These may be merit based or need based, or a combination of the two.
- Colleges may have stricter requirements for recipients to keep a scholarship than do other sources of scholarships.
- Private organizations
- Many companies, foundations, community organizations, and clubs sponsor grants or scholarships. Grants and scholarships from these private organizations are called outside, or private, scholarships.
Three Steps to Tap into Grants and Scholarships
To apply for grants and scholarships, you’ll most likely have to fill out financial aid forms such as the Free Application for Federal Student Aid (FAFSA) and the CSS Profile®. Outside scholarships usually have their own application forms and application processes.
- Complete the FAFSA
You must fill out the FAFSA to qualify for federal aid. Many states and colleges use the FAFSA to award aid as well.
- Find Out What Financial Aid Forms Your College Requires
Apply for your college’s gift aid by filling out the required forms. In many cases, this will be the FAFSA, but some colleges require the CSS Profile or their own forms. Contact the college financial aid office to find out. Then submit the required forms on time.
- Research and Apply for Outside Scholarships
Start by talking with your school counselor about how to find outside scholarships. Use free online searches, such as the College Board's Scholarship Search. To apply for an outside scholarship, you’ll probably have to fill out an application form, and you may also have to submit financial aid forms.