hands signing financial aid papers after learning difference between scholarships and grants

College Success

What Is the Difference Between Grants & Scholarships?

02.05.2022 • 7 min read

Nick Griffin

Subject Matter Expert

This article explains what scholarships and grants are. It also presents the pros and cons of each of them. As well as the steps required to apply for them.

In This Article

Excitement and pure happiness fill your body.

This feeling is so intense you have the urge to run up and down the street telling everyone, “I’m going to college!”

It’s a fresh start—a chance to change the course of your life to pursue something you have dreamed about.

Then the big question: How am I going to pay for it?

After a bit of research, discovering how financial aid can help pay for school will bring some ease to the big question of money.

With many types of financial aid in abundance these days, the track to financing an education takes a bit of understanding but can lead to huge savings.

Let’s start by explaining the difference between two types of financial aid: scholarships and grants.

What Is a Grant?

A grant is a set amount of money that is gifted to a student mostly based on financial need. Gift aid is key here, meaning you do not have to pay the money back.

Grants do not have many eligibility requirements. To be eligible for a need-based grant you must demonstrate you need the money. This is done by comparing the cost of your education to the amount of money you are able to pay.

Most grants are awarded by either the federal government or the state government from which you reside. Federal Pell Grants are the largest grant program.

The college or university you plan on attending most likely awards grants based on student needs as well.

The following table breaks down the pros and cons of grants:

PROS OF GRANTS	CONS OF GRANTS
Does not need to be paid back	May be attached to certain criteria
Easy application process	Takes time to gather information
Can be a substantial amount	Strict eligibility requirements
Can receive multiple grants	One grant is rarely enough

What Is a Scholarship?

Scholarships are another form of financial aid that is offered to graduate students and undergraduate students. Many different types of scholarships exist, but many have similar requirements.

Scholarships are merit-based. This means being good at something or especially deserving of it. The good news is there are lots of scholarship options. For example, military spouses have scholarship opportunities as well as single moms.

Students ‌get college scholarships for accomplishments like an academic achievement (high GPA), athletic ability, or exceptional skill. Students can receive scholarships for entering a certain profession as well.

Scholarships are open to anyone who takes the time to apply. Often writing a quality scholarship essay that highlights your talents is required.

Many private companies, nonprofits, school alumni, and community organizations provide scholarships. Similar to grants, this is money that is not paid back.

The following table breaks down the pros and cons of scholarships:

PROS OF SCHOLARSHIPS	CONS OF SCHOLARSHIPS
Does not need to be paid back	May be attached to specific criteria
Many organizations offer scholarships	Difficult to sort through
Based on grades, activities, or essays	Low grades can disqualify you
Anyone can apply for free	Applying can be very time-consuming

How Do You Apply for Grants and Scholarships?

Of course, free money sounds great, and accessing it is not as difficult as you would imagine. Follow these steps to apply for a scholarship or grant:

Choose a major and a school you are interested in attending and be accepted into it.
Fill out the Free Application for Federal Student Aid (FAFSA), which is the government lender application to take out loans at low interest rates. By filling this out you will see how much you qualify for in federal student loans and see if you qualify for any federal grants.
Check with your college financial aid office to get forms and resources to fill out and apply for local scholarships.
Do some internet searching on a database that is designed to help you find scholarships matching your qualifications. Websites such as BigFuture by College Board help you gain access to scholarship providers for billions of dollars in scholarship opportunities.
Take the time to apply for scholarships. Make sure you are focused and provide all the requirements of each scholarship. Have someone edit and look over your work to ensure its quality.
Use federal student loans to cover the rest of your college costs. Federal student loans offer the lowest interest rates but all the money must be paid back after graduation. There are many generous repayment options with federal student aid.
Private student loans should be used last. Typically, private student loans have the highest interest rates. Since these loans are issued from private banks and credit unions, some private loans are better than others.

Why Apply for Grants and Scholarships?

Grants and scholarships are free money for higher education that you do not have to pay back. Imagine having more time to focus on your schoolwork while in college and not having to worry as much about your financial contribution.

Whether you are just out of high school or going back to college at 30 to find a better quality of life, there are a ton of financial aid options for you.

By applying for grants and scholarships, you are gaining the financial freedom to put school first.

You should apply for grants and scholarships because:

It’s not very time-consuming
The process is free
You do not have to pay them back
You get to highlight who you are and what you’re good at
It helps to build a professional network
They look great on a CV

Who Offers Grants and Scholarships?

Grants and scholarships come from an abundance of places. Grants are mostly government-based (i.e., the Pell Grant and Teach Grant) and awarded to students based on family income, or expected family contribution (EFC), compared to the cost of attendance (COA) at the school of choice.

Scholarships are mostly offered to students by private entities and community members. You may find that a local bank, clinic, community group, or restaurant offers several scholarships to students each year. Non-profit organizations in your area may also offer several local scholarships to students and are far less competitive.

Many corporations donate money to student scholarships each year as well. Using an internet scholarship search tool and talking to your financial aid office to see what resources the school has to offer students looking for scholarships are both great places to start.

By earning grants and scholarship money, you could no longer have to worry about how to work full time and go to school full time. This ensures that you can put more energy into your studies and your exciting new career path.

By reducing the cost of your education you can make grants and scholarships go a lot farther. Take the time to look into different colleges to see what might be the best fit for you and your college budget.

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Students enrolled in Degrees+ can fill out a FAFSA to see if they qualify for federal grants. In fact, students who are awarded Pell Grants can have their Degrees+ education full-funded.

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