Grants and scholarships are both types of free money for college that you do not have to pay back. The main difference is that grants are usually based on financial need, while scholarships are usually based on merit, such as grades, talents, or athletic ability. Both can help you pay for tuition, books, and living expenses, but they come from different sources and have different application processes.
What Is a Grant?
A grant is money given to a student to help pay for college, typically based on financial need. The government, colleges, or private organizations award grants to students who demonstrate that they need help covering educational costs.
Most grants come from the federal or state government. The most common one is the Federal Pell Grant, which goes to undergraduate students with significant financial need. Other federal grants include the Federal Supplemental Educational Opportunity Grant (FSEOG) and the Teacher Education Assistance for College and Higher Education (TEACH) Grant.
To apply for most grants, you must fill out the Free Application for Federal Student Aid, or FAFSA, each year. The FAFSA asks about your family’s income and assets to determine your expected family contribution, or EFC. Your school uses this number to decide how much aid you qualify for.
What Is a Scholarship?
A scholarship is money awarded to a student based on merit, achievement, or a specific characteristic. Scholarships can come from colleges, private foundations, nonprofits, or community groups. They reward students for academic excellence, athletic skill, artistic ability, or involvement in activities.
Scholarships can be need-based as well, but most are merit-based. For example, you might earn a scholarship for a high GPA, a winning essay, or a special talent like playing the violin. Some scholarships are also for students with certain backgrounds, such as first-generation college students or those from a particular state.
Unlike grants, scholarships often require a separate application. You may need to write an essay, submit letters of recommendation, or provide a portfolio. Some scholarships are renewable each year, while others are one-time awards.
Key Differences at a Glance
To make it easy, here is a quick comparison of grants and scholarships:
| Feature | Grant | Scholarship |
|---|---|---|
| Primary basis | Financial need | Merit or achievement |
| Common source | Federal or state government | Colleges, private organizations, nonprofits |
| Application process | FAFSA required | Separate application, essays, or auditions |
| Repayment | No repayment | No repayment |
| Renewable | Often must reapply each year | May be renewable or one-time |
How to Apply for Grants
Start by completing the FAFSA as soon as possible after it opens on October 1 each year. The deadline for federal aid is June 30, but many states and colleges have earlier deadlines. Check with your school’s financial aid office for specific dates.
After you submit the FAFSA, you will receive a Student Aid Report (SAR) that summarizes your information. Your college will use this to put together a financial aid package, which may include grants, work-study, and loans. Accept the grants first because they do not need to be repaid.
Some states also offer their own grants, like the Cal Grant in California or the TAP grant in New York. These may require separate applications, so check your state’s higher education agency website.
How to Apply for Scholarships
Scholarships require a different approach. You need to search for opportunities that match your skills, interests, and background. Start with your high school counselor or college financial aid office, and also search online databases. But avoid any scholarship that charges an application fee—it could be a scam.
When you find a scholarship, read the requirements carefully. Most will ask for:
- An online application form with your personal information
- One or more essays on a specific topic
- Letters of recommendation from teachers or mentors
- Transcripts or proof of GPA
- A resume listing activities, honors, or work experience
Keep track of deadlines and submit everything early. Some scholarships have rolling deadlines, while others close months before the semester starts. Use a spreadsheet to stay organized and avoid missing out.
Can You Get Both a Grant and a Scholarship?
Yes, you can receive both at the same time. Many students combine grants and scholarships to reduce their out-of-pocket costs. However, your total financial aid package cannot exceed your cost of attendance, which includes tuition, fees, room, board, and other expenses. If you receive too much, your school may reduce your grants or loans.
For example, if you get a Pell Grant and also win a private scholarship, your college might adjust your aid package. That is okay because your total aid still goes toward your education. Always report outside scholarships to your financial aid office so they can update your package correctly.
Which Is Better for You?
The answer depends on your situation. If you have significant financial need, grants are often the easiest to get because they rely on the FAFSA. If you have strong grades or special talents, scholarships can reward you for your hard work. You should apply for both to maximize your chances of getting free money.
Start early, stay organized, and fill out the FAFSA every year. Even if you think you do not qualify for grants, many scholarships require FAFSA completion anyway. And remember, both grants and scholarships are free money—so take advantage of every opportunity you can find.
In summary, grants are need-based and usually come from the government, while scholarships are merit-based and come from many different sources. Both are forms of financial aid that do not need to be repaid. To get the most help, fill out the FAFSA, search for scholarships that match your profile, and apply to as many as you can. With careful planning, you can reduce your college costs significantly.
Frequently Asked Questions
Can a grant be converted to a scholarship?
No, a grant cannot be converted to a scholarship because they are different types of aid with different eligibility criteria.
Do I have to pay back a grant if I drop out of college?
Yes, if you drop out before completing the term, you may have to repay part of the grant, but the rules vary by program.
Which is easier to get, a grant or a scholarship?
Grants are often easier to get if you have financial need, while scholarships require meeting specific merit criteria, which can be more competitive.
Can I use a grant or scholarship for living expenses?
Yes, both grants and scholarships can be used for living expenses, but they must be applied to your cost of attendance first.
Are grants and scholarships taxable income?
Generally, grants and scholarships are tax-free if used for tuition and required fees, but amounts used for room and board may be taxable.
