Grant vs. Scholarship: How Do They Differ?
College scholarships and grants allow students to pay for their degrees while avoiding hefty out-of-pocket costs. According to data from Sallie Mae, scholarships and grants covered 25% of students’ college costs in 2020-21. That same year, about 7 in 10 families relied on scholarships and grants to fund a student’s education.
In this guide, we present an overview of college scholarships and grants, including eligibility requirements and strategies for finding the best opportunities for you.
Grant vs. Scholarship: How Do They Differ?
Although both scholarships and grants award free money that does not need to be repaid, there are some key differences between the two.
Grants are typically awarded by federal and state governments. They’re also usually allocated based on financial need instead of merit. One well-known example is the Pell Grant, which is given to undergraduates who demonstrate financial need. Students can apply for college grants by simply filing the FAFSA.
Scholarships, in contrast, are given out by various entities, such as nonprofits, employers, foundations, schools, religious institutions, and professional organizations. These gifts require separate applications and are usually awarded based on merit. Factors influencing scholarship decisions may include GPA and grades, SAT or ACT scores, extracurricular activities, and an essay.
Many scholarships target specific student populations, such as certain majors, women, students of color, LGBTQ+ students, students with disabilities, and other underrepresented groups.
The 3 Types of Grants for College Students
The main types of grants for college students are federal grants, state grants, and special grants.
1. Federal Grants
The U.S. Department of Education offers grants to certain student populations. Qualifications typically include financial need and a specific field of study.
Federal Pell Grant: Undergraduates who demonstrate financial need and do not already hold a bachelor’s, graduate, or professional degree may qualify for the Pell Grant. The maximum award amount for the 2021-22 school year is $6,495.
Federal Supplemental Educational Opportunity Grant: FSEOG funding offers $100-$4,000 annually to undergraduates who demonstrate exceptional financial need. Note that not all colleges participate in the FSEOG program.
TEACH Grant: Unlike other grants, the Teacher Education Assistance for College and Higher Education Grant requires recipients to enroll in specific classes. Students must also commit to teaching full time for at least four years after graduating college.
Iraq and Afghanistan Service Grant: Undergraduates who are under the age of 24 and whose parent or guardian died in Iraq or Afghanistan due to military service may qualify for a Service Grant. The maximum award amount is the same as that for the Pell Grant.
2. State Grants
States often set aside grant money for residents who wish to earn a college degree. Because states create their own stipulations, however, eligibility and awards may vary. Contact your state department of education to learn more about available grants for college students.
3. Special Grants
Other grants include special fellowship programs geared toward specific fields of study and/or certain student populations. For instance, the Foreign Language and Area Studies Fellowship awards both summer and academic-year grant money to students studying specific regions and languages.
Source: Bestcolleges.com
