Grants vs. Scholarships: Funding Your Education

Navigating the world of college financing can be daunting, with various options available to help students cover the rising costs of higher education. Among these options, grants and scholarships stand out as valuable forms of financial aid that don't require repayment. While often used interchangeably, grants and scholarships have distinct characteristics and eligibility criteria. This article aims to clarify the differences between grants and scholarships, providing a comprehensive guide to understanding and securing these valuable resources.

Understanding Grants

College grants are forms of financial aid given to students by the government, institutions, or private organizations. Different grant providers have different goals and motivation to offer grants. Unlike loans, grants don’t have to be repaid as long as you don’t violate the terms or conditions. There are primarily three kinds of grants: government, institutional, and private.

Government Grants

Government grants are provided by the federal government, the government of your state, or the government of the state you attend college in. They’re generally paid directly to the institution a student attends, although some specific types may be given to the student directly. To qualify for these grants, students need to complete the Free Application for Federal Student Aid (FAFSA).

The Pell Grant is the federal government’s primary grant program for over six million low- and middle-income college students. The maximum Pell Grant amount for 2025-2026 was $7,395, while the minimum was $740. Federal Student Aid (FSA) has yet to announce the maximum award for the 2026-27 academic year, although most expect it to remain unchanged. Upon completing the FAFSA, students are automatically considered for the Pell Grant and the FSEOG. The FSEOG (Federal Supplemental Educational Opportunity Grant) is available through participating schools for undergraduates with exceptional financial need. By completing the FAFSA, you may receive between $100 to $4,000 per year, depending on your need and your school’s available funding. You might get your grant funding through a student account credit or direct deposit.

The TEACH Grant provides up to $4,000 per year to students who agree to teach at a school in a low-income area for 4 years post-graduation. Because the TEACH Grant is a significant commitment, it requires more steps than just completing the FAFSA. To receive the grant, you must agree to teach a high-need subject in a school that serves low-income students for at least four years within eight years of graduation. If you fail to do so, you’ll have to pay the grant back as if it were an unsubsidized federal loan.

State grants are provided by states’ higher education agencies. Each state, as well as the grants offered by that state, may have different eligibility requirements. Depending on the school’s free tuition program, you may need to apply for state grant aid as well. In general, government grants have the strictest regulations when it comes to how they can be used. Be sure to check each type of grant’s requirements; they will explain what you can use the money for and how to remain eligible.

Institutional Grants

Institutional grants are money provided by the college or university a student attends or plans to attend. To be considered, students must have been accepted to the school and typically must also have completed the FAFSA. The majority of institutional grants are used directly to lower the cost of attendance at that college or university. University need-based scholarships are some of the most common ones, and oftentimes you won’t have to apply for them separately from your college application. For example, colleges like Harvard University, Yale University, the University of California system, and hundreds of others across the country offer free tuition scholarships for qualifying students meeting a certain income threshold/SAI.

Institutional grants are similar to need-based scholarships. You’ll likely automatically qualify for these need-based grants, or grants specific to the field of study you’re in. If you’re a graduate student, you could receive grants for research and classes for pursuing your specific field.

Private Grants

Private grants are awarded by companies, foundations, and organizations. Private grants may be awarded directly to the student or to the college or university they will attend. When grants are given straight to the student, there may be specific requirements regarding what the money can be used for. Funds might only be for tuition or educational expenses like books or laptops. It’s always a good idea to check with the grant provider to determine what steps you need to complete to be considered and what you’re allowed to spend the funds on.

HCF (Hawaii Community Foundation) invests charitable funds in communities across the State primarily through nonprofit organizations. HCF also assists several private foundations in delivering their grant making programs according to their specific strategies. Each competitive grant programs has its own funding priorities and proposal requirements.

Read also: Investing in Your Workforce

Exploring Scholarships

Scholarships are financial aid awards that are typically based on a student's merit or identity. This could include academic performance, artistic ability, gender, or ethnicity. Scholarships for Texas students supply an enormous amount of financial aid for aspiring students each year. California offers a multitude of scholarship opportunities to undergraduate and graduate students. Florida is the third largest state in the United States and offers a number of exclusive scholarships for residents.

Different organizations offer scholarships with varying criteria and purposes. For instance, the Society of Exploration Geophysicists (SEG) Scholarships encourage the study of geophysics and related geosciences in universities around the world. Scholarships range from $500 to $10,000 per academic year; average awards are approximately $3,600. The number of scholarships available depends chiefly upon the number of sponsors and the amounts they contribute. The NAWIC Construction Trades Scholarship supports students enrolled in construction-related training programs, helping them gain the necessary skills and knowledge for careers in the construction industry. This scholarship is open to high school seniors and students enrolled in approved programs such as community colleges, technical schools, or apprenticeship training. NEXT for AUTISM Fellows should be studying in the field of Health and Human Services. Priority will be given to students committed to serving individuals with autism in their careers post-graduation. IMEG awards individual scholarships of up to $10,000 to multiple students nationwide who are pursuing a degree in engineering. Scholarships are available for underrepresented students in the upcoming academic year who are sophomores, juniors and seniors that have great potential and have a financial need. The Next Swell was created in part for the purpose of providing financial academic scholarships to exceptional students pursuing research and/or a degree in a marine science or marine conservation focused area. Catching the Dream strives to help improve the quality of life in Indian communities through the higher education of Indian people by providing scholarship funds to native college students who demonstrate academic achievement, clearly defined goals, leadership, the determination to succeed, and the desire to return to their communities and help others realize their dreams.

Types of Scholarships

Some of the most common types of scholarships are based on your academics, financial need, demographics, and talents.

Merit-based scholarships are highly competitive scholarships that select students based on merit, rather than financial need. Typically, you need to meet a certain GPA, letter grade, and standardized test score requirement. Scholarship providers consider those with the highest scores and grades the most competitive. They might also consider extracurriculars, volunteer opportunities, and other indicators that you are a high-achieving, well-rounded student. Some scholarships also require an essay about your school and life experiences, your goals, or who you are as a person.
Need-based scholarships are for those with qualifying financial need and don’t consider your school performance or extracurricular activities. The most common requirement is to fill out the FAFSA or your state’s equivalent. You’ll also receive a Student Aid Index (SAI), which will indicate how much the federal government expects you to pay for your education.
Athletic scholarships are for students who show impressive performance in a sport. NCAA Division 1 or Division 2 schools, NAIA, and NJCAA schools typically offer full- or partial-ride scholarships to students to play for the school.
Some scholarships might be more unique to your extracurriculars or hobbies. For example, if you’re passionate about chess and compete frequently, you may be able to find scholarships specific to your hobby or compete for scholarship money.
Scholarships based on demographics: These scholarships target specific groups, such as African American students. African American scholarships provide financial assistance to African American and Black students pursuing their higher education.

Key Differences Between Grants and Scholarships

Feature	Grants	Scholarships
Basis	Primarily based on financial need.	Primarily based on a student’s merit or identity (academic performance, artistic ability, gender, ethnicity, etc.).
Flexibility	Grants also have strict requirements for what they can be used for. Generally, grants can only be applied to tuition, room and board, and fees.	However, scholarships tend to have more flexibility when it comes to how the funds can be used. Generally, you can use scholarships for any external academic expenses, such as a computer, food, or off-campus housing, in addition to tuition, fees, and room and board.
Application	Students are automatically considered for federal and state grants when they submit the FAFSA. Usually, institution-specific grants are also applied automatically when you apply to a college and complete the FAFSA.	For other grants, specifically ones offered by private organizations, you’ll almost certainly need to apply.
Renewal	Most annual grants don’t renew automatically, so you will need to reapply each year.	Winners may reapply for continuation of their scholarships for up to two additional years, provided each student fulfills the renewal requirements and maintains their student membership with RMA (Risk Management Association).
Financial aspect	Grants are typically provided to students who demonstrate financial need.	One of the most common misconceptions is that all scholarships are granted based on financial need.

Finding and Applying for Grants and Scholarships

Applying for grants and scholarships may seem daunting. However, there are many avenues to apply for aid and plenty of resources can match you with applications you may qualify for.

Grants

FAFSA: Students are automatically considered for federal and state grants when they submit the FAFSA. Usually, institution-specific grants are also applied automatically when you apply to a college and complete the FAFSA. The Free Application for Federal Student Aid, or FAFSA, is your one-stop shop for all forms of federal financial aid. This includes federal grants like the Pell Grant and Supplemental Educational Opportunity Grant. The FAFSA will determine your eligibility for aid using many factors, including your household size, income, and assets. Most of this information is collected through tax documents you or your parents submit. It’s worth noting that many state and institutional aid programs also utilize information submitted through the FAFSA. So, even if you don’t think you will qualify for a Pell Grant, it may be worth filing the free application.

Scholarships

Scholarships.com: When students sign up for a free account on Scholarships.com, they can receive a list of all awards they’re eligible for, including grants. Scholarships.com has helped over 26 million students and families find college scholarships. Scholarships.com is completely free to use. There are no fees to search for scholarships, create an account, or access any of our resources. Scholarships.com only lists legitimate scholarships. Every scholarship is verified to ensure accuracy and authenticity. Scholarships.com has been serving students and educators for over 25 years. Scholarships.com has a scholarship database. You can access over 3.7 million scholarships and grants totaling about $19 billion in financial aid. Scholarship listings cater to all types of students, ensuring a wide range of opportunities. Scholarships.com is constantly updating its database, removing expired scholarships, and incorporating user feedback. You can browse scholarships on Scholarships.com without creating an account by visiting their Scholarship Directory.

Read also: Understanding the Tapestry of Teaching
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Private Opportunities: You’ll need to do your own research to find private scholarships. If you’re in high school, you can start by talking with a guidance counselor about local scholarships and any others they may know of.Some require a mix of, or all of the following:
- Essay(s)
- Letters of recommendation
- High school or college transcripts
- GPA
- Standardized test scoresSome scholarships are more intensive than others, and not all require the same materials.
Stay Organized: Applying for college scholarships can be a lot to keep track of. So, staying on top of things using a calendar, spreadsheet, notebook, or other ways to track what you’ve applied for and what you need for those applications can ease the stress of remembering it all yourself.

General Tips

Analyze and Highlight Your Strengths: If your scholarship requires an essay, use it to highlight your strengths. For example, maybe your GPA or standardized test scores aren’t the best, but you’ve put in countless hours volunteering. Make sure to elaborate on what makes you unique.
Look for Local Scholarships: Talk to your school counselor or research online to see if there are any local private scholarships you can apply for, which may have less competition than nationwide scholarships.
Reach Out to Your Employer About Financial Aid: Some companies sponsor their employees going back to school, especially if it’s a career-related field. Talk with your human resources team to see if your company offers any tuition reimbursement or scholarship opportunities and if you qualify.
Apply Early: Many scholarships and grants are first-come, first-served, meaning you should apply for these as soon as possible. With federal and state grants, make sure you file the FAFSA as soon as possible when it is available each year on Oct. 1. For scholarships, check with the scholarship provider to see when the application is due. Some scholarships are available throughout the year, while others maintain hard deadlines.
Don't Wait: Your senior year in high school is a crucial time for college preparation. Among the many tasks, finding and applying for college scholarships should be a priority. High school juniors shouldn't wait until senior year to start applying for scholarships.

Common Questions

Do private scholarships affect the FAFSA? Private scholarships will not affect the FAFSA’s SAI. However, your school may not offer as many scholarships and grants to you to make up for your private scholarship funding. Typically, your school’s financial aid package won’t be impacted too much if you don’t have many private scholarships.
Are there restrictions on how I can use the money? It depends on the scholarships and grants. Some may limit you to use towards certain living or college expenses like tuition and fees, housing, or food.
Are there scholarships for online students? Online students can qualify for many of the same financial aid opportunities as on-campus students.
What if I have questions about a scholarship? If you have a question about a scholarship, we recommend checking the scholarship listing first for details. Many listings include contact information for the provider, who can give the most accurate information.

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