What is the Difference Between Grants and Scholarships?

As you embark on your college journey, you may have come across the terms “grants” and “scholarships” in your search for financial aid. Both of these options fall under the category of “gift aid,” meaning they are funds that you do not need to repay. While grants and scholarships are often used interchangeably, they have some key differences.

In this article, we’ll explore these differences, how to find grants and scholarships, and provide tips on managing your applications effectively.

Understanding the Distinctions

Grants are typically need-based financial aid awarded by the government or a university. They aim to make education more accessible to individuals who may not have the financial means to afford it. To qualify for grants, students usually need to demonstrate their financial need through various factors, such as income, assets, and family contributions.

On the other hand, scholarships are predominantly based on merit or specific demographics. Merit-based scholarships consider factors like academic achievements, special talents, or athletic prowess. Demographics-based scholarships, on the other hand, are designed to encourage underrepresented groups to pursue higher education. It’s worth noting that some organizations may offer grants based on merit, and vice versa.

Finding Grants for College

The Federal Government offers several grants for college through the Free Application for Federal Student Aid (FAFSA®) program. By filing your FAFSA®, you can demonstrate your financial need and become eligible for these grants. Here are four grants commonly awarded through the FSA program:

  1. Pell Grant: This grant is offered to undergraduate students who demonstrate financial need. The maximum award for the current academic year is $6,345.
  2. Federal Supplemental Educational Opportunity Grant (FSEOG): Awarded at the school’s discretion, this grant provides additional financial assistance for students with exceptional financial need. The amount can range between $100 and $4,000 per year.
  3. TEACH Grant: Aimed at students who commit to working as educators in high-need fields or low-income schools, this grant awards up to $4,000 per year.
  4. Iraq and Afghanistan Service Grant: Available for students who do not qualify for a Pell Grant but have lost a parent to military service, specifically following the events of 9/11. The maximum award matches the maximum Pell Grant for a given academic year.

Additionally, many states and schools offer their own grants for students with financial need. To explore these opportunities, reach out to your school’s financial aid office for more information and application processes.

Exploring College Scholarships

Scholarships present another avenue for funding your college education, and there are millions of scholarships awarded each year, totaling billions of dollars in aid. Scholarships can be classified into three main categories:

  1. Merit-Based Scholarships: These scholarships are awarded based on academic achievements, special talents, or athletic accomplishments. Demonstrating your abilities, such as a high GPA or athletic achievements, may be required for eligibility.
  2. Need-Based Scholarships: Designed for students who demonstrate a certain level of financial need, need-based scholarships often require you to complete the FAFSA®. Meeting the specific financial criteria becomes crucial for qualification.
  3. Demographics-Based Scholarships: Unlike merit and need-based scholarships, demographics-based scholarships are not contingent on grades or financial need. Instead, they focus on specific categories like ethnicity, religion, gender, or other demographic characteristics.

To streamline your scholarship search, here are four databases that can assist you in finding relevant opportunities:

While grants are usually awarded based on need, scholarships often require candidates to go through an application process. This typically involves writing an essay on a specific topic or fulfilling other requirements specified by the scholarship provider.

It’s essential to stay organized during the application process, keeping track of deadlines and ensuring you meet all the necessary criteria.


Understanding the differences between grants and scholarships is crucial when seeking financial aid for college. Grants primarily address financial need, while scholarships are awarded based on merit or demographics. By filing your FAFSA® and exploring various databases and resources, you can uncover numerous grant and scholarship opportunities to help make your college education more affordable.

Remember to carefully review the requirements for each scholarship and stay organized during the application process. With dedication and thorough research, you can increase your chances of securing the financial aid you need to pursue your higher education goals.

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