What’s the Difference Between Grants and Scholarships?

Nicolas Cesare
A blank scholarship application surrounded by piles of cash.
Reading Time: 4 minutes

Paying for school

is becoming more difficult than ever, now that college is so expensive and wages have been stagnant for decades. Whether you’re ready to start college fresh out of high school, or you’re more of a non-traditional student, you’ll need to make use of all of the tools at your disposal. This includes student loans, which are used by many students, but it also means applying for (and being awarded) grants and scholarships. Make sure that you do your research before applying for this kind of funding, and understand the difference between a grant and a scholarship, and how you can apply for and get each one.

What Is a Grant?

Grants are often referred to as “free money,” although this doesn’t quite capture the nuance behind a grant and why they are awarded. A grant is an amount of money given out by one party (usually the government, a corporation, or some kind of foundation) to another, often for research or academic purposes. What makes a grant different from a paycheck or a loan is that:

  • You receive it before you’ve undertaken the activity that it’s intended for, and
  • You don’t have to pay it back later, no matter how the activity pans out.

Grants that are given out for research and academic purposes are often very competitive, so it’s not uncommon for a research team or academic professional to hire a grant writer. A grant writer can help to fill out the application and help a team present their research plans in the best possible light, improving their chances of landing a grant. However, if you are only applying for grants in order to help you pay for your undergraduate college career, then you will not have to worry about this.

What Is a College Grant?

Grants are often given to college professors or other researchers in order to enable them to pursue certain research goals. However, there are also grants designed specifically for college students or prospective students to help pay tuition, fees, and living expenses that are necessary for a college education. Grants that help pay for college come from the Department of Education, financed by the federal government. Here are some federal grants that you should know about, and the requirements for getting them.

Pell Grants

Federal Pell Grants

are the most popular federal grant for college. They are awarded to undergraduate students based on financial need as determined by your FAFSA, the cost of tuition at your school, and your status as a part-time or full-time student. For the 2018 school year, the maximum value of a Federal Pell Grant was $6,095 split across two semesters. There is an option to receive an additional 50 percent of the value of your award if you enroll in summer courses.

Federal Supplemental Education Opportunity Grant (FSEOG)


are awarded to undergraduate students who demonstrate an exceptional level of financial need. However, not all schools are participants in the FSEOG program, so contact your school’s financial aid office to find out if you might be eligible for these grants. If you are, you may be awarded up to $4,000 per year in grant funds.

Teacher Education Assistance for College and Higher Education (TEACH) Grant

Just like the name sounds, TEACH Grants are designed to benefit undergraduate, post baccalaureate, and graduate students who are majoring in a program that’s designed to turn them into future primary and secondary school teachers. Unlike most other grants, TEACH Grants do come with some strings attached. Students who receive these grants must complete four years of teaching in a high-need field at a school or educational service agency that serves low-income students. In the 2018 school year, TEACH Grant recipients were eligible to receive up to $3,752 in funds. TEACH Grants are just one of many financial aid opportunities aimed at education majors, including student loan forgiveness for teachers.

Iraq and Afghanistan Service Grants

These grants are intended for students whose parent or guardian died as a result of service in the U.S. armed forces in the military actions in Iraq or Afghanistan following September 11th, 2001. However, these grants are only available to students who are ineligible for Federal Pell Grants based on financial need and who were younger than 24 years old at the time of the parent or guardian’s death. For the 2018 school year, the maximum amount available for an Iraq and Afghanistan Service Grant was $5,717.11.

All federal grants can be applied for by filling out your FAFSA, where your eligibility for all available grants will be determined by the Department of Education.

What Is a Scholarship?

Unlike grants, which are typically needs-based with occasional academic requirements, scholarships are distributed for a wide variety of reasons. In many cases, scholarships are awarded based on academic merit or other value to the school, such as good grades, your participation in a certain academic program, or your participation and achievement in one of the school’s athletic programs. Scholarships can also be awarded based on things that you’ve done outside of school, such as the company your parents work for or military service performed by you or a parent or guardian. Also unlike grants, scholarships are funded by a variety of sources, from companies to churches to the schools themselves.

There are thousands of scholarships that are theoretically available. In order to find out which ones might be available to you given your background and academic performance, you should contact your school’s financial aid office to find out which scholarships you should apply for.

Grant vs Scholarship

Both grants and scholarships are funds that you don’t have to pay back (provided that you meet their requirements to receive them in the first place). So if you have an opportunity to receive either grants or scholarships, you should accept both as long as they do not interfere with one another. For example, if a scholarship stipulated a requirement that would make you ineligible for a grant, such as dropping your education major that makes you eligible for TEACH Grants; in such a situation, it would benefit you to consider which is more valuable, which is recurring or renewable, etc.

Some college grants may be easier to get than scholarships as they are awarded based on financial need. However, even if your financial need is not great enough to qualify for a federal grant, you can still be eligible for many scholarships based on academic performance.

Some scholarships will require lengthy application processes, such as writing an essay to be reviewed in order to determine the scholarship amount that you will be awarded. For this reason, it may be wise to apply for grants automatically through your FAFSA, then to pick and choose which scholarships you should apply for based on which ones you are most likely to get and the reward amounts that they will distribute.

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