Grants vs. Scholarships: What’s the Difference?

What’s a Scholarship?

A scholarship is a form of financial assistance awarded to students to help cover the cost of education. Unlike student loans, scholarships generally don’t need to be repaid, provided recipients meet any applicable requirements.

Scholarships are commonly awarded based on merit, but eligibility can extend beyond academic performance. Students may qualify based on athletic abilities, artistic talents, leadership experience, community service, career interests, or personal backgrounds. Some scholarships also consider financial need.

Types of Scholarships

There are several common types of scholarships, including:

• Academic scholarships: Awarded to students who demonstrate strong academic performance, such as maintaining a high GPA or achieving exceptional test scores.
• Athletic scholarships: Offered to students who demonstrate outstanding abilities in a particular sport, often through colleges and universities.
• Need-based scholarships: Designed to assist students who demonstrate financial need and meet the award’s eligibility requirements.
• Community service scholarships: Recognize students who have made meaningful contributions through volunteer work or community involvement.
• Career-specific scholarships: Available to students pursuing certain fields of study, such as healthcare, education, engineering, or technology.

Scholarships may be offered by colleges, universities, nonprofit organizations, private businesses, professional associations, and community foundations. Award amounts vary widely, from a few hundred dollars to full-tuition scholarships.

Some scholarships are awarded only once, while others may be renewed annually if the student continues to meet certain requirements, such as maintaining a minimum GPA or remaining enrolled full-time.

What’s a Grant?

A grant is another form of financial aid that generally doesn’t need to be repaid. Unlike scholarships, which frequently recognize achievements or specific qualifications, grants are most commonly awarded based on a student’s financial need.

Grants are available through federal and state governments, colleges, universities, and certain private organizations. They are intended to make education more accessible by helping eligible students pay for tuition, fees, and other qualifying educational expenses.

Types of Grants

Some of the most common types of educational grants include:

• Federal Pell Grants: Available to eligible undergraduate students who demonstrate financial need and generally have not earned a bachelor’s or professional degree.
• Federal Supplemental Educational Opportunity Grants (FSEOG): Provide additional assistance to undergraduate students with exceptional financial need at participating schools.
• State-funded grants: Offered by individual states to help qualifying residents afford college or career training.
• Institutional grants: Awarded directly by colleges and universities, often based on a student’s financial circumstances.
• Specialized grants: Designed for students who meet particular eligibility requirements, such as pursuing certain educational or professional paths.

For many federal and state grant programs, students must complete the Free Application for Federal Student Aid (FAFSA) to determine eligibility.

Although grants generally don’t require repayment, certain circumstances may create a repayment obligation. For example, withdrawing from school early, changing enrollment status, or failing to meet specific program requirements could affect eligibility or require a student to return part of an award.

3 Main Differences Between Grants & Scholarships

Although grants and scholarships share the same general purpose of making education more affordable, they differ in several important ways.

1. Eligibility Requirements

One of the biggest differences between grants and scholarships is how eligibility is determined.

Grants are generally need-based, meaning students must demonstrate financial need to qualify. Federal grant eligibility, for example, may depend on information provided through the FAFSA, enrollment status, and other program-specific requirements.

Scholarships, on the other hand, are frequently merit-based. Students may qualify based on grades, extracurricular activities, athletic performance, leadership, or other accomplishments. However, some scholarships also consider financial need, so the distinction isn’t always absolute.

2. Funding Sources

Grants and scholarships can come from similar sources, but their funding structures often differ.

Grants are commonly funded by federal or state governments and educational institutions. Many government-funded grant programs are designed to expand access to higher education for students who might otherwise struggle to afford it.

Scholarships are frequently funded by private organizations, nonprofit groups, businesses, professional associations, and colleges. Some are established by individual donors or foundations to support students pursuing particular educational goals.

3. Application and Renewal Requirements

The application process can also differ significantly.

Many grants require students to submit the FAFSA, although some programs have additional applications or eligibility requirements. Students may need to complete the FAFSA each academic year to continue receiving assistance.

Scholarships often require separate applications. Depending on the award, students may need to submit essays, recommendation letters, transcripts, portfolios, or other supporting documents.

Renewal requirements also vary. Some scholarships require recipients to maintain a minimum GPA or participate in specific activities, while grant eligibility may change based on financial circumstances, enrollment status, or continued compliance with program rules.

Grants vs. Scholarships: At a Glance

Feature	Grants	Scholarships
Primary Eligibility	Generally financial need	Often merit, talent, background, or other criteria
Common Funding Sources	Government agencies and colleges	Colleges, nonprofits, businesses, and private organizations
Application Process	Often requires the FAFSA	May require separate applications, essays, or recommendations
Repayment	Generally not required	Generally not required
Renewal	May depend on continued financial eligibility and enrollment	May depend on academic performance or other conditions
Typical Use	Tuition and other eligible education expenses	Tuition and other expenses permitted by the award

Bottom line: Both grants and scholarships can significantly reduce college expenses. Students should explore opportunities for both, rather than assuming they qualify for only one type of financial aid.

Where to Locate Grants & Scholarships

Finding grants and scholarships takes some research, but there are numerous resources available to help students identify opportunities that match their financial circumstances, academic interests, and career goals.

1. Federal Student Aid

The U.S. Department of Education is an excellent starting point for students interested in federal financial assistance. Completing the FAFSA allows students to be considered for federal grants and other forms of financial aid.

Visit StudentAid.gov to learn about available programs, eligibility requirements, and application deadlines.

2. State Education Agencies

Many states offer grants and scholarships to residents attending eligible colleges or universities. These programs may have specific academic, financial, or residency requirements.

Students can explore opportunities through their state’s higher education agency or department of education.

3. College Financial Aid Offices

Colleges and universities frequently offer their own scholarships and grants. Some awards are automatically considered during the admissions process, while others require separate applications.

Contacting a school’s financial aid office can help students identify institutional awards, deadlines, and eligibility requirements.

4. Scholarship Search Websites

Online scholarship databases can help students discover opportunities based on their interests, educational goals, and qualifications. Popular resources include:

• CareerOneStop: A U.S. Department of Labor-sponsored resource with a scholarship search tool.
• Fastweb: Helps students find scholarship opportunities based on their profiles.
• Scholarships.com: Offers a searchable database of scholarship opportunities.
• BigFuture by College Board: Provides college planning resources and scholarship information.

5. Local Organizations and Employers

Community foundations, civic groups, religious organizations, professional associations, and local businesses may offer scholarships to students in their communities.

Some employers also provide scholarships or tuition assistance programs for employees and their dependents.

Helpful Tip: Start searching early, keep track of application deadlines, and apply for multiple opportunities. Be cautious of organizations that guarantee scholarships or require payment to access financial aid. Legitimate scholarships generally do not require an application fee.

FAQs

Can you receive both a grant and a scholarship?

Yes. Students can receive both grants and scholarships during the same academic year, provided they meet the eligibility requirements for each award. However, the total amount of financial assistance a student receives may affect other aid awards, depending on the school’s financial aid policies and applicable program limits.

Is it harder to get a grant or a scholarship?

It depends on the program and the student’s qualifications. Need-based grants may be available to students who meet established financial eligibility requirements, while competitive scholarships may have a limited number of recipients. Some grants are also highly selective, so neither type is universally easier to obtain.

Do you need to complete the FAFSA to get a scholarship?

Not always. Many private scholarships have their own application processes and don’t require the FAFSA. However, colleges and universities may use FAFSA information when awarding institutional scholarships, particularly those that consider financial need.

Can you use grants and scholarships for living expenses?

Sometimes. Certain grants and scholarships allow funds to be used for eligible living expenses, such as housing and meals. However, the specific award terms determine how the money may be spent, and amounts used for room and board are generally taxable under federal scholarship tax rules.

Do grants and scholarships affect student loans?

Yes. Receiving grants or scholarships can reduce the amount of student loans needed to cover educational expenses. Because these awards generally don’t require repayment, maximizing gift aid before borrowing can help students graduate with less debt.

Are grants and scholarships available to graduate students?

Yes. Although some federal grants, such as Pell Grants, are primarily intended for eligible undergraduate students, graduate students may qualify for scholarships, fellowships, research grants, and other institutional or private financial assistance.

Final Thoughts

Grants and scholarships can make a meaningful difference in the cost of higher education, helping students pursue their academic goals without taking on as much student loan debt. Although grants are typically awarded based on financial need and scholarships often recognize merit or other qualifications, both provide valuable opportunities to reduce educational expenses.

The best approach is to explore both options, complete the FAFSA when applicable, research available programs, and apply early. Taking advantage of grants and scholarships can help make college more affordable and put students in a stronger financial position after graduation.