I keep hearing “scholarships” and “grants” used interchangeably when people talk about financial aid for college. Are they really the same thing? If not, what are the key differences? I’m starting to look for ways to pay for school and I need to understand which one I should be focusing on more. Specifically, are there different eligibility requirements for each? Do they come from different sources? And does one typically cover more expenses than the other? Any insight would be super helpful!
Answer
Scholarships and grants are both forms of financial aid that do not need to be repaid, making them highly desirable resources for students seeking to fund their education. While they share this crucial characteristic, they differ in their eligibility criteria, sources, and the factors considered when awarding them.
Scholarships
Scholarships are typically merit-based awards. This means they are awarded based on a student’s achievements, talents, or characteristics. These factors can encompass a wide range of qualities, including:
- Academic Excellence: High grades, a strong GPA, standardized test scores (SAT/ACT), and a challenging course load are often key criteria. Scholarships may target students pursuing specific academic fields.
- Athletic Ability: These scholarships are awarded to students who demonstrate exceptional skill in a particular sport. They are often offered by colleges and universities to recruit talented athletes.
- Artistic Talent: Students with exceptional abilities in areas like music, visual arts, dance, or theater can qualify for scholarships. Portfolios, auditions, or performances are often required to showcase their talent.
- Leadership Skills: Scholarships may be awarded to students who have demonstrated leadership in extracurricular activities, community involvement, or student government.
- Community Service: Significant contributions to the community through volunteering or other service activities can make a student eligible for scholarships.
- Specific Backgrounds or Affiliations: Some scholarships are targeted towards students with specific ethnic, racial, religious, or gender identities. Others may be available to students who are children of employees of a particular company, members of a specific organization, or residents of a certain geographic area.
- Unique Talents or Skills: This can cover anything from proficiency in a niche skill to a unique hobby or interest.
Sources of Scholarships:
- Colleges and Universities: Many institutions offer scholarships to attract high-achieving students. These can be based on academic merit, specific program enrollment, or other factors.
- Private Organizations: A vast number of private organizations, foundations, and corporations offer scholarships. These may have specific eligibility requirements related to the organization’s mission or goals.
- Non-Profit Organizations: Similar to private organizations, non-profits often provide scholarships aligned with their charitable objectives.
- Government Agencies: While grants are the primary form of government aid, some government agencies offer scholarships for specific fields of study or to certain demographic groups.
- Employers: Some employers offer scholarships to employees or their children.
Grants
Grants are typically need-based forms of financial aid. This means they are awarded based on a student’s demonstrated financial need. Need is determined by evaluating a student’s and their family’s income, assets, and other financial information. The information is gathered through the Free Application for Federal Student Aid (FAFSA) and other institutional forms.
Factors Considered for Grants:
- Family Income: The primary factor is the student’s and their family’s income. Lower-income families are typically eligible for larger grant amounts.
- Assets: Assets such as savings accounts, investments, and real estate holdings are also considered.
- Family Size: The number of dependents in the household can affect the level of need.
- Number of Students in College: Having multiple family members in college simultaneously can increase a student’s eligibility for need-based aid.
- Cost of Attendance: The overall cost of attending a particular institution is taken into account.
Sources of Grants:
- Federal Government: The U.S. Department of Education offers several major grant programs, including the Pell Grant, which is the cornerstone of federal student aid for undergraduate students.
- State Governments: Many states offer grant programs to students who reside in the state and attend eligible institutions.
- Colleges and Universities: Institutions often provide their own grant programs using institutional funds or endowments.
- Private Organizations: Some private organizations offer need-based grants in addition to scholarships.
Key Differences Summarized:
| Feature | Scholarships | Grants |
|---|---|---|
| Basis | Merit-based (achievements, talents, characteristics) | Need-based (financial need) |
| Eligibility | Academic performance, athletic ability, artistic talent, specific affiliations | Family income, assets, family size, cost of attendance |
| Sources | Colleges, universities, private organizations, non-profits, employers | Federal government, state governments, colleges, universities, some organizations |
In practice, it is important to note that the lines between scholarships and grants can sometimes blur. Some scholarships may incorporate a need-based component, and some grants may consider academic merit as a secondary factor. It is always advisable to research the specific eligibility criteria for each aid program. Students should explore all available funding options, including both scholarships and grants, to minimize the need for student loans.
