Grants and Scholarships: What's The Difference?

Grants and Scholarships: What's The Difference?

Updated December 2, 2020
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Grants and Scholarships: What's The Difference?

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Billions of dollars in grants and scholarships are awarded each year for a variety of different reasons – odds are you qualify for something.

If you are researching ways to fund your education, you've probably read a lot about government grants and scholarships. After all, pursuing an undergraduate or graduate degree can be expensive, and anything you can do to help pay for college will make your personal financial life easier.

The notion that you could be eligible for some financial assistance that doesn't require repayment is compelling, but it's not a fantasy – if you know where to look.

But far too many people never get around to applying for a grant or scholarship, even though they are likely eligible for aid. A surprising number of people simply don't think they will qualify. It's common to think that the amount available simply won't be worth the effort of filling out the application.

Here's the reality: billions of dollars in college grants and scholarships are awarded each year for a variety of different reasons – financial need, academic merit, ethnicity, religion, community service, even more – and odds are you qualify for something.

While student loans do need to be paid back, grant money and scholarships for college are different because they do not need to be paid back in most cases.

How They Differ

In all likelihood, neither grants or scholarships will cover the full cost of your education, but they will help make it more affordable, and every bit helps.

Grants are usually either need-based or merit-based; need-based grants are designed to help low income students pursue an education, while merit-based grants focus on students who demonstrate exceptional academic achievement.

Scholarships, which are typically merit-based, are awarded to students who demonstrate academic strength.

How Much Money Is There?

Of the billions of dollars that are earmarked for education scholarships and grant programs, 37% comes from the Federal government, and 41% comes from colleges.

All of the money available doesn't even get claimed – only two thirds of undergraduate full-time students who could qualify were awarded a grant or scholarship through the FAFSA application. Many students miss out simply because they didn't take the time to apply.

That's right – every year, there are millions of dollars specifically allocated for grant and scholarship applicants that aren't claimed because people either didn't complete the application. In fact, 49 percent of people eligible for the Pell Grant would have qualified for an average of over $3,500 – but never applied.

On average, the total aid awarded to undergraduate students was over $8,400, while graduate students averaged over $9,200.

Get Started Applying Soon

When it comes to education funding, there's a lot of free money available, but in order to see how much you can get, you have to apply. Start as soon as possible by filling out the Free Application for Federal Student Aid, and search for information on scholarships. Take advantage of online services like ScholarshipOwl to make your scholarship search easier.