What’s the Difference Between a Grant and a Scholarship?

Grants and scholarships are two types of financial aid — money to help cover education costs that you don’t need to repay.

Understanding how grants and scholarships work is key to finding and applying for the financial aid opportunities that best suit your needs and goals.

While this article explores the differences between grants and scholarships, you don’t need to pick one or the other. In fact, many students combine multiple scholarships and grants to pay for their educational costs.

It’s a good idea to look into financial aid like grants and scholarships before you explore taking on student loans. Every dollar you receive in grants or scholarships now is one less you’ll need to pay back later.

What is a grant?

A grant is a type of student financial aid, also referred to as gift aid, that doesn’t need to be repaid. Most grants are need-based, meaning they’re awarded based primarily on your financial situation rather than your grades, test scores or achievements.¹

How is financial need determined for grants?

Different grant programs assess financial need differently. Here’s what you can usually expect:

• Federal and school-based grants: Your financial need is determined using information from the Free Application for Federal Student Aid (FAFSA), a single form used for applying to many types of federal student aid at once.² When you submit the FAFSA, the federal government calculates your Student Aid Index (SAI), a number that reflects how much money you and your family may be able to spend on school expenses.³ Then, your school subtracts your SAI from its total cost of attendance to see how much federal and school-based financial aid you’re eligible to receive.
• State-based grants: State-based grants may use your FAFSA application and SAI to determine financial need. Depending on where you live, you may need to fill out a different form in addition to the FAFSA.⁴
• Organizations offering private grants: Private grant programs have their own application processes. For need-based private grants, you may need to submit financial documents, such as tax returns or pay stubs, instead of or in addition to your FAFSA.

Additional requirements

Some grants are intended to support students from many diverse circumstances, such as first-generation college students. In some cases, you may also need to submit a personal essay, a written recommendation or other documentation. For instance, if the grant is for students whose parent works in public service, you may need to submit proof of employment.

If you’re a graduate or professional student applying for a research grant, you’ll likely need to submit a proposal outlining your project’s goals, methods and timeline.

Some grants, such as the federal TEACH Grant, may require you to take certain steps after graduation — like committing to work in a particular field for a set number of years.⁵

What is a scholarship?

A scholarship is another form of gift aid that doesn't need to be repaid. While financial need is one factor for some scholarships, they may also be awarded for special skills and accomplishments, such as:

• High grade point average (GPA) or test scores
• Exceptional athletic or artistic ability
• Community service or volunteer work

Applying for scholarships may seem a lot like applying for college. Submitting transcripts, letters of recommendation, or personal essays are common steps. Some application processes may also include an interview.

Certain kinds of scholarships have additional steps. Applying for a scholarship for dance or theater programs could involve an audition video, for example. If a scholarship is for writing or design, you may need to show a portfolio of your work. If you’re being considered for an athletic scholarship, someone from the school’s athletic program could attend a game to watch you in action.

Some scholarship programs focus on specific types of students. For example, a professional organization may offer scholarships to students pursuing a particular major, or a nonprofit might offer aid to students with a parent in the military. In such cases, you may need to provide documentation — like proof of your enrollment in a qualifying program or a parent’s military ID — to show you’re eligible.

Grants vs. scholarships: What’s the difference?

Let’s take a look at some of the differences and similarities between grants and scholarships.

	Grants	Scholarships
Repayment necessary?	No	No
Sources	Federal government, state, college/university or private company/organization	Federal government, state, college/university or private company/organization
Most often awarded based on	Financial need	Achievement, skill or background
Typical application requirements	FAFSA submission usually required. May require other financial documentation. In some cases you may also need to submit plans for how the grant will be used.	Essays, recommendations, interviews or transcripts. FAFSA submission often required. Additional requirements may apply, depending on the type of scholarship

Grants are usually need-based and scholarships are typically merit-based. However, some scholarships consider financial need, and some grants have additional merit requirements. It’s important to look at the individual eligibility requirements before applying for grants or scholarships.

Where to find grants and scholarships

When deciding how to pay for your education, it’s good to have options.

You can find information about grants and scholarships from the following places:

• Your college’s financial aid office: Ask about different grants and scholarships that are offered to students at your school.
• U.S. Department of Labor free scholarship search tool: The Scholarship Finder helps you find options that match your interests, background or goals.⁶
• Local businesses and organizations: Law firms, banks and community organizations, like your local Lions Club or 4-H chapter, may offer opportunities with less competition than nationally available scholarships.⁷
• Your high school guidance counselor: They may be able to point you to available scholarships or grants and share ideas to improve your applications.
• Professional associations in your major or career field: Many groups offer scholarships for potential future members.

How to apply for grants and scholarships

To apply for federal, state or school-based scholarships and grants, you should start by filling out the FAFSA as soon as possible after the form opens — usually October 1.

The federal deadline to submit the FAFSA form is usually June 30, but check the most recent FAFSA deadlines, since they may change periodically.⁸ Remember, too, that state deadlines for FAFSA submission may be sooner than the federal deadline. You may find it helpful to keep a calendar or spreadsheet dedicated to application deadlines.

For private scholarships and grants, applications and deadlines can vary. Always read the instructions carefully and reach out to your school’s financial aid office if you have questions along the way.

What to keep in mind before applying

As you search for financial aid opportunities, your mindset matters just as much as where you look. Having clear expectations about how the application process works and your chances of approval may help you feel more in control and less stressed about finances.

Here’s what to know:

Applying early is key

Giving yourself plenty of time to complete your applications may improve your chances of getting the money you need. Whether it’s the FAFSA or an application to a private grant or scholarship, missing a deadline could mean you miss out on valuable funding, and application deadlines might be earlier than you’d expect. In fact, some scholarship application windows end a year before you start school.⁹

You have more options to pay for school

You won’t get every award you apply for, and that’s okay. If gift aid doesn’t fully cover your education costs, subsidized and unsubsidized student loans could help fill the gap. If you’re still a dependent, your parents may choose to take out a parent PLUS loan, a federal loan in their name that helps cover undergraduate educational costs.¹⁰

Questions to ask before you apply

Applying for grants and scholarships takes time. Make the most of your efforts and choose the most impactful opportunities to apply to by checking these factors before diving in.

• Am I eligible for this grant or scholarship? Does your GPA, field of study or income match what the grant or scholarship is looking for?
• Can I meet the application deadline? Will you have time to complete the application? If two grants or scholarships share a deadline and both applications involve a lot of work, consider focusing on the one that best matches your strengths and eligibility, or the one that offers the higher award.
• What is the amount offered? Since grants and scholarships don’t need to be repaid, it makes sense that you’d want to target the ones that offer the most money, and many students do. However, smaller awards also add up — and may have less competition. Applying for a mix of large and small opportunities may boost your overall chances of receiving aid.
• Can the grant or scholarship be renewed? Some grants and scholarships renew each school year. If the opportunity you’re considering renews, will you need to reapply annually or maintain a certain GPA to stay eligible?

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Explore every option before borrowing

Applying for grants and scholarships is a smart first step when you’re deciding how to pay for higher education. Exploring a wide variety of funding sources could open doors to unexpected opportunities. Whether you’re awarded a few hundred dollars or several thousand, every grant or scholarship you earn is one more step toward a future with less student debt and more financial freedom.

Sources

1 https://www.debt.org/students/scholarships-and-grants/need-based-scholarships-grants/
2 https://studentaid.gov/h/apply-for-aid/fafsa
3 https://studentaid.gov/help-center/answers/article/how-sai-calculated
4 https://bigfuture.collegeboard.org/pay-for-college/get-help-paying-for-college/state-financial-aid
5 https://studentaid.gov/understand-aid/types/grants/teach
6 https://www.careeronestop.org/Toolkit/Training/find-scholarships.aspx
7 https://scholarships360.org/scholarships/local-scholarships/
8 https://studentaid.gov/apply-for-aid/fafsa/fafsa-deadlines#fafsa-deadlines-2025-26
9 https://studentaid.gov/understand-aid/types/scholarships
10 https://studentaid.gov/understand-aid/types/loans/plus/parent