If you’re looking for ways to pay for college, you’ve probably seen the terms “grant” and “scholarship” used together. That’s because both can help lower your college costs without adding to your student loan balance. But, while grants and scholarships are both forms of financial aid, they’re not exactly the same. 

In this blog, we’ll discuss the difference between these types of aid and how to find opportunities that may help make college more affordable. 

Grant vs. Scholarship: What is the Difference? 

The difference between a grant and a scholarship is how students typically qualify and where the aid comes from. Grants are often tied more directly to financial need and may come from federal, state, or school-based aid programs. Scholarships can also be need-based, but they can be awarded based on a wider range of criteria, including academics, talents, background, field of study, community involvement, financial need, or other qualifications.  

In most cases, neither has to be repaid as long as you meet the program requirements. 

Grant vs. Scholarship: Quick Comparison 

Category	Grant	Scholarship
Typical Basis	Often financial need	Financial need, merit, talent, background, interests, major, community service, or other criteria
Common Funding Sources	Federal government, state government, colleges, and some organizations	Colleges, nonprofits, private companies, community groups, employers, and organizations
Application Process	Often starts with the FAFSA, though some grants may require additional steps	Often requires a separate application, essay, recommendation, portfolio, or transcript
Do You Repay It?	Usually no, unless eligibility requirements are not met	Usually no, unless program rules are not met
Best For	Students who demonstrate financial need	Students who meet need-based, merit-based, or other specific eligibility requirements

What is a Grant? 

A grant is a type of financial aid that is typically awarded based on financial need. Many grants come from the federal government, state governments, or colleges and universities. For example, federal grants may be offered to eligible undergraduate students who demonstrate financial need after completing the FAFSA. 

Common examples of federal grants include the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, and TEACH Grant. Grants generally do not need to be repaid, but there are exceptions. For example, a student may have to repay part of a grant if they withdraw from school early, change enrollment status, or do not meet specific service obligations tied to the grant. 

What is a Scholarship? 

A scholarship is another form of financial aid that usually does not have to be repaid. Scholarships may be awarded for many reasons, including financial need, academic achievement, athletic ability, artistic talent, leadership, community service, career goals, field of study, personal background, or a combination of factors. 

Scholarships can come from colleges, private companies, nonprofits, local community organizations, professional associations, and other groups. Some scholarships are quick to apply for, while others may ask for essays, transcripts, letters of recommendation, interviews, or proof that you meet certain eligibility requirements. 

How Are Grants and Scholarships Similar? 

Grants and scholarships are both often called “gift aid” because they can help pay for college without requiring repayment in most cases. That makes them different from student loans, which must be paid back with interest. 

Because grants and scholarships may come from different sources and have different requirements, it’s a good idea to apply for both. Even smaller awards can add up and help reduce the amount you may need to borrow for tuition, fees, housing, books, supplies, and other education-related expenses. 

How to Apply for Grants and Scholarships 

1. Complete the FAFSA. The FAFSA is the starting point for many federal, state, and school-based financial aid opportunities, including grants. 

2. Review your financial aid offer. After you’re accepted to a school, your financial aid offer may include grants, scholarships, work-study, and loan options. 

3. Search for scholarships early and often. Look for opportunities through your school, local organizations, employers, professional groups, and trusted scholarship search tools. 

4. Track deadlines. Grant and scholarship deadlines can vary, and some funds may be limited. 

5. Read the renewal requirements. Some awards require students to maintain a certain GPA, enrollment status, major, or service commitment. 

Is a Grant or Scholarship Better? 

One isn’t automatically better than the other. The best option is the one you qualify for and can use toward your education costs. Since grants and scholarships usually do not need to be repaid, students should look for as many opportunities as possible before considering loans. 

Frequently Asked Questions 

Do grants and scholarships have to be paid back? 

In most cases, grants and scholarships do not have to be paid back. However, students should always review the requirements. Some grants or scholarships may need to be repaid or may be lost if a student withdraws, changes enrollment status, does not meet renewal requirements, or fails to complete a required service commitment. 

Do you need the FAFSA for scholarships? 

Not always. Many private scholarships use their own applications and may not require the FAFSA. However, some school-based or need-based scholarships may use FAFSA information to determine eligibility, so completing it can help you access more financial aid opportunities. 

Can you get both a grant and a scholarship? 

Yes. Many students receive a mix of grants, scholarships, work-study, family contributions, and loans to pay for college. Just keep in mind that outside scholarships may affect your overall financial aid offer, depending on your school’s policies. 

Should I apply for grants or scholarships first? 

Start by completing the FAFSA so you can be considered for federal, state, and school-based aid. Then keep applying for scholarships throughout the year. The more aid you can secure, the less you may need to borrow. 

Final Notes 

Grants and scholarships can both help make college more affordable, but they usually differ in how they’re awarded and where they come from. Grants are often tied more directly to financial need, while scholarships may be based on financial need, merit, talents, background, interests, or other eligibility criteria. Applying for both can help you maximize free aid before turning to student loans.