Explaining the Difference Between Grants and Scholarships

Explaining the Difference Between Grants and Scholarships

Both scholarships and grants are forms of gift aid, which is money for college that, in most cases, does not need to be repaid.

Although people often use the terms scholarships and grants interchangeably, they are not the same thing.


Grants,  like the Federal Pell Grant or the Federal Supplemental Education Opportunity Grant (FSEOG), are awarded based on the student’s demonstrated financial need. These grants typically come from the federal government, state governments and colleges and universities, but may also come from corporations, institutions and foundations.

Pell Grant eligibility and awards are determined by the data you provide on the Free Application for Federal Student Aid (FAFSA). Even if you don’t plan to borrow money, file the FAFSA to see what gift aid you may qualify for. You’d be surprised by the amount of available funds from the Pell Grant program that goes unclaimed every year.

Note: Most state grants require the applicant to file the FAFSA by a specific state deadline. Some states have additional application forms and requirements.


Scholarships are often awarded based on merit. Common types of merit-based scholarships include:

  • academic scholarships
  • athletic scholarships
  • STEM scholarships

Some scholarships are awarded based on standardized test scores (like the SAT and the ACT), or reserved for students participating in specific clubs or fields of study. It’s not uncommon for employers, unions, and public or private organizations to offer scholarships. StudentScholarshipSearch.com is an easy way to research scholarships you may qualify for.

Sweepstakes Scholarships (non-merit-based) are awarded randomly through drawings. ScholarshipPoints.com provides students with opportunities to earn points by completing surveys and activities with partners. These points can be redeemed for entry into various scholarship sweepstakes drawings like the $5,000 VIP Voice No Essay Scholarship . Check out our article on easy scholarships and sign-up with scholarship points to find simple, non-merit based scholarship opportunities.

Related: Go Fund Yourself: Cover Your Tuition Without Loans