Clarifying the difference between a grant and a scholarship in college funding

As a junior starting to think about paying for college, I'm trying to understand the difference between grants and scholarships. They both seem to offer money that doesn't have to be repaid, which is great, but are there key differences in how they're awarded or who is eligible? Also, do they affect each other if you receive both, like one reducing the amount of the other? Grateful for any insights!

You're right in noting that both scholarships and grants are forms of financial aid that do not need to be repaid, which makes them highly sought after options for paying for education. However, there are some key differences between them that are primarily based on the criteria used for eligibility and the source of the funding.

Grants: These are typically need-based, which means they are given to students who demonstrate financial need. This need is usually determined through forms like the FAFSA (Free Application for Federal Student Aid) and the CSS profile. The federal government is a major source of grants, like the Pell Grant, but you may also find state-level or institutional grants.

Scholarships: Generally, scholarships are merit-based, meaning they are awarded to students exhibiting high achievement in areas like academics, athletics, or the arts. They may also be provided to students planning to study in certain fields or to those with certain demographic characteristics. Scholarships can come from various sources such as private organizations, community groups, corporations, and universities themselves.

The interplay between grants and scholarships depends on the specific policies of the school and of the individual programs offering the financial assistance. In some cases, earning a large scholarship may reduce the amount of need-based aid (like grants) you are awarded, because the scholarship income reduces the calculated financial need. On the other hand, merit-based scholarships shouldn't impact other merit-based aid, although school-specific policies may vary. It's always a good idea to check with the financial aid office at the particular college for the most accurate information.

Regarding application processes, grants usually require filling out the FAFSA (and sometimes the CSS Profile for some universities), while scholarships often require separate applications, can have additional eligibility requirements or criteria, and usually involve much more competition.

In summary, both grants and scholarships are valuable means to finance your college education and are worth pursuing, but their criteria, eligibility requirements, and sources can vary significantly.