As I explore options for paying for college, I'm starting to see a lot about scholarships and grants. It's a bit confusing, though. Can someone explain how the two differ? Do you apply for them in different ways, or is the process similar? Also, does one have to be repaid under certain conditions or are they both considered 'free' money? Any examples would be appreciated!
In the world of college financial aid, scholarships and grants can often seem similar, but they do differ in a few significant ways.
Scholarships are typically merit-based, meaning they are awarded based on the student's achievements. This might be academic merit (high grades or test scores), athletic prowess, or notable qualities or skills in art, music, leadership, community service, etc. A well-known example is the National Merit Scholarship, which is a merit-based scholarship awarded to approximately 15,000 high school seniors nationwide each year based on their PSAT/NMSQT scores.
Grants, on the other hand, are typically need-based, meaning they are given out primarily based on the student's (or their family's) financial situation. The most famous grant is the Federal Pell Grant, which is awarded by the U.S. Department of Education to students with exceptional financial need, based on the information they provide on their Free Application for Federal Student Aid (FAFSA).
In terms of the application process, it varies. For many scholarships, you need to apply directly by submitting an application to the providing organization. This application might include an essay, letters of recommendation, or proof of achievements. For grants like the Pell Grant, you would typically apply by filling out the FAFSA, which the federal government, states, and colleges use to determine your financial aid package.
In terms of repayment, here's the good news: neither scholarships nor grants typically have to be repaid, as both are types of 'free money'. They are unlike loans which do require repayment. However, there are certain conditions under which you might have to repay part of a federal grant, such as if you withdraw from school before finishing an enrollment period like a semester.
I hope this helps clarify things! Both scholarships and grants can be excellent ways to help cover the cost of college. It's worth investing your time in applying for as many as you qualify for.
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