Understanding Scholarships vs. Grants

I'm trying to get all my financial aid info straight as I begin looking at colleges. I often hear about scholarships and grants, but I'm not entirely clear on how they differ. Are there specific conditions for each? Like, are scholarships always merit-based, and grants need-based? How do they affect financial aid packages differently? Any insights would be great since I'm starting to narrow down my list of schools!

Great question! Understanding financial aid can indeed be a bit complex. Let's break down the differences between scholarships and grants, as well as how they affect your financial aid package.

Scholarships are typically awarded based on merit, meaning they're given to students due to their achievements. This can be anything from academic prowess, artistic talent, athletic performance, to particular extracurricular involvement. For example, a student who excels in soccer could be awarded an athletic scholarship from a school looking to enhance their soccer program.

Grants, on the other hand, are usually need-based, implying they're adopted to students who demonstrate financial need. Schools, governments at various levels, and other organizations offer these. The Pell Grant, provided by the federal government to low-income undergraduate students, is a commonly known example.

Regarding how they affect your financial aid package, both scholarships and grants are types of "gift aid," which means they are money you don't need to repay. They effectively reduce the cost of attendance. In general, when colleges make up your financial aid package, they consider all sources of aid you are receiving. If you receive a scholarship or grant outside of the school's financial aid, a school often uses it to replace the loan component of the aid package rather than reduce the school's own grant aid.

When researching schools and factoring the costs, do consider each school's commitment to meet full demonstrated need if you are a student with financial need. Schools that meet full demonstrated need will use a combination of grants, scholarships, work-study, and perhaps loans to ensure that they meet 100% of your family's need. Some schools are also "no-loan," which means your aid package won't include loans, making these schools especially affordable if they also meet full need.

Also, don't forget to fill out the FAFSA and, if required by the school, the CSS Profile, to qualify for as much aid as possible. The FAFSA is what will determine your eligibility for federal aid (like Pell Grants), and many schools also use it (or the CSS Profile) to determine your eligibility for their own need-based aid.

Remember to make sure you understand each school’s financial aid policies and reach out to their financial aid offices with any questions. They exist to help you navigate this process!