How are grants different from scholarships?

As I'm researching ways to pay for college, I've come across both grants and scholarships as financial aid options. I think I understand the basics, but I'm still not entirely sure how they differ in terms of application processes, eligibility, or what they're generally used to fund. For instance, are grants more needs-based while scholarships are more about merit? Any details or examples would be super helpful while I navigate this!

You're right to be thinking about this because grants and scholarships, while similar, do function differently in many cases. Generally, both grants and scholarships are types of financial aid that don't need to be repaid, which is good news for students!

In terms of differences, grants are primarily need-based. Meaning they're typically awarded on the basis of financial need, as determined by the information provided on the Free Application for Federal Student Aid (FAFSA) or the CSS Profile. The most common type of grant you'll encounter is probably the federal Pell Grant, which is given to undergraduate students who display exceptional financial need.

Scholarships, on the other hand, are often merit-based. This encompasses everything from academic achievements, athletic skills, to other special talents. Some scholarships take financial need into account, but there is generally more emphasis on the student's achievements. An example would be the National Merit Scholarship Program, which awards scholarships based on students' PSAT/NMSQT scores.

The application processes for grants and scholarships can vary widely. For example, by simply submitting the FAFSA, you're applying for the aforementioned Pell Grant along with several other types of federal aid. On the contrast, scholarships often have their specific application procedures, like essay writing, interviews or auditions.

Despite the differences, it's important to remember that grants and scholarships are not mutually exclusive. Many students receive a mix of different types of financial aid in their packages, so it's a good idea to explore all options available to you. Each type of aid has its own deadlines and requirements, so keeping track of all those details would certainly be key to maximizing the financial aid you can get.