How do grants and scholarships differ?

I've been looking into ways to fund my college education, and I keep hearing about both grants and scholarships. Although they both seem like financial aid that you don't have to pay back, I'm a little confused about how exactly they differ from each other. Are there specific criteria that separate the two, or is it more about where the money is coming from? Also, do you apply for them in the same way, or are there different processes depending on whether it's a grant or a scholarship?

Both grants and scholarships are indeed forms of gift aid, which means they do not have to be paid back. However, there are a few differences between the two, mostly relating to the sources of funding and the criteria for receiving them.

Grants are typically provided by federal and state governments, as well as some colleges. They are usually awarded based on financial need. This is determined by your family's income, assets, the cost of attendance at a given college, and other factors. Applying for grants often involves submitting the Free Application for Federal Student Aid (FAFSA) or the CSS profile for certain institutional grants.

Scholarships, on the other hand, can be awarded by various organizations, including colleges, local groups, national organizations, or private companies. Scholarships often have specific selection criteria, such as academic merit, athletic ability, leadership qualities, community service, or unique skills. Some scholarships might also be need-based, similar to grants. The application process for scholarships can vary widely depending on the organization offering them. Some might require an application form, while others might ask for an essay, letters of recommendation, or interviews.

Paid employment through work-study is another form of financial aid. Work-study jobs are usually part-time positions accessible to students with financial need, enabling them to earn money to help pay educational expenses.

Keep in mind that many students often combine multiple types of financial aid to cover their college expenses. It's important to research various scholarships and understand what you are eligible for - there’s a wide range out there. Work on your FAFSA and CSS Profile as early as possible, given that many schools and states offer aid on a first-come, first-served basis.