What is the difference between college grants and scholarships?

I often see the terms 'grants' and 'scholarships' used interchangeably when researching financial aid for college. Can someone explain the difference between them? Are they awarded based on different criteria, or is there much overlap?

Though both grants and scholarships represent forms of financial aid that do not need to be repaid, they are typically distinguished based on the criteria they utilize for awarding students.

Scholarships are often merit-based, awarded to students who have demonstrated exceptional achievements, such as high academic performance, athletic excellence, or involvement in community service. Some scholarships are industry or field-specific, targeting students with particular sets of skills or who are pursuing specific areas of study. For instance, a scholarship might be set up specifically for students showing promise in the arts, or those intending to major in STEM fields. Scholarships can be offered by colleges themselves, businesses, non-profit organizations, individuals, or other entities.

Grants, on the other hand, are typically need-based, meaning they are awarded primarily on the basis of financial need. They are designed to make education accessible to all students, regardless of their socioeconomic status. Examples of such grants include the Federal Pell Grant or the Federal Supplemental Educational Opportunity Grant (FSEOG). Grants can come from federal and state governments, or from colleges and universities.

There can be overlap between scholarships and grants; for example, some scholarships may consider financial need alongside merit, and some grants may target students in particular fields of study. However, the typical distinction is that scholarships reward accomplishments and merit, while grants primarily assist students with financial need.