College grants are a form of financial aid that can be used to pay for tuition, room and board, and related school expenses. Unlike college loans, grants do not need to be paid back, which is why they are often referred to as “free money” for college.
Grants are typically awarded based on financial need, though, in some cases, merit comes into play. Either way, getting grants can be competitive. Read on for a closer look at how grants work, including common eligibility requirements, and how to find and apply for grants.
Key Points
• College grants provide free money for tuition, room and board, and other school expenses, and typically do not need to be repaid.
• Federal grants, including Pell Grants and FSEOG, are awarded based on financial need and require filling out the FAFSA.
• Some grants, such as the TEACH Grant, require recipients to fulfill service obligations to avoid loan conversion.
• State governments, private organizations, and nonprofits also offer grants for specific student demographics or career fields.
• Students should apply for grants early, as some are awarded on a first-come, first-served basis.
College Grants vs Scholarships — What’s the Difference?
Scholarships and grants for college both represent “gift aid,” since the money generally does not have to be repaid. Dropping out of college or switching to part-time enrollment are a couple of exceptions that may require paying back a grant or scholarship.
The main difference between grants and scholarships is that grants tend to be based on financial need, whereas scholarships are more commonly awarded based on a student’s achievements or merit. Scholarships may also be offered to students of a specific ethnicity or group, such as Native Americans or the LGBT community.
The source of funding also tends to differ. Funds for college grants typically come from the federal and state government, whereas scholarships are usually offered through private companies, colleges and universities, non-profits, and other organizations.
Another distinction between grants vs. scholarships is the application process. To apply for grant opportunities, you generally just need to complete the Free Application for Federal Student Aid (FAFSA). To apply for scholarships, you often need to fill out a separate application (which may require writing an essay) for each scholarship.
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Types of Federal College Grants
Federal grants for students attending community college, career schools, and four-year colleges are offered through the U.S. Department of Education. Here is a list of federal grants for college students.
Pell Grants
The Pell Grant is the Department of Education’s largest grant program. Pell Grant funding changes from year to year, and is geared towards students who demonstrate significant financial need. The maximum Pell Grant total for the 2023-2024 award year is $7,395.
The amount an eligible student receives is calculated according to enrollment status, cost of attendance, Student Aid Index (SAI) (formerly called the Expected Family Contribution, or EFC), and duration of study.
It’s worth noting that the award amount for Pell Grants is not impacted by other forms of financial aid. Often, a Pell Grant is awarded in combination with other federal financial aid, such as work-study and subsidized student loans.
Recommended: The Differences Between Grants, Scholarships, and Loans
Federal Supplemental Educational Opportunity Grant (FSEOG)
The FSEOG program is another grant for students with exceptional financial need to pay for college expenses. FSEOG awards range between $100 and $4,000 a year.
Individual grant totals are calculated by overall financial need, timing of the application, total financial aid, and funding availability within the college.
Though FSEOG is funded through the Department of Education, it is administered by participating schools — and not every college participates. Check with a college’s financial aid office to learn if FSEOG is an option for assistance.
Iraq and Afghanistan Service Grants
This program has more specific criteria than financial need alone. Students may qualify for a grant if their parent or guardian died while serving in the U.S. armed forces in Iraq or Afghanistan after 9/11. To qualify, you must have been under 24 years old or enrolled in college at least part-time at the time of your parent’s or guardian’s death.
Additional requirements for the Iraq and Afghanistan Service Grant include failing to qualify for a Pell Grant due to Expected Family Contribution/Student Aid Index but satisfying the remaining eligibility Pell Grant criteria.
Grant funding is equal to the maximum Pell Grant award for any given year. Thus, grants can be up to $7,395 for 2023-2024, depending on financial need and the cost of attendance at the applicant’s college.
TEACH Grants
The Teacher Education Assistance for College and Higher Education (TEACH) Grant program offers awards up to $4,000 per academic year for students pursuing a career in teaching.
Compared to other federal grants for college, TEACH grants carry more stringent requirements. For instance, recipients must fulfill a service obligation of teaching in a high-need subject area at a school or educational service agency for at least four academic years within eight years of completing TEACH grant-funded studies.
Otherwise, the TEACH grant is converted into a direct unsubsidized loan which must be repaid in full with interest accrued from the date of the initial award.
To qualify for a TEACH grant, students must attend a participating school and achieve high academic performance (GPA of at least 3.25 or college admissions test scores above the 75th percentile). Additionally, recipients must partake in counseling sessions and sign a TEACH Grant Agreement to Serve.
Applying for Federal College Grants
Students looking for federal grants for college can begin the process by filling out the FAFSA. The FAFSA considers factors like the student income and parental income and assets to calculate the SAI (formerly called the EFC), which is used by schools to determine how much money students are eligible to receive.
After completing the FAFSA, students will receive a financial aid package from each college they applied and have been accepted to. This includes a breakdown of any eligible financial assistance, including grants, scholarships, work-study, and federal student loans.
Take note that students need to fill out the FAFSA every year they’re enrolled in college to be eligible for grant awards and other financial assistance.
Since some grants are awarded on a first-come-first-served basis, be sure to pay attention to FAFSA deadlines, and submit the form as early as possible.
Other College Grants for Students
In addition to federal grant programs, there are opportunities to get free money for college from state governments, nonprofits, and private organizations.
State Grants
There are state-level grants for students to consider too. For example, there are numerous California scholarship and grant opportunities to help students pay for school. Every year, the Cal Grant provides 41,000 awards to undergraduate, vocational, and teacher certification students.
Filling out and submitting the FAFSA may automatically make you eligible for certain state grants. In some cases, though, you might also have to apply to your state’s education department.
To find funding in any given state, you can use the National Association of Student Financial Aid Administrators online database .
Keep in mind that some state government scholarship and grant programs have different deadlines than FAFSA.
College Grants for Women
There are a variety of college grants geared specifically to women. Here are a couple grant programs women can apply to for college and graduate school.
• Program for Continuing Education Grant : The Philanthropic Education Organization offers one-time need-based grants for women in the U.S. and Canada to put towards college and education-related expenses.
• Career Development Grant : The American Association of University Women provides grants between $2,000 to $12,000 to female students pursuing an advanced degree or certificate.
Finding Additional Grants
In addition to state and federal grants or grants, private companies and nonprofits may also offer grants. Students may have to do a little leg work to find these opportunities, but a chance at free money for college can be worth a little time invested up front. Online databases like Scholarships.com have a variety of grant opportunities for students to peruse.
💡 Quick Tip: Even if you don’t think you qualify for financial aid, you should fill out the FAFSA form. Many schools require it for merit-based scholarships, too. You can submit it as early as Oct. 1.
The Takeaway
College grants are a helpful way for eligible students to pay for school and reduce student debt. In 2022-2023, scholarships and grants were used by 76% of families and covered 29% of costs.
Even so, many students require additional financing to pay for college. If grants, other aid, and federal student loans are enough to cover the cost of your college education, you may want to consider applying for a private student loan. These are available through private lenders, including banks, credit unions, and online lenders. Loan limits vary by lender, but you can often get up to the total cost of attendance, which is more than you can borrow from the federal government. Interest rates may be fixed or variable and are set by the lender. Generally, borrowers (or cosigners) who have strong credit qualify for the lowest rates.
Keep in mind, though, that private loans may not offer the borrower protections — like income-based repayment plans and deferment or forbearance — that automatically come with federal student loans.
If you’ve exhausted all federal student aid options, no-fee private student loans from SoFi can help you pay for school. The online application process is easy, and you can see rates and terms in just minutes. Repayment plans are flexible, so you can find an option that works for your financial plan and budget.
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