Scholarships and grants both fall into the best category of financial aid there is: money you never have to pay back. But they are awarded differently, and knowing the distinction helps you spend your application time where it counts.
Grants are usually based on need
A grant is typically awarded because you demonstrate financial need, most often established through your FAFSA. Federal, state, and school-based grants all draw on the same information, which is one reason filing the FAFSA every year matters even if your first attempt didn’t qualify for much — your eligibility is reassessed annually.
Scholarships are usually based on merit or identity
A scholarship is typically awarded for something about you: academic performance, athletic or artistic talent, intended major, community involvement, or membership in a particular group. Because criteria vary so widely, scholarships come from a much broader range of sources — your school, employers (yours or a parent’s), professional associations, local civic groups, and private foundations.
Where they overlap
Some awards blend both ideas, requiring a minimum GPA and financial need together. Most also come with renewal conditions — a grade requirement, continued enrollment, or a yearly reapplication — so read the fine print on anything you’re awarded, not just the initial application.
A practical way to search for both
- File the FAFSA first, even if you expect little need-based aid — it also opens the door to loans and work-study.
- Ask your school’s financial aid office directly what institutional grants and scholarships you’re automatically considered for.
- Search scholarships by your specific major, hobbies, background, or intended career, not just generic “college scholarship” searches — smaller, specific awards usually have far less competition.
- Reapply every year. Both grants and scholarships are commonly re-evaluated annually.
Neither one needs to be repaid, which is exactly why it’s worth the extra time to pursue both rather than defaulting to loans.
