Are Grants Scholarships

When it comes to financial aid for education, there is a lot of confusion when it comes to grants and scholarships. But, are grants scholarships? In fact, there conjectures about both, with many opining that grants and scholarships are one and the same.

In October 2021, I attended a small sensitization event on college-funding opportunities for young college prospects in the state of Alabama, and one individual who came to the event got up to address the group and dared to claim that grants are the same as scholarships and that both terms could be used interchangeably and would still mean the same thing.

I honestly could not help it and found myself laughing out loud. I mean, how could any one boldly make such a claim and still go on to state that he’s very sure of what he just said? To my total amusement, though, i found that there are many like him at the event who had the believed the same thing. And, this raises serious questions that we may need to settle once and for all. I mean, are grants scholarships? Could one use both the same way or approach them in the same manner?

The answer is that grants are not the same as scholarships. While it is true that both are forms of financial aid that can help you pay for college, you must also take note that there are some key differences between the two. And the key difference is that while grants are usually need-based (meaning they are awarded based on your financial situation), scholarships, on the other hand, can be merit-based or need-based. This means that scholarships may be awarded based on your academic achievements or your financial situation (or both).

In this article, we will look deeper into the key differences between both forms of financial aid so that you can know which to go for depending on what your needs are. So, what are grants and scholarships?

What are grants?

Simply put, grants are need-based financial aid that are provided by government, corporation and organizations, to individuals or groups to pay for imperatives that they normally would not have been able to afford. This is why there are grants options in different facets of our everyday existence, and the idea is to use these grants to make life easier for people.

For example, if you would like to have your own house but cannot afford to cover all the costs yourself, there are grants that are designed to help you achieve the dream. In the same vein, there are grants that are designed to help cover medical treatment, there are grants designed to help you feed your family, there are grants that are designed to help you get through school, and, hold your breadth at this point because you almost won’t believe this, that there are grants meant to help you buy a car.

So, while scholarships are usually merit-based and are usually for educational purposes, grants are need based and is the reason why many are still staying afloat today. This is because grants tend to be more generous than scholarships. However, this is not to say that scholarships are not beneficial to you as you will see in the course of this article. So, what are scholarships then?

What are scholarships?

Now that you what grants are, it is only fair that we know what scholarships are, right? So, what are scholarships?

THere are a lot of different types of financial aid available to students, and it can be confusing to try to figure out what’s what. But it’s important to understand the difference between grants and scholarships, because they can have a big impact on your college finances.

Scholarships are academic aid packages offered by governments, organizations or institutions, either in form of cash, free education or some other benefits, to individuals who have exhibited outstanding academic or sporting capabilities over a specific period of time.

What that means is that while grants are usually need-based, meaning that they are awarded based on your family’s financial circumstances, scholarships, on the other hand, are usually merit-based, meaning they are awarded based on your academic or athletic achievements.

However, both grants and scholarships can be either renewable or one-time awards. Renewable awards mean that you will receive the money each year that you are in college, as long as you continue to meet the requirements for the award. One-time awards are just that – you get the money once, and then it’s gone.

So, now that you know that grants are not scholarships, how do you know if you should apply for a grant or scholarship? The best way to find out is to research the different types of aid available and then talk to your guidance counselor or financial aid office at your college. They can help you figure out which awards you might be eligible for and how to go about applying for them.

What are the most common types of US grants?

There are four main types of US grants:

  1. Competitive Grant
  2. Formula Grant
  3. Renewal Grants
  4. Pass-Through Grants

1. Competitive Grants/Merit-Based grants:

This kind of grant, also referred to as “discretionary” funding, is given out through a competitive procedure that includes choosing proposals based on the opinions of one or more reviewers. This kind of financing is not fixed for particular groups or individuals; but it is rather determined by the qualities of submitted applications.

Scientific research grants, various student-tuition grant schemes, and financing for the arts and humanities are all examples of competitive grants.
One thing that you must keep in mind when applying for grants under this category, is that understanding the grant’s requirements is essential. This is because it is the only way to make sure your application is as strong as it can be.

2. Formula Grants:

Formula grants, in contrast to competitive grants, are given to predefined recipients; the word “formula” refers to the method used to distribute grant cash to recipients. For this reason, formula grants are non-competitive.

Funding organizations must also follow the methodology for this type of funding, which was established by laws and regulations, while distributing funds. Typically, a predetermined formula is used to distribute the money from formula grants across the States. The decisions regarding which projects to assist are then decided locally, and the funds will be allocated accordingly. One important factor, though, is that the funds will be made available to all qualified applicants who satisfy the minimal standards outlined in the application procedure.

The Federal Government’s payments to State and Local Governments for Programs Like Medicaid as well as some transportation and infrastructure grants are examples of formula grants.

3. Pass-Through Grants: 

State agencies or institutions usually receive pass-through grants from the federal government. According to the general grant eligibility criteria for such grants, the monies can then be transferred to additional State agencies, local government entities, or other qualified parties.

States may then choose to distribute these money under this funding system in a competitive or non-competitive manner depending on the conditions and enabling legislation of the award in question. As a result, the State governments have autonomy and sole discretion to use federal grant money.

Also, prospective candidates should be note that they must apply for pass-through funding only through the state’s grants office.

4. Renewal or Continuation Grants:

The option of an extension or renewal of current program financing is provided to award recipients of continuation grants, as the name suggests. According to, this can be used to extend grants that would otherwise expire for one or more extra budgetary periods. Depending on the grant program, some programs may only accept applications from current grantees while others may welcome both new and continuing grantee applications.

It’s important that you keep in mind, that forming a relationship with the funding organization may be to your advantage if you are a new application, because continuing applications are usually given precedence for continuation funding grants.

READ ALSO: PA state student grants for US students

Some grant and scholarships awards for you

Grants awards:

  1. Federal Pell Grants:  are the most common type of grant, and are need-based grants for undergraduate students who have not yet earned a bachelor’s or professional degree.
  2. Federal Supplemental Educational Opportunity Grants:  are reserved for undergraduates with exceptional financial need.
  3. Teacher Education Assistance for College and Higher Education Grants:  are awarded to postsecondary teachers to help them pay for their education expenses.
  4. Iraq and Afghanistan Service Grants:  are awarded to students whose parent or guardian died as a result of military service in Iraq or Afghanistan after September 11, 2001.

You can also find grants from State Departments of Education or scholarships here to help defray the cost of college.

How do you apply for a grant or scholarship?

The process for applying for a grant or scholarship usually varies depending on the organization or foundation offering the funding. However, there are some general tips and advice that can help you through the process.

Here are some things to keep in mind when applying for a grant or scholarship:

  1. Read the eligibility requirements carefully: Read the requirements carefully and make sure you understand all of the criteria before starting your application.
  2. Collect all of the required materials: This may include transcripts, essays, letters of recommendation, and more.
  3. Follow the instructions for submitting your application: This may mean sending everything in electronically, mailing it to a specific address, or hand-delivering it to the office.
  4. Be patient: The review process can take several weeks or even longer. Don’t give up if you don’t hear back right away.

Always remember that, if you take the time to prepare a strong application, you increase your chances of being awarded a grant or scholarship.

How are they different?

You already know that grants and scholarships are both types of financial aid that can help you pay for college. However, there are some differences between the two as you already know. The main difference between the two is that grants are typically need-based, while scholarships are usually merit-based.

That is, need-based grants are awarded based on your family’s financial situation. Merit-based scholarships, on the other hand, are awarded based on your academic achievement or athletic ability.

Both grants and scholarships can come from the federal government, your state government, your college or university, or private organizations. So, if you’re looking for financial aid to help pay for college, it’s important to research all of your options to find the best fit for you.

Which one is better?

There are a lot of different types of financial aid available to students, and it can be confusing to know which one is the best for you. Grants and scholarships are both great options, but which one is better? The answer is that they are both okay, depending on your own abilities as well as the options available to you.

Grants are usually based on need, so if you have a low income or are facing other financial challenges, grants may be the better option for you. Scholarships are usually merit-based, so if you have good grades or other achievements, scholarships may be the better option. So, now you see? In reality, one is not better than the other.

Ultimately, the best option for you depends on your individual circumstances. However, if you ever find yourself at crossroads about choosing one of them, you should talk to a financial aid advisor at your school to learn more about your options and figure out which one is best for you.

What are the benefits of grants?

Normally, grants are a form of financial aid that do not have to be repaid, making them a great option for students who need help paying for college without taking student loans. Grants can come from the federal government, state government, colleges and universities, or private organizations. The main benefit of grants is that they provide free money for college that does not have to be repaid.

Also, the fact that grants are awarded based on the student’s financial need means that grants are typically only available to students who demonstrate financial need through their Free Application for Federal Student Aid (FAFSA). However, there are also some merit-based grants available, which are awarded based on the student’s academic achievement.

Grants can be used to pay for tuition and fees, room and board, books and supplies, and other educational expenses. Some grants may also have additional restrictions on how they can be used, so it is important to check with the grant provider before using the funds.

If you are looking for ways to finance your education, grants can be a great option. Just be sure to research all of your options and find the best fit for your needs before making a decision.

What are the benefits of a scholarhip?

Just as there are benefits to grants, there are also many benefits of scholarships which include but are not limited to:

  1. Helping students pay for their education and relieve the financial burden that comes with attending college.
  2. Helping students focus on their studies and academics instead of worrying about how they will pay for school.
  3. Providing opportunities for students to attend colleges and universities that they may not have been able to attend otherwise.

Need financial help? Why you should consider applying for grants and scholarships at the same time

Do not forget that while grants tend to be renewable, while scholarships are typically one-time awards. This means that if you receive a grant, you may be eligible to receive it again in future years as long as you continue to meet the eligibility requirements. Scholarships, on the other hand, are usually awarded for a specific academic year and must be reapplied for each year that you wish to receive them.

But, is it possible to get both at the same time? The answer is that you can. Getting a combination of both grants and scholarships is not totally impossible if you can demonstrate financial need and extraordinary academic/sporting prowess at the same time (and as long as the program allows to use different financial aid programs at the same time). If you want to try something like this, make sure you take note of the requirements of both awards and fulfil both criteria as stated.


Now that you know that grants and scholarships are not the same, it should help you know just how to make sure when in need of financial aid. Grants are usually need-based, meaning they are given to students who demonstrate financial need, while scholarships, on the other hand, can be based on financial need or merit. Also, merit-based scholarships are given to students who have achieved academic or athletic excellence.

So, depending on what you qualify for, you can now find the help that you need to pay for that degree.


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