Grants vs. Scholarships: Paying for College with Gift Aid

Going to college doesn’t have to lead to debt. According to 2017-2018 data from Sallie Mae, three in five college students received one or more scholarships or grants, and about 28% of those students’ educational costs were covered by these awards. In fact, a larger percentage of college costs were covered through gift aid than through student loans or borrowed money (only 24% of college costs were covered through loans).

If you need help funding your college education but want to avoid taking out student loans, grants and scholarships may be the perfect choice for you. Student loans, grants, and scholarships are available to those who qualify. In this post, we’ll explore two ways you can fund your education without having to pay that money back later on: grants and scholarships.

What is a grant?

Grants are often referred to as “gift aid” because, unlike loans, they do not need to be repaid (except in certain scenarios). Grants are usually need-based, which means an applicant must demonstrate financial need in order to be eligible. Most grants come from either the federal government or a state government, but some colleges and career schools also offer grants to students who meet certain criteria.

Types of Federal Grants

Federal Pell Grant

Maximum Award*:$6,195

Federal Pell Grants are reserved for students who:

• Are a graduating high school senior or undergraduate student
• Have never earned a bachelor’s, graduate or professional degree
• Can demonstrate exceptional financial need through completion of their FAFSA®****
• Are a U.S. citizen and/or eligible for federal student aid

For more information visit studentaid.gov.

Federal Supplemental Educational Opportunity Grants (FSEOG)

Maximum Award*: $4,000

Federal Supplemental Educational Opportunity Grants are reserved for students who:

• Are a graduating high school senior or undergraduate student
• Have never earned a bachelor’s, graduate or professional degree
• Can demonstrate exceptional financial need
• Are a U.S. citizen and/or eligible for federal student aid

Preference is given to students with the lowest expected family contribution (EFC) 

For more information visit studentaid.gov. 

Teacher Education Assistance for College and Higher Education (TEACH) Grants

Maximum Award*: $3,752**

Teacher Education Assistance for College and Higher Education Grants are reserved for students who:

• Plan to pursue a degree in education or a related field
• Agree to work full-time as a teacher in a school that serves low-income students (also called a Title 1 school) for at least four years following their education
• Agree to teach in a high-need field including: math, reading, special education, science, ESL, or a foreign language
• Complete working requirements within eight years of completing their grant-funded program***
• For more information visit studentaid.gov.

Iraq and Afghanistan Service Grants

Maximum Awad*: $5,717

Iraq and Afghanistan Service Grants are reserved for students who:

• Do not meet financial need requirements for a Federal Pell Grant
• Have a parent or guardian who died in combat in Iraq or Afghanistan after Sept. 11, 2001
• Were 24 years of age or younger at the time of their parent’s death
• Were enrolled in either a full-time or part-time program at a college or university at the time of their parent’s death
• For more information visit studentaid.gov. 

* Award maximums based on 2019 data from the U.S. Federal Student Aid Department

** For grants first dispersed on or after Oct. 1 2018 and before Oct. 1 2019

*** If requirements aren’t met, the grant may turn into a loan and require repayment

****FAFSA® is a registered trademark of the U.S. Department of Education.

* Award maximums based on 2019 data from the U.S. Federal Student Aid Department

** For grants first dispersed on or after Oct. 1 2018 and before Oct. 1 2019

*** If requirements aren’t met, the grant may turn into a loan and require repayment

****FAFSA® is a registered trademark of the U.S. Department of Education.

What is a scholarship?

Like grants, scholarships are a type of student funding that do not have to be repaid, which makes them a great option for students who want to reduce or even eliminate their future student debt. Unlike most federal grants, however, scholarships don’t always require students to demonstrate financial need. 

Most scholarships come from private sources like companies, associations, schools and even individuals. Therefore, many scholarships are reserved for students who fall into a certain demographic, have certain life experiences, live in a specific area, or are planning to pursue a degree in a certain field.

Most Common Types of Scholarships

Academic Scholarships

Academic scholarships are considered merit-based, and are usually reserved for students who meet certain GPA or standardized test requirements. That said, you don’t need to have a 4.0 GPA to be eligible for certain academic scholarships. Sometimes, exceptional performance in a certain school subject is all you need to qualify. Most academic scholarships require applicants to submit recent high school or college transcripts to be considered.

Athletic Scholarships

Athletic scholarships are a type of merit-based scholarship. Rather than meeting academic requirements, athletic scholarships are for students who demonstrate exceptional athletic ability within a particular sport. Some larger schools with varsity sports teams offer athletic scholarships to recruit new players, but certain athletic organizations may also offer scholarships for students in club sports.

Program-Specific Scholarships

Program-specific scholarships are reserved for students pursuing a degree in a particular field. Many program-specific scholarships require that students declare a major or enroll in a particular degree track, and may consider other factors like a submitted essay or a student’s GPA. 

Scholarships for Minority Students

Students who identify as a certain sex, gender, race, ethnicity, sexual orientation, age group, or as part of a marginalized demographic may qualify for scholarships reserved for minority students. Many organizations offer scholarships to students who belong to a historically marginalized social or ethnic group, so check out local organizations for opportunities. 

Scholarships vs. Grants: Which is Right For Me?

When to Apply for Grants

Grants are a good option for you if you meet one or more of the following criteria:

• You are a citizen of the U.S. and are eligible for federal financial aid
• You meet certain financial need requirements for federal grants
• You plan to pursue a degree in education or a related field, and you are willing to teach in a Title 1 school following graduation
• You have not yet earned a college degree

When to Apply for Scholarships

Scholarships are a good option for you if you meet one or more of the following criteria:

• You are not eligible for federal financial aid due to citizenship status or other factors
• You do not meet the financial need requirements of federal loans
• You have already received a degree from a 2- or 4-year institution
• You are able and willing to dedicate time to applying to scholarships
• You excel in academics or athletics
• Your grant award(s) does not cover a sufficient amount of your educational costs

Get Help Paying for College

Going to college doesn’t have to feel like a financial impossibility. With the right combination of grants, scholarships and student loans, you can pursue your certificate or associate’s degree in a growing field. Learn more about our financial aid opportunities at San Joaquin Valley College.