There’s no doubt that scholarships and grants are the best way to pay for a college education. You often hear the two lumped together when reading or talking about financial aid—but how exactly are they different? How are they alike?

How Scholarships And Grants Are Similar

Scholarships and grants are both free money that are offered to students to help pay their college tuition. One of the most attractive features of scholarships and grants, and the reason why they are so coveted, is that you do not have to return the money. This means there are no interest rates or payments to deal with and you graduate with less debt.

How Scholarships And Grants Are Different

Scholarships are usually offered to students on merit. Corporations, individuals, small business or non-profit organizations offer scholarships to students who meet their specific qualifying criteria. Organizations may offer scholarships based on a wide range of criteria, from athletic ability to musical talent, creativity and much, much more. In some cases, students have to write an essay on the topic provided in order to qualify for a scholarship.

Grants are also offered as a way to help students cover their tuition fees but these are offered by the government to low-income undergraduate students. Grants are strictly need-based. Students have to demonstrate financial need in order to pursue grants. The Pell Grant and the Federal Supplemental Educational Opportunity Grant are just two of the tools through which the government disburses grants to students who quality. Eligibility for scholarships is determined by the information provided on the FAFSA.

Use College Raptor’s new Student Loan Finder to discover personalized loan options. Compare lenders and interest rates to find the ideal student loan for you!