The Difference Between Grants and Scholarships

College costs a lot of money. In turn, students try to find as much financial aid as possible. In your search for financial aid, you’ve likely come across the phrase “grants and scholarships”. The money from grants and scholarships doesn’t have to be paid back, but you’re also wondering what the difference between the two is.

A student holding a phone looking to the right.

What are grants?

The state or federal government usually fund grants. The most common one is the Pell Grant. They are awarded to students based on need, and there is a finite amount of money available. This entails a first-come, first-serve basis until the funds run out. In other words, the government gives a limited amount of grant money to students who apply for them first. You open yourself up to grants through filing the FAFSA.

What are scholarships?

Any number of sources fund scholarships: y our school, your community, organizations, etc. Scholarships are literally from every imaginable place, and there is a scholarship for everything you can imagine. From athletic scholarships to making a prom dress out of duct tape for a scholarship, there’s one out there for you. You don’t have to be a senior in high school to apply either. Plenty of scholarships open themselves to high school sophomores and juniors.

While many of them are need-based, there are other requirements that you will have to meet. These requirements can include (but are not limited to) going into a specific field, belonging to a certain racial or ethnic background, completing an essay, or maintaining a certain GPA. Some scholarships are merit-based, either based on your high school grades, athletic ability, or a demonstrated skill. The application process is a little more demanding; many scholarships only award money to a few people, and there can be hundreds of students applying to them.

Additionally, many students focus on big scholarships, but don’t forget about the smaller or local ones. Smaller or local scholarships have less competition usually, which means you have a better chance of winning. Of course, you aren’t getting as much money compared to a large scholarship, but any money is good when it comes to funding your education.

Other differences between grants and scholarships

Another key difference is that grants always need you to complete the FAFSA to show need. With scholarships, it depends. If the scholarship asks for demonstrated need as a requirement, then you need to file the FAFSA. Many scholarships do not require it (although filling it out never hurts!). However, if you want merit-based scholarships from your college, definitely file the FAFSA. File the FAFSA even if you, for some reason, don’t want those scholarships. There’s no downside, and you open yourself up to grants and federal student loans.

Lastly, scholarship organizations limit scholarships to the undergraduate level. Once you start looking into graduate school, they become “fellowships”. Grants, on the other hand, are found in all levels of college education.

Use College Raptor to discover personalized college matches, cost estimates, acceptance odds, and potential financial aid for schools around the US—for FREE!


Lender Rates (APR) Eligibility
Citizens logo.
6.36%-14.25%* Variable
4.48%-13.29%* Fixed
Undergraduate and Graduate
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
Credibe company logo.
4.98% - 16.70% Variable
4.09% - 15.71% Fixed
Undergraduate and Graduate
Lendkey company logo.
5.84% - 11.11% Variable
4.39% - 11.11% Fixed
Undergraduate and Graduate
Ascent company logo.
6.16% - 16.09% Variable
4.09% - 15.71% Fixed
Undergraduate and Graduate
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
Earnest company logo.
5.62% - 16.20% Variable
4.11% - 15.90% Fixed
Undergraduate and Graduate
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.