What is the difference between Scholarships and Grants?

People often wonder the difference between grants and scholarships. There is a thin line of difference between them. To know about the differences read out the blog.

Updated by Arpit Sachdeva on 2nd February 2019

Scholarship and Grants-What's the Difference 

If you are applying to the college for the first time, then there must be a ton of question rolling in your mind. 


Don’t Overstress! 

We are here to help. 

One question among that must be related to Financial Aid. Any type of Financial relief that can be received for the education is appreciated by the students and usually remains the top priority on everyone’s list before enrolling. 

So, this blog will try to inform you about grants and scholarships, and how they're different. 

Read through and I promise you, by the time you’re done reading the blog, you’ll be much more confident about your financial aid plans. 

Obama successful memeSource-me.me 

Felt good!! So, if Obama has trust in you, that must give you a boost. Let’s start with the reason you are on this page. 

Grants and scholarships are the gift aids provided to eligible entities. Money which doesn’t need to be earned or repaid is termed as gift aid, unlike student employment and student loans. 

What is a Scholarship? 

Scholarships are given by government entities, schools, and private organizations.  

This is primarily awarded to students based on the merit, financial needs or any other requirement that they fit into.  

Scholarships are one of the best ways to ease off your college fees pressure. The thing about scholarship is you don’t have to repay it. So, it provides the desired financial relief.  

Some of the examples of the type of scholarships are- 

  • FAFSA Scholarship 

  • Scholarship for Military 

  • Scholarship for University Students 

  • Scholarships for High School Seniors 

  • Scholarships for Hispanic

    Scholarship clip artSource-clipartpanda.com 

What is a Grant? 

Grants are very similar to scholarships. Grants also don’t require any kind of repayment, and they are basically awarded due to the financial needs of a student. 

Federal and State Governments are the agents that provide the grants usually. Along with this, many colleges and universities also came forward to provide help in the form of grants. 

Criteria for grants is basically need-based, meaning that the student has to provide financial information of their parents or guardians in order to be eligible for the grant. 

Some examples of the type of Grants are- 

  • Federal Pell grant 

  • Online College Grants 

  • Grants for Women 

  • Grants for Single mothers 

  • Federal work-study

    college grants clip artSource-canstockphoto.com 

Difference between Scholarships and Grants 

These are the criteria upon which the differentiation is based- 

  • Funding Source 

  • Recipients 

  • Merit 

  • Types 

Funding Source 

They are a lot of sources when it comes to Scholarships. Whether it can be individuals, community organizations, college or universities, government authorities etc. The diversity of sources for scholarships is large. 

When coming to Grants, the funding usually comes from state or federal financial aid that is given to the college or university itself. 


Grants can be conferred to any person or entity fulfilling specific criteria. It can be awarded to Non-profit organizations, Veterans, Colleges and Universities etc. 

However, Scholarships can be conferred only to students.   


Scholarships are generally been given by the academic or extra-curricular merits. 

Grants usually take into account the financial need of the individual before granting the financial aid. 

Types of Grants and Scholarships

Grants are usually not categorized. 

In the case of Scholarships, it can be merit-based, need-based, career-specific and student-specific. 

  • Merit-based- This is mostly based on the student’s academic and extra-curricular activities. 

  • Need-based- It is based on the family financial record. 

  • Career- Specific- These are awarded by college or universities to the students enrolled in a specific career. 

  • Student- Specific- They are granted to applicants who must initially qualify by race, gender, religion, family and medical history, or many other student-specific factors.

    difference photoSource-dentistrydifference.com 

Eligibility Criteria to apply for Scholarship and Grants 

Eligibility criteria for both Scholarship and grants are almost similar and can be summarised as- 

  • A candidate should be a citizen of the United States. 

  • You need to be enrolled in an undergraduate or postgraduate degree. 

  • You need to be 18 years and above. 

  • Higher education should have been finished by that time. 

  • Students need to have a minimum CGPA of 3.0 or above  

How to apply for scholarships and grants? 

Procedure to apply for scholarship and grants can be given as- 

Step 1: Understand your eligibility and requirements. 

Step 2: Download the application form the website. Either the application is from FAFSA, state government or any private or non-private organizations. 

Step 3: The form should be filled and submitted prior to the deadlines. 

Step 4: Now all you have to do is, wait for the response to see if you are approved for the help or not. 


Scholarships and Grants are like a life-saver for a large diversity of students. Over here, a lot of students come over with a lot of dreams, and these financial aid policies help them to achieve those. There is a thin line of difference between both of them. And the best part is scholarships and grants need not be paid back. 


  What is the major difference between grants and scholarships?

Grants and scholarships are often called “gift aid” because they are free money—financial aid that doesn't have to be repaid. 

Grants are often need-based, while scholarships are usually merit-based.

  What is a Pell Grant?

A Pell Grant is a subsidy the U.S. federal government provides for students who need it to pay for college.

Federal Pell Grants are limited to students with financial need, who have not earned their first bachelor's degree, or who are enrolled in certain post-baccalaureate programs, through participating institutions.

  How can you qualify for a grant?

To qualify for a grant you must have applied for FAFSA, should not have earned a bachelors and professional degree and their family income should fall under a certain bracket. As grants are given for those who need financial support.

  Do you have to pay back a grant if you drop out?

Grants don't have to be repaid but if you drop out of your course without completing it then you have to repay a portion of your Pell Grant.

  Are grants or scholarships taxable?

If you have taken grants or scholarship for the pursuit of a degree then it is not taxable. But, if it is for the general living expense to a non-degree student. then it is taxable.

  What is FAFSA?

The Free Application for Federal Student Aid is a form that can be prepared annually by current and prospective college students in the United States to determine their eligibility for student financial aid.