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Student Loans

How Grants for College Can Help Reduce Costs

It’s no secret that college is expensive and that most families can’t afford to pay for it out of pocket. Luckily, there are many forms of financial aid that can help reduce the cost of school.

One such way is with grants.

If you receive a grant, you can put that money toward tuition and other expenses and don’t have to pay it back. Grants are more common than you might think. For example, more than 6.8 million students get Pell Grants each year.

In this guide:

How is a grant different than a scholarship?

Most students looking to attend college have heard of scholarships, but many students haven’t thought of using grants to pay for school. They’re very similar in that they’re financial aid you can use to pay for college, and you don’t have to pay them back.

The primary difference between scholarships and grants is how the recipients are chosen and who typically provides the funds.

ProviderTypically, state and federal governmentsTypically, colleges and private organizations
CriteriaTypically need-basedTypically merit-based
RequirementsUsually must fill out the FAFSAUsually must fill out the FAFSA

Are there eligibility requirements for a college grant?

Because grants are typically awarded based on need, many have eligibility requirements students must meet to receive funds. For example, Pell Grants are awarded based on demonstrated financial need.

Other types of grants can have different eligibility requirements. For example, to receive an Iraq and Afghanistan Service Grant, you must have a parent who died as a result of military service performed in Afghanistan or Iraq after 9/11/01.

Types of grants

There are three main types of grants: those funded by the federal government, those funded by the state government, and those offered by colleges and other private organizations.

In general, government-funded grants tend to focus more on financial need to determine eligibility. On the other hand, Grants funded by private organizations are more likely to focus on factors such as the student’s age or living situation.

Federal Pell Grants

Pell grants are among the most commonly awarded grants, with more than 6.8 million students receiving one each year. These grants are need-based, so your family must display a financial need to qualify for one. The government determines your need based on the information you submit on the FAFSA.

The amount you receive will depend on your expected family contribution and the cost of attendance of the school you choose. The maximum amount you can receive is $6,495. You can apply that money directly to tuition or have your school disburse the funds to you for other college-related costs.

Students lose their eligibility for Pell grants after earning a bachelor’s degree or receiving the grant for twelve terms (six years) of school.

Federal Supplemental Educational Opportunity Grant

Federal Supplemental Educational Opportunity Grants (FSEOGs) award an additional $100 to $4,000 to students who display financial need based on the information contained in their FAFSA. Each school’s financial aid office administers FSEOGs.

Not every school participates in the program, and the funds designated for FESOGs are limited. This limitation is unlike Pell grants, where every eligible student receives assistance. Applying for aid as early as possible can improve your odds of receiving this grant.

If you qualify for this grant, your school can credit your student account or disburse the funds to you to use for other college-related costs.

Iraq and Afghanistan Service Grant

The Iraq and Afghanistan Service Grant is a federal grant that doesn’t require financial need. To qualify, you must have a parent who died as a result of military action in Iraq and Afghanistan after 9/11/01, have been under 24 or at least a part-time student when they died, and otherwise not be eligible for a Pell Grant.

The award for this grant is equal to the maximum amount a Pell Grant can award. For the 2021-2022 school year, this amount is $6,495. The award can’t exceed your school’s total cost of attendance, and you must submit the FAFSA to qualify.

If you receive this grant, your school will put the money toward your tuition costs or disburse the funds to you.


A Teacher Education Assistance for College and Higher Education (TEACH) Grant is a different grant than other federal grants. This grant is designed for people who want to become teachers after they graduate from college.

To qualify for the grant, you must submit the FAFSA, attend a school enrolled in the TEACH program, and meet some academic requirements, typically maintaining a 3.25 GPA or scoring well on standardized tests.

If you receive this grant, you agree to complete four years of work as a teacher in a high-need field at a qualifying school (typically one that serves low-income families). If you fail to meet this requirement, you’ll have to repay the money awarded by the grant.

The grant can award up to $4,000 to eligible students each year.

State Grants

Not all grants are awarded by the federal government. State governments fund different grant programs for residents or students that attend school in their state. Like federal grants, many of these grants are need-based, but some grant programs have other eligibility requirements.

Some examples of state grants are:

  • Colorado Department of Higher Education Grant: Need-based financial assistance for undergraduate and graduate students.
  • Kansas Board of Regents Grants: Need-based and program-based grants, such as grants for nursing students or teachers.
  • Texas Grant: Need-based grants for students in Texas.
  • Michigan Tuition Grant: Need-based grants for students in Michigan.

Private Grants

On top of government-sponsored grant programs, there are many schools and private organizations that offer grants. These tend to be based on a combination of financial need and the student’s situation, rather than solely need-based.

Some examples include:

  • Pacific Lutheran University Alumni Dependent Grant: Awards up to $1,000 to students whose parents attended Pacific Lutheran University.
  • Purdue University Span Plan: Awards money to adult students (23 or older) who want to begin or complete their college education.
  • Future Farmers of America Grant: Awards money to students studying agriculture and related fields.
  • Margaret McNamara Memorial Fund: Awards up to $12,000 to female students from developing countries who study in the US and plan to return to their home country.

How to apply for grants for college

The good news about college grants is that applying for them is usually pretty easy.

The first thing that you have to do to apply for a grant is fill out the FAFSA. In some cases, such as the Pell Grant, that’s all that you have to do. Based on the college you’re attending and the financial information in your FAFSA, you’ll receive a grant if you’re eligible.

If you want to apply for a specific grant, like a TEACH grant or a grant from a private organization, you’ll have to follow a different process. Once you submit your FAFSA, there may be additional steps to complete.

One of the best things to do is check with your financial aid office for information on how to apply. You might have to submit additional forms or other information. If you’re unsure what to do, check with the organization funding the grant to find out more about the application process.

How to use your grant if you receive one?

Most grants send the awarded money directly to your school, where the financial aid office will apply the amount received to your student account. This can directly offset the cost of tuition, so you don’t have to pay as much when the bill comes due.

If you want to use the funds you receive from grants for other purposes, you can ask that the financial aid office disburse the money to you. You can then use the money to pay for other things, such as textbooks, supplies, and other college-related costs.

Tips for maintaining eligibility

Most grants have specific eligibility requirements. Those requirements can be based on your family’s financial situation, your course of study, or other factors. If you don’t want your out-of-pocket education costs to increase, it’s important to make sure you remain eligible for your grants.

Some things may be out of your control. For example, if your family’s income increases, it can impact your eligibility for some need-based grants. Things that are in your control are things like the subjects you’re studying or where you live. Make a list of the grants you’ve received and the eligibility requirements for each. This can make it easier to keep track of all of the requirements you have to meet to maintain your grant eligibility.

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