Grants and scholarships share a common trait - both are "gift aid". This is money that does not need to be repaid.
Grants are typically awarded on the bases of financial need, such as the federal Pell Grant for low-income students. Need-based grants are awarded at the federal, state or college level.
Grants are one of the most desirable forms of financial aid used to pay for college. Experts say generally the greater a student's financial need, the more grant aid he or she is likely to receive, but there are some things students can do to maximize the amount of money they are awarded.
Unlike student loans, which must be repaid, or work-study programs, which often require to work on campus to earn money, grants are a form of financial aid that does not require repayment.
Grants are typically awarded by the federal government, states or colleges, and the amount of aid a student can expect varies widely depending on a number of factors, including the student's need and the type of institution. Private colleges typically offer more grant funding than public institutions, says James Kaster, director of financial aid at Washington and Lee University in Virginia.
"A lower-income student going to a private school should expect the university to be more expensive, but at the same time, most private schools can also offer more. Lower-income students will sometimes be deterred by the sticker price and they won't even apply to a college, when a lower-income student really could apply to those colleges and get a &70,000 grant to cover the cost", Kaster says.
To be eligible for most grants, students must submit the Free Application for Federal Student Aid. The financial need demonstrated through the FAFSA will help determine a student's eligibility for grant funding.
The FAFSA is available on Oct. 1 each year and the federal deadline is June 30. Experts say the sooner a student submits the FAFSA, the more opportunities for aid he or she will have. States have varying deadlines for FAFSA submission, often earlier than the federal deadline, so students should keep track of these to maximize grant opportunities.
Scholarships, however, are usually awarded on the basis of merit, athletic ability or a specific talent. Students should start their search with local scholarships, since these awards are often less competitive, experts say. But it's still important to sign up with a few national scholarship database websites.
Different types of national scholarships are listed on database search websites, including Fastweb.com, Cappex.com and Unigo.com. While many high school students apply for college scholarships during their senior year, experts say they can begin their search and the application process much earlier.
New scholarship databases allow for students to begin researching and finding scholarships as early as freshman year by completing a student profile that should be updated each year with new information. To cut down on junk mail from the databases, setting up a dedicated scholarship account is recommended.
There are many types of scholarships available. Some of these include: