Why You Don’t Want To Miss Out On College Grants

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A college grant is one of the best ways to pay for your education because it’s free money you don’t need to pay back. Unlike student loans, grants are a gift that you get from the federal government, the state, your college, or a non-profit to put toward your college education. According to the IRS, grants are tax-free income, so you won’t owe money on them during tax season, provided your grant meets all of the requirements.

Unlike scholarships, most grants don’t have academic requirements. The majority of undergraduate grants are given to students from low-income households and are meant to ease the burden of paying for college.

In this blog post, we’ll explain what a grant is, how it works, how you can apply for it, and the kinds of grants available to students.

What Is A Grant For College?

A grant is a type of financial aid tool that does not need to be repaid. It can help cover the costs of tuition, books, and other educational expenses. While there are different types of grants, they are typically awarded to students based on financial need. A grant could also be awarded based on other specific criteria, such as academic achievement, career goals, or community involvement.

What’s The Difference Between A Scholarship And A Grant?

Grants are given to people who can’t afford college or whose families do not earn enough income to pay for tuition and other bills. On the other hand, scholarships tend to be merit-based – meaning they’re based on how well you do in school, sports, or other activities.

Another key difference is the application process. When applying for scholarships, you might find yourself writing long essays and filling out questionnaires. A grant application is more straightforward and requires less time and effort.

What Does It Mean When A College Gives You A Grant?

If your college gives you a grant, it means they’re giving you what’s formally known as gift aid or financial assistance with no strings attached. You can find your grants in the financial aid package/financial aid award letter that you get from your school. However, you may need to apply for some grants individually.

Federal Student Loan Grants

The government awards four types of grants, all requiring you to fill out the FAFSA. However, some have additional requirements depending on the program.

Pell Grants

The Federal Pell Grant is the most well-known federal grant. It’s available to undergraduate students who demonstrate a financial need. To qualify for the Pell Grant, you must complete the Free Application for Federal Student Aid (FAFSA) and meet the eligibility requirements.

Once you complete the FAFSA, you don’t need to do anything else. You’ll get an update on your grant award when your financial aid letter arrives. The amount you’ll get varies each year based on factors such as how much money you’ll need, the cost of attendance at your school, and your enrollment status.

Federal Supplemental Educational Opportunity Grant

Another federal grant is the Federal Supplemental Educational Opportunity Grant (FSEOG). This grant is awarded to undergraduate students with exceptional financial need and can provide up to $4,000 per year.

Not all schools participate in this program. You’ll want to check with your financial aid office to find out if your college offers it. Like the Pell Grant, you’ll need to fill out the FAFSA to apply. Your school will determine if you meet the eligibility requirements and will let you know in your financial aid award letter.

Iraq And Afghanistan Service Grants

This grant is for students whose parents served in Iraq or Afghanistan after 9/11 and died as a result of military service. To claim it, you’ll need to fill out the FAFSA and the U.S. Department of Education will determine whether or not you meet that criteria.

TEACH Grant

The Teacher Education Assistance for College and Higher Education (TEACH) Grant is given to college students who are studying to become educators. It requires you to commit to teaching in either a low-income school or in a high-needs field for four years. You must complete the teaching assignment eight years after graduation or the grant will be converted into a student loan.

State Grants

In addition to federal programs, many state governments offer grants to support in-state students. You should visit the Department of Education website in your state to find out what kinds of grants they offer.

More Ways To Pay For College

If the simple application process of grants appeals to you, consider no-essay scholarships. Of course, you’ll want to apply for as many scholarships as possible, but if writing a scholarship essay holds you back, there are options.

What If Grants And Scholarships Are Not Enough?

You can consider student loans once you’ve tapped out all grants and scholarships. First, you’ll want to look at federal student loans, and if you need additional funding, a private student loan could help. Before taking on a student loan, make sure you understand how they work. Look for a loan with a low interest rate, flexible terms, and a good customer service team who will be there if you need help.

If you need a private student loan¹, you can check your eligibility with Earnest* without hurting your credit.

This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

* Earnest private student loans are funded by FinWise Bank, Member FDIC, or One American Bank, member FDIC

¹ Before applying for private student loans, it’s best to maximize your other sources of financial aid first. It’s recommended to use a 3-step approach to assembling the funds you need: 1) Look for funds you don’t have to pay back, like scholarships, grant, and work-study opportunities. 2) Next, fill out a FAFSA(R) form to apply for federal student loans. Federal Direct subsidized and unsubsidized loans, excluding PLUS Loan for Parents and PLUS Loan for Graduate and Professional Students which require a credit check and a credit worthy endorser if the parent or graduate or professional student has adverse credit, do not require a credit check or cosigner, and offer various protections if your struggling with your payments. 3) Finally, consider a private student loan to cover any difference between your total cost of attendance and the amount not covered in steps 1 and 2. For more information, visit the Department of Education website at https://studentaid.gov/.