What Is a Grant for College?

Grants are among the best sources of financial aid for college. Unlike loans, which recipients must repay, grants offer free money for college that does not need to be paid back — as long as students meet the grant’s criteria.

In 2018, U.S. undergraduates received nearly $110 billion in grant aid from five sources: colleges and universities, the Pell Grant program, private and employer grants, state grants, and veteran and military grants. Colleges and universities are the largest providers of grants, awarding about 44% of all grant aid.

Undergraduate and graduate students can use grants to pay for their education. Understanding the grant system and how to get grants for school can help students graduate without hefty student loan payments.

Grants help college students cover their tuition and education costs. Government agencies, colleges, and private foundations award grants to both undergraduate and graduate students.

Award amounts, eligibility requirements, and application processes vary depending on the grant. For example, students can qualify for federal grants by filling out the FAFSA. Many colleges determine institutional grants based on the FAFSA, institutional financial aid forms, the CSS Profile, and/or student applications. States may use their own versions of the FAFSA to determine grant eligibility.

While many grants require financial need, students may also qualify for merit-based grants. For example, many military and veteran grants do not require proof of financial need.

Millions of college students rely on grants to help pay for their educational expenses. The U.S. Department of Education distributes four types of federal grants. Additionally, many state governments award grants to residents, including merit-based and need-based grants.

Colleges attract students by offering grants, and they distribute federal and state grant money through their financial aid offices. Some students also use private and employer grants to help pay for school.

During the 2021 fiscal year, the Department of Education plans to distribute over $29.5 billion in Pell Grants and estimates that 7.1 million students will receive funding under the program.

For the 2021-22 academic year, the Pell Grant program will award up to $6,495 for students who meet financial need requirements. The exact award amounts may change slightly each year, and applicants can qualify by filling out the FAFSA annually.

Only eligible undergraduates qualify for the Pell Grant, and students can receive Pell Grant funding for up to 12 terms, or six years. Aid through the Pell Grant is managed and disbursed through a school’s financial aid office.

Undergraduates with exceptional financial need can also receive a Federal Supplemental Educational Opportunity Grant, which provides up to $4,000 per year on top of Pell Grants.

Some grants offer specialized financial aid for certain professions. The Teacher Education Assistance for College and Higher Education (TEACH) Grant provides up to $4,000 per year for students earning a teaching degree.

This program differs from other grants in several key ways. Unlike Pell Grants, graduate students can qualify for TEACH Grants. The program also only funds students in approved educator preparation programs.

TEACH Grants carry work requirements as well. Recipients must agree to work at a low-income school in a high-need field after earning their degree. If recipients do not complete four years of teaching within eight years of graduation, they must repay the grant as an unsubsidized federal loan.

In addition to federal grants like the Pell and TEACH Grants, states award grants to college students.

In California, for example, residents can apply for Cal Grants. The program supports college students attending public colleges or qualifying independent schools in California. Like Pell Grants, only undergraduates qualify for Cal Grants. Recipients can use the award to pay for an associate degree, a bachelor’s degree, vocational training, or career training.

Ohio, meanwhile, offers the College Opportunity Grant for undergraduates who meet income eligibility requirements. Recipients must attend an Ohio or Pennsylvania college or university.

Many other states offer specialized grants. The Massachusetts Public Service Grant covers tuition for the children and spouses of public servants killed in the line of duty.

State grant programs set their own requirements. Most include residency requirements in the state and proof of financial need. In most states, residents must submit the FAFSA to qualify for state grants.

Undergraduates can research grant programs in their area by contacting their state’s education department. Keep in mind that students typically must attend a college in their home state to qualify.

Many colleges offer financial aid packages to attract and retain students. According to the Urban Institute, around 40% of undergraduate grant aid comes from colleges themselves.

Institutional grants vary widely depending on the school. At public community colleges, around 16% of students received institutional grants in 2015-16. Private four-year colleges offered grants to 81% of students during the same period. Public four-year colleges awarded an average of $5,700 per student in grant aid, while private colleges handed out $19,100 per student.

Each school runs its own grant program through its financial aid office. As a result, the application process, requirements, and award amounts can vary significantly depending on the school.

Unlike scholarships, grants don’t require separate applications. With institutional grants, students simply submit an application to attend the college. Schools then review applications and send out financial aid offer letters to attract top students.

The information submitted through the FAFSA determines whether a student qualifies for federal grants. Millions of students fill out the FAFSA every year.

States and colleges also use the FAFSA to determine grant aid. By completing one application each year, undergrads can qualify for thousands of dollars in grants for college. As such, college students should always fill out the FAFSA. In 2018, high school seniors missed out on an estimated $2.6 billion in grants simply by not filling out the FAFSA.

Editor’s Note: This article contains general information and is not intended to be a substitute for professional advice. Please consult a professional advisor before making decisions about financial issues.

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