Scholarship vs grant.

In plain English

A scholarship and a grant are both gift aid, meaning money for school you do not pay back. The usual difference is how you qualify. Scholarships tend to be awarded for merit, such as grades, athletic skill, a talent, an essay, or membership in a group, and they come from schools, companies, nonprofits, and private donors. Grants tend to be awarded for financial need and most often come from the federal government or your state, with the Pell Grant being the largest federal example. Both can reduce or wipe out what you owe, and both can sometimes be lost if you fail to keep up grades or stay enrolled.

01Why it matters

Gift aid is the cheapest money for college because there is nothing to repay and no interest, so a dollar of scholarship or grant beats a dollar of loan every time. Knowing which is which tells you where to look: grants come mostly from filing the FAFSA, while scholarships often require separate applications you have to hunt down.

02The math, step by step

You file the FAFSA and qualify for a federal Pell Grant (the maximum is $7,395 for the 2025-26 and 2026-27 award years) because of your family's income. Separately, your town's Rotary Club gives you a $1,000 scholarship for writing the winning essay. Neither has to be repaid. The grant came automatically from your need; the scholarship came from an application you chose to enter.

03What this is NOT

04Receipts

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