College grants and scholarships provide financial aid to students to help pay tuition costs, room and board and other necessary school-related expenses. The two terms are often used interchangeably but have some unique guidelines and eligibility requirements. College grants and scholarships are different from loans because they don't accrue interest and don't need to be paid back.


College applicants and enrolled students are eligible to receive scholarships and grants. Some high school students receive scholarships before they apply to universities, but grants are usually offered to first-year applicants and those who are currently enrolled. According to the University of Nevada, Las Vegas, U.S. citizens may receive both scholarships and grants, but international students are only eligible to receive scholarships.

Undergraduate Education

Scholarships generally provide financial assistance for undergraduate students; fellowships are awarded to graduate students and those pursuing post-baccalaureate research projects and advanced academic studies. According to Michigan State University, grants are more inclusive and may be awarded to both undergraduate and graduate students. All scholarships and fellowships are grants, but not all grants are scholarships. Students are not required to repay scholarships, fellowships or grants before or after graduation.

Academic Merit

The Massachusetts Institute of Technology reports that most financial scholarships are awarded based on academic merit, although there are exceptions. For example, MIT refers to need-based financial aid as scholarship funds. Since the words "scholarship" and "grant" can be used interchangeably, universities, organizations and companies can choose whether to call financial aid a grant or a scholarship. Federally funded aid is almost always referred to as a grant and requires students to submit the Free Application for Federal Student Aid, or FAFSA, to determine eligibility.

Funding Source

Scholarships come from a variety of sources, including private businesses, religious and secular organizations, individuals, alumni and specific departments within a college or university. Grants are typically associated with federal or state financial aid or assistance awarded by institutions of higher education. For example, a student may receive a scholarship from the Swanson School of Engineering, but be awarded a grant from the University of Pittsburgh or the U.S. Department of Education. According to, the most popular federal grant is the Pell Grant.

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