Are you looking for a grant or a scholarship? Or both perhaps? Many people confuse the concepts of grants and scholarships, and that's ok; sometimes the terms are used interchangeably. Generally speaking, grants go to institutions, and scholarships go to individuals, but there is a lot more nuance than that. Trust us.

In this guide, we will take you through everything you need to know about grants vs. scholarships, how they are different, why they are different, and how you can take advantage of one, the other, or both.

Grants vs scholarships at a glance

Both grants and scholarships help make education more affordable, but they differ in how they do so. Grants are typically provided to institutions such as schools, school districts, college/university campuses, non-profit organizations, or government programs, to fund services, supports, or access opportunities that assist student populations. Scholarships, on the other hand, are primarily for individual students to provide support for tuition or participation in educational programs. Both types of financial assistance help students achieve their educational goals, but they reach students through two separate pathways with different eligibility criteria.

Data snapshot: where grant funding flows in the system

To further clarify the concepts of grants and scholarships, it's helpful to take a broader view. The chart below uses national data from the College Board's Trends in College Pricing and Student Aid Report (Academic Year 2024-25) to illustrate how total grant aid for U.S. post-secondary students is distributed.

Total grant aid available for undergraduate and graduate students for the academic year 2024-25 was approximately $173.7 billion. In the same timeframe, roughly 50% of total grant aid came from institutional grants, and slightly less than one-third from Federal Grant Programs. Total grant aid by source was as follows: Federal Grants were 31% of total grant aid, Institutional Grants were 49%, State Grants were 10%, and Private/Employer Grants were also 10%.

How grants and scholarships show up differently in real life

Scholarships and grants are two types of funding that affect education, but they serve different purposes. A grant will help support the educational institution's financial stability and provide access to those who may not be able to afford it.

Below is a list of some of the more popular grant and scholarship categories.

PROS

• Federal grants: Often the largest source of need-based aid and built into standard financial aid systems.
• State grants: Can significantly lower in-state tuition and support local workforce pathways.
• Institutional grants: May dramatically reduce a college’s sticker price, making higher-cost schools more realistic.
• School-based scholarships: Sometimes automatic with admission or require only a short additional form.
• Community scholarships: Often have smaller applicant pools than national awards, increasing accessibility.
• Employer and mission scholarships: Can align with career goals and provide additional mentorship or networking support.

CONS

• Federal grants: Require FAFSA completion and careful attention to deadlines and eligibility rules.
• State grants: Criteria and timelines vary widely; missing a state-specific step can reduce eligibility.
• Institutional grants: Often hidden inside complex financial aid letters and may depend on enrollment status.
• School-based scholarships: May include ongoing GPA or major requirements to maintain eligibility.
• Community scholarships: Multiple small deadlines and paperwork can feel time-intensive.
• Employer and mission scholarships: May require essays, references, service commitments, or field-specific participation.

Federal grants and scholarships: how they work in practice

Federal programs can work at both levels: some funds go directly to students through need-based grants, while other federal funding supports institutions and workforce pipelines that ultimately create opportunities for students.

Grant: Pell grants

Pell Grants are among the best-known forms of federal grant aid for education. They are designed for undergraduate students who demonstrate financial need and are enrolled in college or certain career-training programs.

Grant: Federal supplemental educational opportunity grants (FSEOG)

FSEOG grants are additional funds for students with exceptional financial need. Not all schools participate, and funds are limited, so applying early matters.

Scholarship: national and foundation scholarships

Scholarships can be awarded nationally through funding from private and/or professional foundations and organizations; sometimes they have specific requirements or missions, such as supporting first-generation college students or students pursuing a health care-related major/career.

They are often open to all students and will usually ask for some personal information or evidence, such as a reference, essay, or proof of completion of an internship/program, etc. The positive side is that most national scholarships look for a "story of purpose" and "persistence," not perfection.

State grants and scholarships

States use grant funding to keep residents enrolled in local colleges, universities, and training programs, and they also partner with foundations and agencies that offer student-facing scholarships. The rules vary by state, which is why guidance matters here.

Need-based state grants

Many states have developed grants to assist financially needy students, just as the federal government does with Pell Grants; the eligibility requirements differ by state. These grants may be used to pay for in-state tuition at public colleges, students' tuition at public colleges, career and technical education programs, and other expenses. Since each state has its own rules regarding these types of grants, it's important to consult your school counselor.

Merit-plus-need grants

Some state grants consider both the student's financial needs and their academic performance/progress. When we talk about "merit," we don't always have to think of a high grade average.  It could be that the student improved themselves throughout the year or that they were committed to pursuing a particular career path. When we frame a teen's ability to make changes in their life, such as improving their GPA, completing coursework on time, making better choices, etc., in terms of "growth," we help them see that making progress in their lives is much like viewing a ringed trunk of a tree - it is the progress made over time that is most important, not the one snapshot picture.

Scholarship: state-sponsored and state-partner scholarships

You may find that some states create their own scholarship programs, while other states contract with a state-affiliated foundation or a workforce agency to administer them. Scholarships created by these sources are referred to as "student-facing." Student-facing scholarships provide assistance with an individual student's college expenses and often have stipulations such as attending school within the state to stay eligible, entering a high-need area of study to receive funding, or completing enrollment requirements to qualify for the award.

Institutional and community grants vs scholarships

Colleges and local communities often offer both grants and scholarships, and the labels can blur. What matters most is how the funding works. Grants usually support institutional priorities or reduce costs broadly. Scholarships are awarded to individual students based on defined criteria.

Grant: institutional and community access grants

Institutional grants are funds colleges use to lower tuition, increase enrollment, or support student persistence. Community grants often fund youth programs, mentoring initiatives, and local access efforts. In both cases, the funding strengthens systems that serve many students at once. These grants may not always be visible. They often appear as “institutional aid” in financial aid letters or show up as program supports through schools and nonprofits.

Scholarship: school-based and local scholarships

School-based and community scholarships are awarded directly to students. They may be tied to academic progress, leadership, intended major, identity, or community involvement. Some are automatic with admission. Others require a short application.

Local scholarships can be especially valuable because applicant pools are often smaller than national competitions.

Specialized grants and scholarships

Grant funding is usually used for large-scale projects that benefit multiple individuals at once; for example, grants fund and establish systems that support a student's entry into a workforce pathway or a school's ability to provide support during a short-term crisis. A scholarship, on the other hand, is usually a one-time award for an individual student who needs additional support.

Workforce and training grants

Grants supporting workforce development typically support trades, technical certification, apprenticeships, and career pipelines. Funding may be provided to training providers, employers, or workforce boards in order to provide greater access to training programs, provide better equipment, etc. Students may experience lower costs associated with their training programs, have better equipment, and/or stronger connections to potential employers as a result of funding from grant sources

Career-path scholarships

Scholarships focused on career paths are awarded to students pursuing education in a specific field. Employers and professional associations fund this type of scholarship to create a talent pipeline in their industry. In addition to providing financial assistance, many of these scholarships offer opportunities for students to participate in mentorship and/or networking activities.

Emergency and stabilization grants

Emergency grants provide funding to schools and other community-based organizations to assist students who have experienced an unforeseen disruption. Emergency grants can help bridge a short-term gap for students facing housing, food, transportation, or technology-related issues. Emergency grants were created to help students maintain stability, not to assess their merits.

Emergency micro-awards scholarships

Some colleges and foundations are offering emergency scholarships that award students small amounts of money to remain in school when an unexpected expense could force them to leave.

Grants and scholarships are different, but they serve a similar purpose

Grants and scholarships both assist students in getting an education, but they are awarded in differnet ways, and to differnet entities. Grants are generally awarded based on financial need and are often funded by governments, schools, or community programs to help students who would not be able to afford tuition without them. Scholarships generally award students based on merit, achievements, background, or specific talents (examples include: academics, athletics, leadership, community involvement). Both play a vital role in reducing the cost of college, and understanding how they differ will allow students/families to explore more funding options. Platforms like Thrivenest help students build the financial confidence and decision-making skills needed to identify these opportunities and take the next step in planning for education.

FAQ

Are grants only for students with very low incomes?

Not all grants are limited to the lowest income levels. Many grants are tied to program goals, location, enrollment status, or workforce priorities. Some grants focus on access and stability rather than income alone, especially when they’re routed through schools, districts, or community organizations.

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