When cultivating the next generation, education is paramount, but as education is a semi-public service, it needs to be funded. And this is where grants become so important. Without grant funding, many of the programs that students and individuals rely on probably wouldn't exist. So, how does grant funding work, and how to get grant funding? We break it all down below.

What are grants?

Grants are the money that institutions put away for the benefit of local communities. Organizations like government agencies, school districts, colleges/universities, non-profits, etc., utilize grants in order to fund certain initiatives. These can include things like counseling services, financial education programs, paying for dual enrollment costs, and providing basic needs assistance for students who come from underserved communities. When schools or programs receive grants, it doens't mean they are failing; it just means that they know how to obtain government resources for their programs.

How grants differ from loans and scholarships

Sometimes, grants can get confused with other types of transactions, mainly loans and scholarships. Below are the differences.

Grants tend to focus more on need, access, or impact rather than grades or competition. Loans are loans, most people are going to be familiar with them, and scholarships go to individuals, not institutions.

Data snapshot: where grant funding actually goes

Before zooming in on specific types of grants, it helps institutions see the big picture. The chart below uses national data for the 2024–25 academic year from the College Board’s Trends in College Pricing and Student Aid report. It shows how total grant aid for U.S. postsecondary students is distributed by source: federal, state, institutional, and private/employer programs.

In 2024–25, total grant aid for undergraduate and graduate students was about $173.7 billion, with nearly half coming from institutional grants and just under a third from federal programs. Federal grants made up 31% of total grant aid, institutional grants 49%, state grants 10%, and private/employer grants 10%. This mix shows that support comes from several layers of the system, not just one annual school budget.

The main types of grants that students and institutions encounter

Grants come in all shapes and sizes. In practice, grants fall into categories based on who offers them and what they’re designed to support. For schools, districts, and community programs, each category represents a different way to bring resources into your building on behalf of students. Below are some of the main types of grants

Federal grants

Federal Grants are funded by the federal government; they are also the largest and most commonly utilized resource to fund educational needs. For schools and colleges, federal grants provide much-needed funding to support students attending college who are from lower to middle-income families.

Pell Grants

Pell Grants are one of the most famous types of education-related grants, and are geared towards students in financial need.   For institutions, Pell eligibility often determines how far you can stretch institutional aid and how many students you can realistically serve.

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 and maintaining clear internal processes matters.

State grants

State grants are made possible through funding from all fifty states. The funds are used to encourage students to continue their college experience at local community colleges, universities, or vocational/training programs. Districts and public educational institutions rely heavily on state grants to act as a bridge between their local budget and federal funds.

Need-based state grants

Many states have developed grants that resemble the Pell Grant program, but each state has different requirements for eligibility. Examples of what these grants may fund include in-state tuition, students who attend public colleges/universities, and students pursuing a career/technical education program. School administrators should provide students and parents with specific information regarding how state grants differ from one another. To do this, some school administrators may want to start sponsoring informational opportunities to know more, such as FAFSA nights, bilingual information sessions, and senior seminars.

Merit-plus-need grants

Some state grants consider both financial need and academic progress. Importantly, “merit” doesn’t always mean top grades; it can include persistence, improvement, or commitment to a field. This framing helps teams talk about growth with students in a way that emphasizes progress over a single snapshot.

Institutional grants (college and school-based)

Colleges and universities often offer their own grants to help students enroll and stay enrolled. For K-12, institutional grants will also support dual-enrollment programs, bridge courses, and targeted support for students. Below are some examples

Tuition assistance grants

Tuition assistance grants (TAGs) reduce the cost of tuition and are not visible unless reviewed carefully on a family's financial aid award letter. Institutional leadership can assist in providing a translation of the award letter so that it makes sense to students who have never had access to higher education (first-generation).

Retention and completion grants

Some institutions offer small grants to help students stay enrolled when unexpected costs arise, like a car repair or textbook expense. These grants recognize that life doesn’t pause just because someone is in school and can be the difference between a student stopping out or persisting.

Community and nonprofit grants

The most flexible type of grant available to community-based projects is a community-based project grant. These types of grants are usually sponsored by local non-profit agencies, foundations and advocacy groups. A community based project grant could provide funding to an elementary school, middle school or high school program that is not part of the traditional school funding model (e.g., weekend workshops, mentoring programs, family financial literacy etc.).

Youth development grants

A Youth Development Grant is used to fund various youth development programs, including after-school programs, leadership development, and summer learning programs. The focus of these grants is on investing in potential rather than in perfection, which will enable institutions to be more supportive of trauma-aware, growth-based practices.

Identity- and experience-based grants

There are some grants available that are specifically designed for students who identify themselves by their identity/experience (i.e., first-generation college student, former foster child, student from a under-represented community). Schools should recognize and make known to families which students would be eligible for these grants early in the year.

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How should schools approach grants

Grant applications can bring up doubt for institutions, too, especially when teams are already stretched thin. A trauma-aware, student-centered approach focuses on pacing, shared ownership, and reframing “no” as part of the process, not a verdict on your school or community.

Together, these three habits can turn grant applications from something intimidating into a repeatable process that feels more manageable, collaborative, and aligned with your mission.

Understand grants, understand funding

Funding for grants the silent foundation for programs that help shape a student's future. Examples of this include everything from Pell grants doled out by the federal government to certain state grants and non-profit grants.  All of these are critical for keeping counseling services available to students, dual enrollment programs open to students, and emergency needs met for students who may not have the resources to pay for those needs on their own without going further into debt. When schools consider grants as a long-term investment instead of just something to help in a tight moment, this provides stability for students and creates a system that responds to real needs.

Thrivnest fills that gap by working with schools and community-based organizations to develop student resilience, financial literacy, and decision-making skills necessary to take advantage of grant-funded programs that have lasting effects.

FAQ

Are grants only available for students that are low-income?

Not all grants have to be based on income levels. Grants can also take into account family size, location, institutional priorities, and educational goals. Administrators/parents can help by not ruling out a student too early and by checking the eligibility criteria before assuming they won't qualify.

Will grants reduce or eliminate future financial aid opportunities?

In most cases, grants will reduce the amount of money that is needed to borrow from other sources (such as loans) and do not need to be repaid. In general, receiving a grant does not mean that a student will no longer be eligible for aid in the future; instead, each year's aid application process will consider new information. Schools should let families know that grants are designed to support long-term planning, not punish it.

Is applying for multiple grants a bad idea?

It is common for students to apply for more than one grant, and it may even be encouraged at the institutional level. Each application represents an opportunity for funding, and many grants don't interfere with one another. The key is to plan when applications will be submitted and develop systems internally so that the process appears manageable for staff members and transparent to families.

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