Understanding the Differences Between FAFSA, Scholarships, and Grants

A college education can be a pathway to a successful career. However, the costs associated with going to university can deter some students from pursuing an education after high school. If you are struggling with these financial hurdles, there are several avenues you can pursue to help cover tuition, room and board, class materials, and other college expenses.

The OVC Scholarship Network is a dedicated resource for college students looking for funding opportunities. Our robust scholarship directory accommodates students from a variety of backgrounds, offering both need-based and merit-based scholarships. No matter where you are in your college journey, you can benefit from reviewing the various payment options available.

What Distinguishes FAFSA, Grants, and Scholarships?

FAFSA

The Free Application for Federal Student Aid (FAFSA) is a resource that can open the way to financial assistance via your school, state, or the federal government. Even if you are not sure if you qualify for FAFSA benefits, it is often worth the time to apply to make sure you are not missing out on any funding opportunities.

FAFSA assistance can come in different forms, the most common being loans. In general, grants and scholarships from FAFSA do not have to be paid back, but loans must be repaid and will accumulate interest over time. Subsidized loans will not charge interest until the six-month grace period on the loan has lapsed, while unsubsidized loans will accrue interest from the date you receive the funds. Federal loans typically have lower interest rates than private loans, often with more flexible repayment plans.

Grants

Grants and scholarships are often referred to in the same breath, but the key difference between the two is that grants are typically awarded based on financial need. While you can and should apply for both grants and scholarships, you might seek out grant opportunities first if your family does not have the means to pay for college.

In order to qualify for most grants, you must provide proof of your household income or your financial need. Many grants are available at the state and federal level, but keep in mind that if you attend college out of your home state, you may be disqualified from many state grants.

You may already be familiar with the Pell Grant, which provides funding assistance to low-income undergraduate students. To qualify for this grant, you must first fill out a FAFSA form. Similar opportunities can be found on the Federal Student Aid website with different eligibility requirements and award amounts.

Scholarships

Students looking for additional sources of funding for college can benefit from applying to scholarships. Compared to grants, scholarships are often more merit-based; judges may select candidates based on personal achievements, academic performance, or past honors. Many scholarships may also be restricted to certain demographics aside from income bracket, like choice of major or military history, for example.

Supplemental documents like academic transcripts, reference letters, and awards may be relevant in a scholarship application. In addition to the scholarship criteria, you may also need to make a persuasive argument to a judge–usually in the form of a video response or a written essay–about why you deserve the funds.

You should also know that funds awarded through scholarships may affect your eligibility for federal grants. As such, it is important that you report any scholarship awards to your school's financial aid office.

Scholarship Questions? Reach Out to Us Today

The financial stresses of college cannot be understated, but with a savvy approach to looking for funding opportunities, you can alleviate some of the burdens and reduce your debts after graduation.

At the OVC Scholarship Network, we are here to support students throughout their higher education. You can find frequently asked questions about scholarships as well as tips about applying for scholarships on our website.