The Role of Scholarships and Grants in Financing Education

Applying for scholarships and grants helps students pay for college. In some situations, these awards allow people to obtain a degree they wouldn’t be able to otherwise. Students who apply for various awards often find they help cover the costs of other college-related expenses.

Here’s a closer look at today’s college tuition, the importance of applying for scholarships and grants and how to get your hands on free money for school.

The Rising Costs of Higher Education

According to 2023 data by the Education Data Initiative, public four-year in-state college tuition is $26,027 annually — $104,108 total for four years of attendance. Out-of-state students could pay upwards of $108,364 to obtain a degree.

College expenses have risen by 4.94% since 2015 nationally. However, those costs don’t include school supplies, books, room and board, student life fees, clothes, health care, food and transportation. For some students, the rising costs of higher education make getting a degree unattainable.

As a result, they could miss out on professional opportunities, a livable salary and greater health outcomes. A 2023 study from the Center on Children and Families at Brooking uncovered significant socioeconomic gaps in college enrollment — 51% of students from low-income households attend college, compared to 89% of students from higher-income families.

Even with student loans, college can be a financial risk for individuals from underserved communities and low-income households. After all, many have to pay back astronomical loan debts following graduation.

Scholarships and grants are advantageous for individuals with exceptional financial need. In most situations, these awards are nonrepayable. Therefore, financing one’s education with scholarships and grants is an excellent way to offset costs and reduce debt later.

Defining Scholarships and Grants

Although scholarships and grants are both forms of financial aid for higher education, they have different meanings. For example, companies, schools and organizations will offer scholarships to students, while grants are provided through federal and state governments. Likewise, it is crucial to understand the different types of awards to know what you or your children are applying for.

Scholarships

Scholarships are either merit or needs-based. Typically, students receive scholarship awards based on their academic performance, skills, athletics, extracurricular activities or program of study. For example, the Flywire Charitable Foundation awards $5,000 to students interested in sustainability, social justice and global health.

Likewise, higher education institutions also reward students for making significant academic contributions within their program of study. You might apply for a scholarship through your college’s Bioengineering or Social Work departments with a recommendation from a professor.

Sometimes, needs-based scholarships are available to outstanding students from underrepresented communities and groups, particularly those who are not financially secure or whose families cannot afford college tuition. In some instances, an awarding institution or organization will offer a prize for a semester, academic year or annually for the duration of enrollment.

Grants

Unlike scholarships, government-issued grants are almost always needs-based. There are four primary types of college grants as follows:

Federal Pell Grants: Available to undergraduate students demonstrating critical financial need who have not earned a degree.Federal Supplemental Educational Opportunity Grants (FSEOG): Also awarded to undergraduate students with financial need, with priority given to Federal Pell Grant recipients.Teacher Education Assistance for College and Higher Education (TEACH) Grants: Awarded to students from low-income families pursuing an education degree to teach at public or private schools.Iraq and Afghanistan Service Grants: Ineligible students for Pell Grants whose parents served and died during active duty in Iraq or Afghanistan after September 11, 2001.

Unlike scholarships, you may need to repay part or all of a Federal Pell Grant or FSEOG under unique circumstances. For example, you might withdraw from the program you received the commission for or change your enrollment status from full-time to part-time.

Likewise, you might have to repay a TEACH grant if you drop out of an education program or don’t fulfill your four-year teaching obligation after graduation.

Positive Outcomes of Seeking Financial Aid

Earning scholarship or grant money means you’ll have less to repay in student loans. College debt remains a serious problem as student loan debt has risen 302% in the U.S. since 2004. On average, students accrue $32,731 in debt for their higher education.

If college award money allows you to obtain a degree, imagine the positive outcomes of having one. Many people question whether a degree is worth it in today’s economy. Despite employers broadening their talent scope for more experienced-based hiring, 81% of college students believe going to college is beneficial.

A degree is always going to deliver returns throughout your life and career. For instance, a bachelor’s degree holder can earn $30,000 more annually than someone with a high school diploma.

College degrees also provide more stable job security, a broader professional network, better health care — from working at companies with excellent benefits packages — and greater life satisfaction.

Searching for Scholarship and Grant Opportunities

You can find scholarships and grant opportunities by visiting or contacting your school’s financial aid office, visiting your local library or searching for them online. If you’re still in high school, your school counselor will be able to provide you with information about scholarships you’re eligible for.

Other places to look for financial aid opportunities include the following:

U.S. Department of Labor’s free database of nearly 9,000 scholarships, grants and fellowshipsState grant agenciesNonprofit organizations, local businesses, religious organizations and charitable foundationsProfessional associations related to your intended field of studyColleges and universitiesCultural heritage organizationsLarge corporations, your employer or your parents’ workplaces

How to Apply for Scholarships and Grants

While students must fill out applications for scholarships and grants, eligibility, requirements and deadlines may differ. Here’s how to apply for both types of financial aid for a more affordable college education.

Applying for Scholarships

Once you’ve found a scholarship — or more than one — you’d like to apply for, it is essential to read over the details immediately. You will want to create a checklist to ensure you cover and submit everything it asks of you.

Eligibility

The first thing you need to do is review the eligibility rules to ensure you match. Usually, you must be a U.S. undergraduate student, graduate student or incoming first-year student at an accredited school. Some scholarships only consider applicants from a specific program of study or particular interests.

The award issuer might also require a minimum grade point average (GPA), which is why you must remain in good academic standing.

Application Requirements

A scholarship application might ask for supplemental information to aid the issuer’s decision. For instance, some applicants may need to submit a video, essay, letter of recommendation, resume or other materials.

Additionally, proof of academic standing — such as a recent transcript — or evidence of the completed FAFSA form might be required, especially if a scholarship is needs-based.

Deadlines

Always apply for scholarships as early as possible to avoid missing the deadline. Organization is vital if you’re applying for several scholarships at once.

A spreadsheet will help you track which scholarships you’ve already applied for, the status of your application decision and the outcome. It also makes it easier to see when deadlines are coming up for each pending application.

Applying for Grants

A college financial aid advisor or high school counselor can help you or your child navigate the grant application process, including filling out the FAFSA form and determining which grants you might be eligible for based on the financial aid award letter you receive.

Eligibility

You must complete the FAFSA form to be eligible for a college grant. FAFSA lets you know how much grant money you can receive.

For instance, the government modifies grant amounts annually. The maximum Federal Pell Grant was $6,895 in the 2022-23 academic year and will increase by $500 to $7,395 in 2023-24. Eligible students will qualify for at least 10% of the maximum amount for the year.

Students must also have excellent academic standing and not already have a college degree. Those pursuing a TEACH grant must graduate with at least a bachelor’s in education and are obligated to give back four years of teaching service.

Application Requirements

Whereas scholarship specifications might ask students to submit additional materials, most college grants only require a completed FAFSA form. This is because grants are needs-based and only issued to those who need financial assistance to enroll in school.

Whether you apply for a grant or scholarship, students should never have to pay to search or apply for gift aid. If an issuing institution asks for a form of payment, it’s likely a scam.

Deadlines

Students are considered for a grant as soon as they complete their FAFSA form. FAFSA opens on October 1 annually.

Submitting the form as soon as possible is critical since some schools offer aid on a first-come, first-served basis. Students might miss out on possible monetary assistance if they submit their grant applications late and there are insufficient funds.

Tips and Reminders to Win Financial Aid for School

Winning a scholarship or grant award is a big deal. Every award amount counts toward gaining accessible and affordable education. You can up your chances of receiving financial aid for a college degree in the following ways:

Find opportunities to shine on your resume, including volunteer work and special projects.Always apply for financial aid opportunities — including scholarships, grants and FAFSA — even if you think your family income disqualifies you.Don’t settle for one opportunity — simultaneously apply to several scholarships and grants. Ask for one or two letters of recommendation from school counselors, teachers, college professors and mentors who can speak to your abilities.Speak to your school counselor or financial aid advisor to find out if there are any opportunities you missed or are unaware of through the school.

Remember to apply for smaller scholarships and grants, too. While it would be nice to receive a six-figure scholarship, several award amounts are in the $300-$5,000 range. These smaller prizes are just as valuable for covering books, supplies and room and board.

Making College Accessible With Financial Aid

Anyone who hopes to pursue higher education should be able to do so, regardless of economic or sociological barriers. After all, a degree can significantly aid individuals in launching a lucrative career and achieving personal and professional success. In this regard, scholarships and grants make education more accessible to everyone.

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