College Grants Can Make Higher Education More Affordable
Student loans and scholarships are two of the most common ways that families and students reduce the financial burden of higher education. But there's also a third alternative that can provide a helpful financial resource—college grants.
Grants provide free money that can help with expenses like tuition, on-campus room and board, and supplies. While student loans need to be paid back with interest, grant money comes with no expectation of repayment. In this way, grants are similar to scholarships, another form of gift aid. They both can be based on financial need or awarded for merit—like academic or athletic achievements. Generally, though, grants are need-based.
Types of grants
The federal government is the largest provider of grants, but other sources include states, colleges, nonprofits and private organizations.
Some grants are tailored to specific populations. There are grants for women, ethnic minorities and students with disabilities, for instance. In addition, the Iraq and Afghanistan Service Grant is designated for students whose parent or guardian was a member of the US armed forces and died while serving in Iraq or Afghanistan after the events of September 11, 2001.
One of the most common forms of gift aid is the Federal Pell Grant. The amount of the award changes yearly, but eligible undergraduate students with exceptional financial need can qualify for just over $6,000.
Federal Pell Grant recipients receive priority for another grant for undergrads with exceptional financial need, called the Federal Supplemental Educational Opportunity Grant.
Meanwhile, Teacher Education Assistance for College and Higher Education, or TEACH, is a federal grant that gives funds to students who agree to serve at least four academic years teaching in a high-need field like science and working with low-income students.
Finding and applying for grants
The only way to apply for aid from the federal government is to fill out the Free Application for Federal Student Aid, or FAFSA. Completed FAFSAs are sent to colleges that applicants list in the form. The schools use the information to figure out how much, if any, federal aid individuals can receive. Many states and colleges also use FAFSA data to determine which grants and other aid they can provide.
Some schools require students to fill out more in-depth applications for non-federal aid such the College Board's CSS Profile.
Colleges send financial aid award letters to eligible applicants they've accepted. This letter will include the amount of federal grant money that's offered. Schools may also list money they're offering—known as institutional aid—as well as state aid.
Students can track down additional grant opportunities by searching online and speaking with guidance counselors and financial aid officers.
Grant providers have various deadlines, and some grants are awarded on a first-come, first-served basis. That's why it's best to submit a FAFSA and CSS Profile as soon as possible once they become available on October 1 for the next school year. Students who want to stay eligible for aid generally need to file a FAFSA each year, and schools may also require returning students to resubmit a CSS Profile.
It's important to note that while grants are gifts, there are scenarios where they may need to be repaid fully or in part. Students will likely need to pay the money back if they withdraw from school early, for example. Likewise, TEACH grants are converted into loans if recipients don't complete the teaching service commitment.
While grants for college students don't usually cover all the expenses of higher education, this source of funding can still lighten the load significantly for students and families.
A few financial insights for your life
This information is provided for educational purposes only and should not be relied on or interpreted as accounting, financial planning, investment, legal or tax advice. First Citizens Bank (or its affiliates) neither endorses nor guarantees this information, and encourages you to consult a professional for advice applicable to your specific situation.