It’s no secret that college is becoming extremely expensive in the United States and that prices are increasing much faster than the rate of inflation. Many families struggle to save enough to pay for tuition, which means that students are forced to take out significant amounts of money in the form of student loans. Currently, Americans owe a collective 1.5 trillion dollars in outstanding student loan debt. 

While this situation might seem dire, the good news is that there are a number of federal grants, which can help significantly when it comes to defraying the costs associated with attending college. Grants are similar to scholarships in that they provide students with funds for college that don’t need to be repaid.

This guide covers everything you need to know about college grants, as well as provides a collective resource of some of the most popular options available.  

What Are College Grants and Scholarships?

College grants are a need-based form of financial aid that is awarded to students by both the federal and state governments, as well as some individual colleges and universities. Unlike a student loan, however, grants don’t need to be repaid, which can significantly reduce tuition obligations and make college more affordable, especially for low-income families. 

Grants are also made available to students who fit a specific need that has been identified by schools, governments, and private organizations. For example, a field with a desperate need for educated employees may have grants available to help facilitate the entry of students into the field who could otherwise not afford education or, at the very least, would be severely hampered by the financial requirements to do so.

Scholarships, on the other hand, are often merit-based and awarded for things like excellence in academics, athletics, and the arts. There are also a variety of scholarships available based on ethnicity, special-interests and community service.  Many scholarships are funded by corporations, foundations, and community organizations award scholarships, in addition to universities themselves and the government.

When Are They Needed?

College grants are most often needed when students come from low-income families and have little-to-no merit-based accomplishments. Grants are also a great option for students to consider who cannot get approved for student loans.  Students can apply for grants as high-school seniors, as well as when they are pursuing their Bachelor’s and Master’s degrees.

With that said, regardless of income level, there are grants that can be used by any student. The cost of post-secondary education is rising and becoming a major burden for students as they take on debt that can hang over them for years after graduation. Grants can help offset this cost and make following a specific career path much easier.

How Do You Apply for a Grant for College?

Applying for college grants can sometimes seem a daunting task.  After all, there’s typically a substantial amount of paperwork to fill out, and certain verbiage can be difficult to understand.  The good news is that by breaking things up into easy-to-follow steps, the process becomes much more manageable.

1. Fill Out the FAFSA

The Free Application for Federal Student Aid (FAFSA) is the single most important form for determining eligibility for grants and loans, tax benefits. The FAFSA website is also a fantastic resource for students since it’s full guides on avoiding fraud, budgeting, loan repayment options, and even test prep tips. 

Students will need various documents like W2s, tax returns, bank statements, investment statements, and a valid government-issued ID to complete the FAFSA form. The federal government will then use these documents to check income, assets, and liabilities. Students are encouraged to submit their applications electronically so that they can transfer tax data digitally via the IRS data retrieval tool. This makes it easier to input important tax data, and also reduces common mistakes.

Schools award benefits on a first-come, first-served basis, so it’s important to submit the FAFSA as early as possible.

2. Research Private Grants

Students can access a variety of different grants by using the US Department of Labor’s database, which contains information on over 8,000 scholarships and grants nationwide.  Data is organized based on the level of study, award amounts, and deadlines. The US Department of Education’s website is also a treasure trove of data on grants, scholarships, and financial aid.

Additional resources for researching grants are as follows:

Also, keep in mind that specific grant programs may be available for a variety of degree types.  For example, students that want to work in PR should check out the Public Relations Student Society of America to look for grants and scholarships.  The AICPA governs all the CPA’s in the United States and offers grants to various ethnicities – including African Americans and Hispanics – to promote diversity in the accounting field. These types of awards are based on both need and merit.  Job Stars USA has published a convenient alphabetical list of professional organizations, which is definitely worthy of checking out to see if there are any grants available for your specific chosen career path.

3. Review the Financial Aid Letter You Receive

Each student accepted into college will receive a financial aid letter. This important document details fundamental information about the cost of attendance, and loan information, as well as any federal and/or state grants that have been awarded. It will also highlight a student’s eligibility for institutional grants and work-study programs. 

Work-study programs provide students with an opportunity to work on campus at recreation facilities, book stores or other on-campus locations.  This program is federally funded and encourages students to be responsible while in school by having a part-time job. 

How Do FAFSA, EFC, and 529 Plans Work Together?

To better understand grants and the way they work, it’s important to understand the relationship between FAFSA, EFC and 529 plans. 

FAFSA

As previously discussed, students must fill out a FAFSA in order to even be considered for state and federal grant money. Once a FAFSA is completed, the Expected Family Contribution (EFC) will be calculated.

EFC

The EFC is a numeric score that takes stock of a family’s assets, liabilities, taxed and untaxed income, and other benefits like social security, disability, unemployment, and pension. The higher an EFC score is, the more likely a student will need to take out loans, not grants.  

529 Plan Basics

Many parents start investing in mutual funds, ETFs and other investments for years prior to their children even starting school. 529 plans allow for tax-free gains if funds are used for qualified educational purposes. Keep in mind that they aren’t federal tax deductions for contributions, but some states do allow for deductions to be taken. 

529 Details

It’s important to be aware of how 529 plans can affect EFC.  For example, the EFC score doesn’t factor in the first $20,000 of a 529 account balance, but it does factor in 5.64% of the account balance above this figure. This percentage is relatively low as the FAFSA includes 20% of the balances of other accounts like brokerage accounts or Roth IRAs. While percentages of account balances of 529s are included in the FAFSA for income calculation purposes, distributions from parent or student-owned 529 plans to pay for current year expenses are not.

It’s also important to note that grandparents can start 529 plans for their grandchildren, which isn’t counted as an asset on the FAFSA. Distributions from these accounts will be treated as income on the FAFSA, however. So, if a student withdrew $10,000 from a grandparents’ account to pay for college, his or her aid eligibility would decrease by 50%, or $5,000.  There is a way to mitigate this impact, however, which would entail having grandparents wait to contribute until a student completes their first year of school since the FAFSA looks at income from two years prior.

It’s extremely important to be aware of the fundamentals of FAFSA, EFC and 529 plans. Because there are many intricate details at the federal, state and university level, it’s wise to ask a tax or financial advisor for assistance regarding this topic. It would also be prudent to ask financial aid officers about their own policies as well.

Types of College Grants Available

When searching for college grants, you will quickly find that there is a wide range of college grants available. These can vary based on the work history of the applicant, the industry or area of study they are pursuing, their income level or the income level of their family, and other requirements. It’s important to review the many types of grants available to see which ones you may qualify for based on your unique situation and area of study.

Grants for Teachers and Education Students

Those that are looking to find work as a teacher once they have completed their education may be interested in one of the many teaching grants available to help aspiring teachers afford their college education and become a productive educator that will inspire the next generation of learners, thinkers, and creators.

  • The Teacher Education Assistance for College and Higher Education (TEACH) Grant help aspiring teachers pay for their college education. Up to $4,000 per year is available through the program to pay for studies. With this grant, it’s important to understand the work requirement after graduation. Teachers who have accepted the TEACH Grant must work at least 4-years in a high-need field or low-income school within the 8-year period after graduation. If this requirement is not satisfied, the TEACH Grant is converted into a loan with interest which can be backdated to the issue date of the TEACH Grant.
  • Transition to Teaching is a federal program that combines grants and loans to help aspiring teachers earn their education and start their careers. This program uses existing grants, like the federal Pell Grant, as well as loan forgiveness to help entice new teachers into the profession. There are certain requirements that must be met in order to earn loan forgiveness but, if those requirements are met, it’s fair to look at these loans as grants.
  • The Academic Competitiveness and National SMART Grants are grants aimed to help students that are interested in specializing in teaching fields that are considered of high need. These fields include mathematics and science. For students interested in teaching in these areas, there are national grants available to help fund their education and satisfy a need for schools around the country that are having difficulties filling some roles.
  • Teach for America is a unique work-study, grant, and loan program from people who do not have a teaching background but have an experience that may help them fill a need for school. Those that want to transition into teaching may find Teach for America is helpful in getting their foot in the door and getting some much-needed financial assistance. It should be known that Teach for America often assigns students in areas where there is a major need for teachers and, as a result, the districts may not be the most desirable for some to work in.
  • The American Council of Learned Societies (ACLS) offers a number of grants for aspiring teachers that are studying the various humanities fields like political science, history, and sociology. This is a private grant and may have unique requirements when compared with federal or state grants available.
  • Robert G. Porter Scholars Program is a grant offered by the American Federation of Teachers and is only available to student members of the federation. Students can get up to $8,000 based on their area of study and level of achievement.

Nursing Grants

Many states across the country have a need for nurses. One of the ways that governments and private organizations are stepping up to fill this need is through nursing grants which can help entice people to enter the field who would otherwise be unable or unwilling to pay the significant cost of complete nursing education.

  • The Indian Health Service Loan Repayment Program is a federal program that helps nursing students with loan forgiveness after completion of their education based on a work requirement. Those who practice full-time at an HIS facility may get up to $20,000 per year in loan forgiveness which is essentially a grant for nursing education.
  • Army Nurse Corps offers many benefits to nurses who are interested in working alongside the military to provide care for members. Those who take on positions within the Army Nurse Corps can enjoy up to $120,000 in loan forgiveness plus many other benefits. Continuing education grants and sign-up bonuses are also available.
  • Members of the National Association of Hispanic Nurses can apply for grant funding. This grant aims to increase the representation of Hispanic people in the field of nursing. Applicants must be a member of the association for at least 6 months to qualify.
  • There are also a number of state grants to help states train and employ students who can fill nursing vacancies in the state. For example, Indiana offers a nursing grant to those who commit to work 2 years in the state as a nurse. For this commitment, up to $5,000 may be available. The Maryland Higher Education Commission also has grants for areas where there is a workforce shortage which includes nursing. These programs use a combination of scholarships and grants to fill employment needs in the state.
  • Some private organizations offer nursing grants as well. The Bob and Eleanor Grant Trust services students in Washington State who have already completed half of their nursing education. For these students, up to $15,000 may be available through grants.
  • March of Dimes is a private organization that offers grants to help improve maternal health in America. Some of the grants offered through the organization are directed specifically to minority groups and those that may be underrepresented in nursing like African American nurses and Hispanic nurses. Up to $5,000 may be awarded annually through these grants.

Grants for Veterans and Their Loved Ones

Veterans and their families give a lot to the country. In return, to help military servicemen and women and their families, there are a number of grants available. These grants are designed to help veterans transition back to civilian life or assist military families with the cost of educating their children while they dedicate their time to serving the country.

  • Disabled veterans can qualify for many different military and veterans grants but there is one specific to their situation. Through the AFCEA Education Foundation, veterans who have been injured in active duty can qualify for grants of up to $2,500 when completing a two or four-year program.
  • For children and family members of Air Force members, there is the General Henry H. Arnold Education Grant. This grant awards up to $4,000 to the dependents of Air Force members who are seeking an education and is based on need including family income.
  • ThanksUSA offers a grant to children and spouses of active-duty military members and those who have been killed in the line of duty. This grant is based on need and awards up to $3,000 to the 500 recipients that are selected each year.
  • The Montgomery GI Bill is a grant program for service members and reservists. This is one of the most popular and well-known military grants that help service members transition back into civilian life after their duty has ended. Members must pay $100 per month while they are in active service to be eligible for the grant.
  • For students who have lost a parent during the Iraq or Afghanistan wars after 9/11, there is the Iraq and Afghanistan Service Grant. To qualify for this grant, students must not be eligible for the Federal Pell Grant which is awarded to low-income families. Students that qualify for this grant may be awarded up to $6,195 per year.

List of Awards for Underrepresented Groups

Minority groups are often underrepresented in post-secondary institutions. To combat this disparity, there are a number of grants available to help underrepresented groups pay for a college education. These groups could include visible minorities or those with disabilities who struggle financially to attain higher education.

  • The United Negro College Fund (UNCF) awards a number of grants to African American students. With up to $100 million available in grants each year, there are many opportunities for underrepresented students to get the education they have always dreamed of.
  • Many colleges offer grants for African American students specifically. One popular example of this is the Mordecai Wyatt Johnson Scholars Program which is a grant of up to $5,000 offered to students at Howard University who meet all of the requirements of the grant.
  • Hispanic students in Florida may apply for the Jose Marti Challenge Grant which awards up to $2,000 per year to students. Students with the highest financial need have the best chance to earn the grant but it also considers things like academic achievement.
  • The Association for Asian Studies offers a number of grants for students of Asian descent who are seeking post-secondary education. Some of these grants are based on an area of study and may require students to major in specific areas like Japanese studies, for example.
  • For Asian American students looking to study journalism, there are several grants available from the Asian American Journalists Association. These grants help students focus their studies in areas like sports journalism, broadcast news, writing, and more.
  • Native American students may qualify for grants from the Tribal Colleges Education Equity Program which awards millions of dollars to students each year. There are several areas of need identified where students who are studying in the field are eligible for the grants available.
  • The Unmet NEED Grant Program is another grant available to African American students and awards up to $3,500 for those who qualify for low-income financial assistance. This grant is unique in that it is supposed to supplement other grants and income sources. Students must prove and additional need for funds that are not satisfied through other grants or scholarships.

The Most Common Federal Grants 

Many of the grants already mentioned focus on a specific area or need. However, there are a number of grants available that focus mainly on financial need for all students. These grants are awarded regardless of area of study and should be considered by all eligible college students to help offset the cost of their education. Some other federal grants focusing on specific groups or areas of study have already been mentioned previously in this article.

  • The Federal Pell Grant is one of the most common grants awarded to college students. Those who come from low-income families may be eligible for up to $5,000 per year to offset the rising costs of college. Families must earn less than $50,000 per year for students to qualify.
  • Another grant available to low-income students and their families is the Federal Supplemental Educational Opportunity Grant. Depending on need, students may be eligible for up to $4,000 per year. The online application is quick and easy. Each year, nearly a billion dollars is awarded to students that qualify.

Bottom Line

It might seem daunting to find ways to attend a college that don’t involve amassing a ton of student loan debt.  Fortunately, a variety of scholarships and grants are available to help defray the costs of higher-education, sans loans. And in a day and age when young graduates are crippled by high monthly student loan payments, investing the time into researching – and applying – to scholarships and grants is a winning strategy that will significantly (and positively) impact the future of your financial health.