A Complete Guide to Federal Grants and How to Apply

Many Americans are familiar with the term federal grants, yet few understand the types available and the application process. If you're unsure about how grants work or eligibility requirements, taking time to learn can be highly beneficial. Understanding grants helps you access these funds when needed, reducing financial burdens.

Grants, Scholarships, and Loans

Both scholarships and grants are considered "gift aid" because they are funds given without the expectation of repayment. Grants are usually need-based and available for various purposes, whereas scholarships are typically merit-based and often targeted toward students. Loans, in contrast, must be paid back and are offered by banks and other financial institutions.

Federal, private, and nonprofit organizations offer grants, especially for students. While grants are primarily need-based, scholarships focus on academic merit. Some institutions also offer scholarships to motivate student achievement. Unlike grants and scholarships, loans must be repaid to the lender.

Types of Federal Grants

Understanding the different types of grants is vital before applying. Federal grants are categorized into four main groups:

Pell Grants: Aimed at students who haven't completed their bachelor's degree and lack the funding for graduate studies.

FSEOG (Federal Supplemental Educational Opportunity Grants): For low-income students enrolled in participating colleges, these grants support those in urgent financial need.

TEACH Grants: Limited to $4,000 annually, this grant is for students committed to teaching in underserved schools for four years.

Iraq and Afghanistan Service Grants: These grants honor students whose parents or guardians died serving in Iraq or Afghanistan.

Applying for Grants

Most federal grants require completion of the FAFSA (Free Application for Federal Student Aid). Applying annually is necessary to maintain eligibility, along with adhering to the grant-specific requirements.

When Repayment is Necessary

Federal grants usually do not need repayment. However, if students withdraw early, change enrollment status, accept multiple grants, or fail to meet teaching commitments (in case of TEACH grants), repayment may be required. The school guides students through the repayment process, typically offering a 45-day window. Failure to act within this period may lead to loss of aid and personal financial responsibility.

Knowing the rules and keeping track of grant requirements helps maintain eligibility. Always review application guidelines thoroughly when applying online to ensure ongoing qualification.