Making sense of financial assistance terms
July 10, 2012
For anyone going back to school and looking for financial support, the options can seem daunting. Not only are there many monetary awards available, but they all have different names and conditions. The first step in applying for financial aid, scholarships and grants is understanding what each is.
Financial Aid
For the most part, this is used as an umbrella term. However, financial aid is most commonly considered money given to students by their college or university based on financial need, determined by family income, assets and other factors such as academic performance. Most universities have financial aid programs, but not all. These services are important to check when searching for potential schools.
Scholarships
Technically speaking, scholarships are financial awards based on merit, such as academic excellence, community service or leadership. These awards are given out by colleges, universities, foundations, organizations and government agencies. Although many also pertain to financial need, they are most commonly personalized to specific talents or unique circumstances. This is why single parents should apply for scholarships for moms and dads, since the application requirements are focused and therefore get less applicants. Think about what other specific talents you hold, and find scholarships for your particular strengths.
It's important to note that most scholarships have requirements not only prior to attainment, but also after. Many require a minimum GPA and number of credits taken in order to keep the scholarship. Also, some may require a final piece of work or presentation, such as a project that gives back to the donor.
Grants
Grants are typically given solely by nonprofit organizations, which means they are tax exempt. Primary examples are federal grants given out by the U.S. government, such as a Pell Grant or the Federal Supplemental Educational Opportunity Award. These grants are most commonly decided by financial need.
Other nonprofit organizations giving grants may be public or private corporations. Like scholarships, many grants from nonprofits expect you to report back to them so that the donor knows how the money is being spent.
Grants, however, do not always pertain to college finances. They can also be awards to individuals pursuing another initiative, such as a business start-up or an overseas research project.
