Function

• The thousands of dollars needed for tuition payments and other school costs can be reduced significantly, if not covered, with scholarships and grants. Every program has a purpose. The U.S. Department of Education and other government agencies provide financial aid to students often with the broad purpose of simply sending students to school if they otherwise couldn't afford it. Other government agencies, private businesses and nonprofit organizations award scholarships or grants to encourage students to pursue certain careers, help certain demographics earn degrees or support the children of employees.
  
  

Differences

• While scholarships and grants have the same root goal of helping to pay for college, there are several differences between the two types of funding. StudentLoanInfo.org, for instance, cites eight key differences on its website. Grants tend to come from government or nonprofit agencies, but scholarships can come from for-profit businesses. Scholarship tend to require merit-based criteria, such as high GPAs, while grants often look at the students' financial situation. Scholarships and grants can have different limitations on their use, specifying what expenses they can be used to cover.
  
  

Types

• Scholarships and grants break down into types. Grants often are based on students' needs while scholarships are based on a set of criteria. Scholarships award students for academic performance, athletic performance, the majors they choose, the careers they pursue, the companies their parents work for and dozens of other criteria. Grant types often depend on what agency they come from. The Department of Education awards general types of financial aid, such as federal Pell Grants, which provide students with money based on their financial situations -- the more they need, the more they receive. Other government agencies, however, award grants to recruit students into specific fields.
  
  

Sources

• Searching for scholarships and grants can require a significant investment of time and resources. Typing "scholarships" or "grants" into an online search engine pulls up dozens, if not hundreds, of databases of financial aid sources (As a caution, some websites solicit memberships or fees, but the scholarships they list often are available on other websites). The college preparation website CollegeBoard (see Resources) recommends students speak with their high school guidance counselors for direction with where to look for aid.