As the workforce becomes more competitive, an education is more and more necessary—but it’s coming at a steeper price. Over the past 30 years, college costs have increased faster than the rate of inflation; all told, the cost of tuition and fees has gone up a whopping 1,120%.
According to CourseSmart, in the 1972-1973 school year public tuition and fees averaged $2,225, while private tuition cost $10,378. In the 2012-2013 school year, those numbers have skyrocketed–$8,655 for public school and $29,056 for private school. And in the 2010-2011 school year, students spent more than $1,100 on textbooks.
With America’s student loan debt topping $1 trillion—an alarming milestone reached in 2011—it’s clear that many of us are struggling with how to pay for our education.
Financial assistance in the form of grants and scholarships may be the answer for many. Unlike loans, which must be paid back and may accrue interest or fees in the meantime, both grants and scholarships are free money—that is, they don’t have to be paid back. In very general terms, scholarships tend to be awarded by colleges, foundations, community organizations, labor unions, houses of worship, and sometimes federal and local governments. Grants can also come from a variety of sources, including colleges or private sources, but most often they are funded by the federal or state government. So what’s the difference?
A scholarship is financial aid awarded to further a student’s education. Hundreds of private and public organizations offer scholarships, and the criteria varies. Some scholarships are paid straight to the recipient, while others are issued to the school the student attends as a direct payment toward tuition and/or fees. The most common types are classified as:
Scholarships may or may not have strings attached, otherwise known as a “bond” requirement that requires the recipient to work for a particular employer, go into a particular career field, and so forth.
In contrast, grants are almost always given to fund a specific project or defined goal, and they usually carry a bond requirement. Grants may pay for tuition, but they may also pay for a specific research project, arts endeavor, or a wide range of other activities.
Stepping back for a moment, the term “grant” has a much broader scope. Grants are awarded to individuals to pay for their education, but they may also be awarded to first-time homebuyers, business owners, nonprofit entities, and educational institutions. The U.S. federal government offers tens of thousands of grants, totaling billions of dollars each year, for projects ranging from research to construction, in fields like art, health, science, and human services. You can get a grant to help defray the cost of installing renewable energy systems in your home; a grant to conduct scientific research; a grant to pay for living expenses while you take time off work to write a book. For more information on grants offered by the U.S. government, visit benefits.gov.
Like student-based scholarships, grants may be offered to specific individuals based on their gender, ethnicity, financial need, or other factors. Grants also require an application, and grant-writing is an entire industry thanks to the intricacies of the application process. (After all, we are talking about billions of dollars in free money!) One major limitation of government grants is they are generally not available to non-U.S. citizens.
After a grant or scholarship is awarded, it’s still up to the recipient to continue meeting whatever compliance standards are required—at the baseline, a minimum GPA is usually required. A student on an athletic scholarship have to stay on the team and maintain passing grades; a student who received a grant to perform research must continue that research.
There are a few other ways that students pay for their education, including:
There is no shortage of options for paying for your education—so do your homework! It’ll be good practice!
Scott Hawksworth is YesCollege.com's founder and podcast host. His goal with the show is to not only help prospective students gain first hand knowledge about the degree programs they'll enroll in, but to also highlight the careers of fantastic professionals in higher ed. Scott has a Bachelor of Science degree in business administration from The Ohio State University.
How to Determine Dependency Status in 3 Simple Steps
Five .Gov Websites to Bookmark for College
What is the Value of a College Degree?
101 Best Databases For Finding A Scholarship Online
Top 99 Twitter Accounts Covering Financial Aid