No, College Grants Are Not Repaid

No, College Grants Are Not Repaid

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On the surface, this question may seem silly to some, but it is clear that there is some confusion about how college financial aid is handled.

For the record, the Merriam-Webster dictionary describes a grant as follows:

…to bestow or transfer formally; specifically : to give the possession or title of by a deed.

With a grant the operative word here is to “bestow” or to convey as a gift. A gift is given freely with no expectation of receiving something in return, right? And that is what a grant is — a free gift in the form of free money that is applied to your college education.

Grants to college students are a huge benefit, one that effectively reduces the cost of education with very few strings attached. One string is that the money needs to be used for your education and is typically awarded directly to your school and applied to your financial aid.

Another string is that you must be eligible to receive assistance. For example, the Federal Pell Grant program awards up to $5,550 per year, but that amount is based on your family income, the cost of college, your status as a full- or part-time student and if you plan to attend college for the entire academic year.

Pell Grant money is not repaid. Your school can apply grant funds to your school costs or pay you directly, typically with a check. In some cases, it may combine these two methods.

A grant is not a college scholarship, but both do the same thing — provide a gift of money to be used toward your college education.

The confusion with grants and scholarships may have to do with the Student Aid Report you receive. That report is based on the Free Application For Student Aid or FAFSA, and outlines how much aid you will receive. Aid, by the way, is not repaid. Instead, what you owe is what the college tells you that you owe. That bill is usually paid with your own funds, but if you come up short, you may take out a student loan.

Student loans, whether they’re a federal Stafford loan or a private loan such as the Sallie Mae Smart Option Student Loan must be repaid. These loans are not grants and become debt for the student or the parent, sometimes both.

For the student that wants to avoid debt, seeking grants and scholarships can reduce your college expenses. Federal Pell Grants aren’t the only grants available as some states have grant programs too. College scholarships are available through your school and are distributed by corporations, nonprofit organizations and foundations.

Apply for whatever grants and scholarships that are available to you, and count every dollar awarded as a gift to fund your educational pursuits.

College Financing reference:

finding money for college guide

 
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Categories: Grants