Navigating college funding can be confusing, especially when terms like “financial aid” and “scholarships” are thrown around. Understand the key differences between these two funding sources and how to maximize both for your education.

What is Financial Aid?

Financial aid is money provided to help students cover the cost of college, often based on financial need. It includes several types of assistance:

  • Grants: Free money you don’t have to pay back, like the Pell Grant.
  • Loans: Borrowed money that must be repaid with interest.
  • Work-Study: A program where students work part-time jobs to earn money for college.

How to Apply for Financial Aid:
Most financial aid starts with the Free Application for Federal Student Aid (FAFSA). This form determines your eligibility for federal, state, and school-based aid.

Pro Tip: Submit your FAFSA as soon as it opens on October 1, as some aid is distributed on a first-come, first-served basis.

What are Scholarships?

Scholarships are monetary awards given to students, usually based on merit, talents, or specific criteria. Unlike financial aid, scholarships don’t have to be repaid and often aren’t tied to financial need.

Types of Scholarships:

  • Academic Scholarships: For students with high grades or test scores.
  • Athletic Scholarships: For students excelling in sports.
  • Talent-Based Scholarships: For artistic or musical abilities.
  • Identity-Based Scholarships: For students from specific backgrounds, like minority or first-generation college students.

Where to Find Scholarships:

  • College websites
  • Local organizations and businesses
  • Online databases like Fastweb or Scholarships.com

Pro Tip: Search for niche scholarships related to your unique interests or characteristics to reduce competition.

Key Differences Between Financial Aid and Scholarships

Feature Financial Aid Scholarships
Based On Financial need (primarily) Merit, talent, or specific criteria
Application FAFSA or CSS Profile Separate applications, often essay-based
Includes Loans? Yes No
Repayment Required? Sometimes (loans) No

How to Maximize Financial Aid

If financial aid is your primary funding source, take these steps to get the most out of it:

  1. Complete the FAFSA Early: Early submission increases your chances of receiving limited grants and work-study funds.
  2. Check State Deadlines: Some states have separate deadlines for aid.
  3. Apply for Institutional Aid: Many colleges offer their own aid programs—be sure to fill out any additional forms required.
  4. Appeal If Necessary: If your financial situation changes after submitting the FAFSA, contact the school’s financial aid office to request a reconsideration.

Pro Tip: Avoid unnecessary borrowing by accepting only the amount of loans you truly need.

How to Win Scholarships

Scholarships require a bit more effort, but the payoff can be substantial. Follow these tips to improve your chances:

  1. Start Early: Begin searching for scholarships as early as your junior year of high school.
  2. Focus on Local Opportunities: Local scholarships often have fewer applicants, increasing your chances of winning.
  3. Tailor Your Applications: Personalize your essays and materials for each scholarship.
  4. Stay Organized: Keep a calendar of deadlines and track required documents.
  5. Apply for Many: Treat scholarship applications like a part-time job—the more you apply, the more likely you are to win.

Example: Instead of applying to only large, national scholarships, also target smaller awards of $500–$1,000. They add up quickly!

Can You Use Both Financial Aid and Scholarships?

Yes! Most students use a combination of financial aid and scholarships to fund their education. Scholarships can supplement financial aid, reducing the need for loans.

Tips for Combining Both:

  • Inform Your College: If you receive a scholarship, notify your school’s financial aid office so they can adjust your package if necessary.
  • Avoid Overawarding: Receiving too much aid can lead to a reduction in grants or work-study eligibility. Check your school’s policy.
  • Plan Ahead: If a scholarship is only for one year, budget for future years without it.

Beware of Scholarship Scams

Unfortunately, not all scholarships are legitimate. Watch out for these red flags:

  • Upfront Fees: Legitimate scholarships don’t charge application fees.
  • Guaranteed Money: No one can promise you’ll win.
  • Unsolicited Offers: Be cautious of emails or calls about scholarships you didn’t apply for.

Pro Tip: Stick to trusted sources like your high school counselor or reputable scholarship search engines.

Financial Aid vs. Scholarships: Which is Better?

The answer depends on your situation:

  • If you have financial need: Start with FAFSA to access need-based aid.
  • If you’re a high achiever: Focus on scholarships that reward academic or extracurricular success.
  • If you’re balancing both: Apply for both! They’re not mutually exclusive, and combining them can reduce your overall college costs.

Wrapping It Up

Understanding the differences between financial aid and scholarships is crucial for building a smart college funding strategy. By leveraging both, you can minimize debt and make higher education more affordable. Ready to take the next step? Start your FAFSA and begin your scholarship search today!

Related Content

Scholarships for First-Generation College Students: Where to Look

Being the first in your family to attend college is a major achievement — and a major challenge. From navigating applications to figuring out how to pay for it all, the process can feel overwhelming. The good news? There are scholarships out there designed...

Scholarships for Non-Traditional Students: Where to Look

Going back to school as a non-traditional student can be both exciting and overwhelming, especially when it comes to paying for tuition. Many scholarships are designed for recent high school graduates, but plenty of funding opportunities exist for adults returning to...

How to Find Scholarships That Fit Your Unique Background

Scholarships can open the door to a debt-free education, but finding the right ones requires knowing where to look. Many scholarships are tailored to specific groups or interests, meaning your unique background could qualify you for financial aid others can’t access....

How to Save Money on College Textbooks (Legally)

College is already expensive enough—tuition, housing, meal plans, and yes, those infamous textbooks. The average college student spends over $1,200 a year on books and supplies, but it doesn’t have to be that way. With a few smart (and totally legal) strategies, you...

How to Turn Campus Jobs Into Career Experience

For many college students, a campus job is simply a way to pay for books, food, or late-night coffee runs. You might be working in the dining hall, shelving books at the library, or checking IDs at the gym. At first glance, these roles might not feel like they connect...

Scholarship Application Mistakes to Avoid

Applying for scholarships is one of the best ways to reduce college costs, but even the most qualified students can lose out on funding due to simple mistakes. A strong application can mean the difference between winning free money for school or missing out on...

Choosing the Right Major: What to Consider for Career Success

Picking a college major is one of the biggest decisions you'll make in your education, and it can shape your career path for years to come. While it's important to follow your passions, choosing a major that aligns with job market demand, salary potential, and career...

How to Build a Strong Resume in High School

Your high school resume is your ticket to showcasing your unique skills and achievements to colleges, scholarships, and potential employers. Set yourself apart by learning how to craft a standout resume that reflects your strengths and potential. Why a Resume Matters...

Financial Aid Options for DACA and Undocumented Students

Paying for college is tough enough — and it can be even harder if you’re undocumented or a DACA recipient. Federal financial aid is off the table, but that doesn’t mean you’re out of options. From private scholarships to in-state tuition programs and university...

Essential Tips for Acing College Interviews

College interviews are your chance to make a lasting impression beyond your application. Master the art of showcasing your personality, goals, and enthusiasm with these essential tips for acing admissions and scholarship interviews. Understand the Purpose of the...

Check out these scholarships:

George and Donna Nigh Public Service Scholarship

The George and Donna Nigh Public Service Scholarship was established to provide scholarship opportunities to outstanding students who are preparing for careers in public service.Scholarship Sponsor Ok College StartAward Type $1,000 CashGender Eligibility AllOther...

Wisconsin Women’s Alliance Foundation Scholarship

The Wisconsin Women's Alliance Foundation Scholarship awarded to a female Wisconsin student attending a Wisconsin technical college or an accredited two-year or four-year Wisconsin college or universityScholarship Sponsor Community Foundation for the Fox Valley...

The 911 Promise Scholarship

The 9/11 Promise provides scholarships to qualified children of first responders and military service members who have been killed or injured and are unable to hold employment. Scholarship Sponsor 911 Promise Award Type $50,000 CashGender Eligibility AllOther...

Nellie Martin Carman Scholarship Fund

The Nellie Martin Carman Scholarship is available to graduating seniors from public high schools in King, Pierce, and Snohomish counties in Washington state (and a US citizen). Application forms are only available through these high schools and candidates for the...

Michael and Juanita Jordan Scholarship

Annual awards for Chicago, Illinois residents who are junior undergraduate students attending a UNCF member college or university. Scholarship Sponsor Michael & Juanita Jordan Award Type $5,000 CashGender Eligibility AllOther Requirements/Criteria Geographic Criteria:...

Naval Intelligence Essay Contest

The U.S. Naval Institute sponsors the Naval Intelligence Essay Contest. Applicants must write an essay no more than 2,500 words on one of the topics of choice. The contest is open to all contributors--active-duty military, reservists, veterans, and...

Saint Louis University John Paul Fechter Service Scholarship

SLU's Paul Fechter service scholarship is awarded to transfer students who have demonstrated significant dedication to community service. A separate application is required.Scholarship Sponsor St Louis UniversityAward Type $10,000 CashGender Eligibility AllOther...

EMU Presidential Scholarship

The EMU Presidential Scholarship is only available to incoming freshmen who have competed in the Presidential Scholarship Competition. Students must complete an EMU Admission Application as well as a separate application for the Competition. These applications are...

Students of History Scholarship

The Students of History Scholarship is offered to a graduating high school senior. Eligible applicants must: plan on attending an accredited post-secondary institution next year; complete at least 3 social studies or history classes in high school; and, have the...

NeW Essay Contest

In 1919, an amendment to the Constitution giving women the right to vote.To honor this significant moment in history, the Network of enlightened Women (NeW) Essay Contest is giving women the opportunity to reflect on and write about the importance of this movement and...

Colorado Christian University Dean’s Scholarship

CCU awards academic scholarships to new freshmen who meet specific academic requirements and are guaranteed for up to eight semesters as long as the student maintains satisfactory academic progress (SAP) and is continuously enrolled in CCU's College of Undergraduate...

Lily Pabilona Emerging Entrepreneur Scholarship

The Lily Pabilona Emerging Entrepreneur Scholarship recognizes Asian American high school, graduate and post-graduate students pursuing a career in entrepreneurship.Scholarship Sponsor Against The Grain ProductionsAward Type $5,000 CashGender Eligibility AllOther...

Ohio Township Association Scholarship

The Ohio Township Association offers two types of scholarships: Local Government Achievement and Academic Achievement. For the local government achievement scholarship, students must demonstrate outstanding citizenship through service and participation in community...

The Best Websites for Finding Scholarships

Searching for scholarships can feel overwhelming, but the right websites can make the process much easier. Instead of manually sifting through hundreds of programs, scholarship search engines allow you to filter by eligibility, deadlines, and award amounts. Whether...

Tennessee Minority Teaching Fellows Program

The Minority Teaching Fellows Program is intended to encourage talented minority Tennesseans to enter the teaching field in Tennessee. This award is for students who are pursing a teacher certification at an eligible Tennessee college or university. Scholarship...
Skip to content