Scholarship Grants 2026: How Scholarships Differ from Grants and Where to Find Them

"Scholarship" and "grant" are often used interchangeably — both are money you don't have to repay. But there are meaningful differences in how the two are awarded, who funds them, and where you find them. This page explains what scholarship grants actually are, the main categories, where to search legitimately, and how to avoid the scams that target high school seniors and college students every year.

Scholarship vs. grant — what's actually different

Both are tax-treated the same way for students — non-taxable when used for tuition and required fees at an eligible institution, taxable when used for room, board, and personal expenses. See IRS Topic 421.

For a fuller comparison of all the money types in college funding (and where loans fit), see our grants vs. loans page.

The five main scholarship categories

1. Merit-based scholarships

Awarded for academic, athletic, artistic, or leadership achievement. Examples:

• National Merit Scholarship — based on PSAT/NMSQT scores, awarded to roughly 7,500 finalists annually.
• Coca-Cola Scholars Program — 150 awards of $20,000 each per year for academic and leadership achievement.
• Burger King Scholars Program, Elks National Foundation Most Valuable Student, and many others.

2. Need-based scholarships

Functionally similar to grants — awarded based on the FAFSA-determined Student Aid Index. Many large universities use need-based institutional scholarships to bring net cost below sticker price for low- and middle-income admits. Apply through the FAFSA plus, at some private colleges, the CSS Profile.

3. Identity- and demographic-based scholarships

Awarded based on race, ethnicity, gender, religion, first-generation status, sexual orientation, or other identity factors. Examples:

• UNCF (United Negro College Fund) — see our African American grants page.
• Hispanic Scholarship Fund — see our Hispanic grants page.
• American Indian College Fund, APIA Scholars — see Native American and Asian American pages.
• AAUW (American Association of University Women) — for women — see our women grants page.
• Point Foundation — for LGBTQ+ students.
• Catholic, Jewish, Muslim, and other religious scholarship programs.

4. Career and field-of-study scholarships

For students entering specific professions. Examples include:

• NHSC Scholarship and NURSE Corps for primary care and nursing (see nursing grants).
• AICPA Scholarships for accounting students.
• Society of Women Engineers (SWE) scholarships for engineering.
• National Education Association (NEA) Foundation awards for future teachers.
• Bar association and law-school scholarships (see law grants).

5. School-specific scholarships

Most U.S. colleges and universities operate their own internal scholarship programs — merit awards for admitted students, departmental scholarships in specific majors, scholarships for transfer students, and named donor scholarships. Always ask each school's financial aid and admissions office which internal scholarships you may be considered for and whether any require a separate application.

Where to search (legitimately and for free)

Scholarship searches should never cost money. Use these free databases:

• Federal Student Aid scholarship resources — federal scholarship finder and guidance.
• CareerOneStop Scholarship Finder — operated by the U.S. Department of Labor.
• College Board BigFuture — searchable database of scholarships.
• Fastweb — large free scholarship database (account required).
• Scholarships.com — free database.
• Your high school counselor's office — many local civic-group, employer, and community-foundation scholarships are never listed on national databases.
• Your state higher-education agency — state-specific scholarships often have less competition.
• Your college's financial aid office — for school-specific opportunities.
• Your parents' employers — many large U.S. employers offer scholarships for employees' children.

How to apply

1. File the FAFSA as early as possible — this is the gateway to federal, state, and most institutional need-based scholarships.
2. Search early. Many scholarship deadlines are in the fall and winter before your college start date.
3. Apply broadly. Small, local scholarships (a few hundred to a few thousand dollars) have far less competition than national ones. Apply to 20–30+ small awards rather than relying on a few large ones.
4. Tailor each application. Reuse a core essay but customize it for each scholarship's prompt.
5. Get strong recommendation letters. Ask early — teachers and counselors write many letters in October and November.
6. Reapply every year. Most scholarship databases include awards for continuing college students, not just incoming freshmen.

Spotting scholarship scams

The Federal Trade Commission has issued specific warnings about scholarship scams. Common red flags:

• "You've been selected" for a scholarship you never applied for.
• Application or processing fee required.
• "Guaranteed" scholarship — no legitimate program guarantees you'll win.
• Request for bank account or credit card to "hold your award."
• High-pressure sales tactics at scholarship seminars selling expensive search services.
• "Free seminars" that turn into pitches for paid search services or financial-aid consulting.

Every scholarship search and every legitimate scholarship application is free. If a service is charging you a fee, you're paying for what FAFSA and free databases already provide. Report scams to the FTC at reportfraud.ftc.gov and your state attorney general.

Common questions

Are scholarships taxable? Scholarship funds used for tuition and required fees at an eligible institution are non-taxable. Funds used for room, board, travel, and personal expenses are taxable as ordinary income, even if the school disburses them directly to your student account. See IRS Topic 421.

Will winning scholarships reduce my financial aid? At most schools, yes — outside scholarships are typically applied first against your "remaining need" (filling the gap your financial aid offer doesn't cover), and then may reduce federal loan or work-study amounts in your package. Few schools reduce institutional grants because of outside scholarships, but policies vary. Ask each school's financial aid office how they treat "outside scholarship displacement."

Can I lose a scholarship after I win it? Yes. Most merit scholarships require maintaining a minimum GPA, full-time enrollment, and good conduct. Read the renewal terms carefully.

Do I need to be a U.S. citizen to apply for scholarships? For most federal-funded scholarships, yes. Many private and foundation scholarships accept permanent residents, DACA students, or international students. Read each program's eligibility requirements.

Are graduate-level scholarships available? Yes — see our graduate school grants page. The funding landscape at the grad level is different (predominantly fellowships and assistantships rather than scholarships per se).

Scholarship grants are real, free to apply for, and add up. The students who get the most are the ones who start early, apply to many, and never pay a fee to do so.