Higher education is a big investment, but students don't need to pay the full tuition sticker price to fund their degree programs thanks to financial aid. A big part of that financial aid consists of grants, which are need-based awards that do not have to be repaid. In fact, according to Sallie Mae's report, "How America Pays for College," 56 percent of families benefited from grants in the 2017-2018 academic year.

While college grants are not a magic solution that make all tuition costs disappear, they do help make college possible for many families. According to the National Center for Education Statistics, the average grant amount awarded to students in all types of higher education institutions in 2015-2016 (the most recent statistics available as of December 2018) was $11,810. Those at lower income levels received an average of $13,100.

College grants can help alleviate the burden of student debt, which has gotten increasingly more challenging over the years. According to the Institute for College Access and Success, two in three seniors (65 percent) who graduated from public nonprofit colleges in 2017 had student loan debt. These students had an average of $28,650 per borrower. That's why learning about and applying for grants is so important, since they can ultimately reduce the amount of loans a student has to take.

In fact, there seems to be an inverse correlation between grant awards and student debt. As per the Sallie Mae report, scholarships and grants covered 28 percent of college costs in the 2017-18 academic school year. During the same period, students borrowed less, as student loans covered 14 percent of college costs in 2017-18. This makes sense: if you had a choice between money you had to pay back with interest and money given to you freely as a gift, which would you pick?

Unfortunately, a number of families miss out on grants because they mistakenly believe that they won't qualify and therefore do not apply.

Grants exist to help students with financial need fulfill their college dreams. For many families, even a small grant can make a big difference.

What's the Difference between Scholarships and Grants?

Although many people lump scholarships and grants into the same category and use the terms interchangeably, for the purposes of this Ultimate Guide, we'll define "grants" as awards based on financial need and "scholarships" as merit-based awards. In practice, the difference is murkier -- some scholarships consider financial need and some grants factor in merit. However, as a general rule, grant programs tend to weigh need more heavily.

When it comes to searching for grants, however, keep in mind that many scholarship databases include grants in their listings. This is important to know so that you can explore all the avenues for grants that might be available to you.

Federal Grants

The most notable grants available to students come from the federal government. Federal grants should be the first place to look for grant funding. Unfortunately, a number of families miss out on grants because they mistakenly believe that they won't qualify and therefore do not apply.

It's important to understand that there is not an income cutoff to qualify for financial aid — a fact that comes straight from the U.S. Department of Education blog. Your eligibility for financial aid is based on several factors, which is why everyone is encouraged to apply. Regardless, most states and schools require you to fill out the FAFSA (Free Application for Federal Student Aid), and since that is usually the main document that determines your eligibility for grant programs, applying is a no-brainer. If you have questions about the FAFSA, check out our "Ultimate Guide on the FAFSA" for answers.

Another myth to dispel is that government grants are only for traditional students. Adult students can and should apply for federal financial aid, including grants, and often have just as good a chance at qualifying. Because they are independent and don't have to include their parents' income (many of them are parents themselves with their own dependents), some nontraditional students actually have more financial need than high school seniors.

For all students, especially those who pursue degrees online, it's important to note that in order to be eligible for most grants and all federal financial aid, you must be enrolled at an accredited institution. If you're choosing an online degree program, make sure it's with a reputable college or university.

What Kinds of Federal Grants Are There?

Seeing as everyone can be eligible for financial aid, let's start by examining federal grants. The Department of Education offers four main types of grants. Much like its loans, excluding the Unsubsidized Direct Loans, two of the federal grants are based on demonstrated financial need. The other two are based on a specific career path and family military ties.

Every year, more than nine million students qualify for the federal Pell Grant. This grant can be used at any accredited four-year school, two-year school, community college, vocational training program, professional degree or certification program in the United States and in several locations abroad. The maximum amount of the Pell Grant students can receive changes each year. For the 2018-19 school year, the maximum amount was set at $6,095.

To qualify for a Pell Grant — or any other federal grants, loans or work-study jobs for that matter — students need to be a U.S. citizen or permanent resident, have a valid Social Security number and be enrolled at least half-time in an accredited education program. The Pell Grant is reserved strictly for undergrads pursuing their first degree — grad students and those headed back to campus for a second bachelor's, associate or professional degree aren't eligible — and it's available for up to 12 semesters (about six years) to students of any age.

Pell Grants are awarded based on demonstrated financial need, but that doesn't always mean those with the lowest income. Low-income students are certainly the most eligible for Pell awards, but middle-income families may qualify if their college expenses or family sizes are high. Even if you haven't officially applied for federal financial aid, you can get an idea of whether you qualify for the Pell Grant as well as other government aid programs by using the Department of Education's FAFSA4Caster tool. Many students qualify for the full grant amount, but some students with lower financial need or reduced college costs may only qualify for a partial grant.

The FSEOG program is funded by the federal government, but it's administered by the financial aid offices of individual colleges, and not every school in the country participates. The grant is meant for undergraduate students with "exceptional financial need," according to StudentAid.gov, and the award varies between $100 and $4,000 per student. Schools have a limited amount of money available in their FSEOG funds, so filling out the FAFSA as early as possible is a good strategy if you think you might qualify.

The cleverly named TEACH Grant, which stands for Teacher Education Assistance for College and Higher Education Grants, provides up to $4,000 a year for eligible students who are intending to become teachers. In order to get the money, recipients have to sign an agreement promising to teach in a high-need field (like math, science or special education) in a low-income area for a period of at least four years, within eight years of graduation. If they don't meet their obligations, the TEACH Grant turns into a Direct Unsubsidized Loan and must be paid back.

You must also be enrolled as a student at a school that participates in the TEACH Grant Program. Contact the financial aid office at your prospective schools to determine if their programs are eligible.

To be eligible for this grant, students must have a parent or guardian who died as a result of military service in Iraq or Afghanistan after September 11, 2001. At the time of their parent or guardian's death, they must also have been either a part-time college student or less than 24 years old. Students must also meet all of the requirements to receive a Pell Grant, with the exception of the one based on Expected Family Contribution. The award amount is equal to the amount of a maximum Federal Pell Grant for the award year ($6,095 for 2018-19), but cannot exceed your cost of attendance.

State Grants

In addition to grants from the federal government, individual states also have student grants, though the funding amounts and eligibility vary by state. On the plus side, far more state financial aid offices have state-specific grants available than have state-specific loans. The National Association of Student Financial Aid Administrators (NASFAA) has a map that takes users to the individual websites for each state's department of higher education or financial aid. You can also check with your individual college to find out which state grants you might be eligible for and, of those, which can be applied to online education.

In many cases, these financial aid options are listed under the name "scholarship," but because they are primarily need-based and not distributed based on merit, for this guide, they'll be classified as grants. As an example of some of the types of grants out there, here are awards offered by various states:

Grants in Alabama

Alabama residents who are enrolled at least half time as undergraduates at certain schools are eligible for the Alabama Student Assistance Program (ASAP), which provides financial aid for needy students. Although the Alabama Student Grant Program is not based on need, it still may be helpful for Alabama students looking for financial assistance. On the other hand, the CollegeCounts Scholarship considers both need and merit when awarding scholarships, so it may be a good option for students looking for need-based awards.

If you want to learn more about these grants and other financial aid options, read about financial aid in Alabama.

Grants in Arizona

The AzLEAP and the Arizona College Access Aid Program are two state-sponsored grants designed to help low-income Arizona students afford college.

If you want to learn more about these grants and other financial aid options, read about financial aid in Arizona.

Grants in California

There are multiple types of Cal Grants, which help cover tuition for those studying in the University of California or the California State University systems. While some of these grants are need-based, others take merit into account. The Chafee Grant for Foster Youth provides college assistance to students who were in the foster care system.

If you want to learn more about these grants and other financial aid options, read about financial aid in California.

Grants in Delaware

There are four need-based grants offered from the Delaware Department of Education:

If you want to learn more about these grants and other financial aid options, read about financial aid in Delaware.

Grants in Florida

The Sunshine State offers several different need-based grants for students. The Access to Better Learning and Education (ABLE) Grant is for full-time Florida students who are eligible for state financial aid. The First Generation Matching Grant program aims to help undergraduates whose parents do not hold college or advanced degrees. In addition to financial need, students receiving the William L. Boyd IV Florida Resident Access Grant must meet a minimum GPA requirement. The Florida Student Assistance Grant program is designed for Florida undergraduates who are enrolled at least half-time.

If you want to learn more about these grants and other financial aid options, read about financial aid in Florida.

Grants in Georgia

The Georgia Tuition Equalization Grant program is not need-based, but it provides financial aid assistance for some Georgia students. The Georgia Public Safety Memorial (GPSM) Grant program is designed to help children of Georgia Public Safety Officers who were injured or killed.

If you want to learn more about these grants and other financial aid options, read about financial aid in Georgia.

Grants in Illinois

The Grant Program for Dependents of Police or Fire Officers and the Grant Program for Dependents of Correctional Officers provides grants for children of police officers, fire officers and correctional officers who died or were disabled while on the job. On the other hand, the ISAC Monetary Award Program (MAP) gives financial aid to a wider range of financially-needy Illinois students.

If you want to learn more about these grants and other financial aid options, read about financial aid in Illinois.

Grants in Indiana

In addition to other state financial aid programs, Indiana offers two need-based grants, both of which require a FAFSA to be filed.

If you want to learn more about these grants and other financial aid options, read about financial aid in Indiana.

Grants in Maryland

The Howard P. Rawlings Guaranteed Access Grant and the Howard P. Rawlings Educational Assistance Grant provide grants to high school seniors and undergraduate students in Maryland. The Jack F. Tolbert Memorial Student Grant program is designed specifically for those attending a private career college.

If you want to learn more about these grants and other financial aid options, read about financial aid in Maryland.

Grants in Michigan

Michigan has two major grant programs that help low-income students cover the costs of their tuition: the Michigan Tuition Grant and the Tuition Incentive Program.

If you want to learn more about these grants and other financial aid options, read about financial aid in Michigan.

Grants in Minnesota

The need-based grant programs in Minnesota include the following:

If you want to learn more about these grants and other financial aid options, read about financial aid in Minnesota.

Grants in New York

New York offers its residents an array of grant opportunities, most notably through its TAP program, which is designed to give aid to students in financial need. The Aid for Part-time Study (APTS) is a grant program for part-time students in the state. Those attending independent schools in New York may qualify for the NYS Educational Opportunity Program if they also need academic assistance.

If you want to learn more about these grants and other financial aid options, read about financial aid in New York.

Grants in North Carolina

There are need-based grants for students attending both public and private schools in North Carolina, and with one exception, all awards require students to be residents of the state.

If you want to learn more about these grants and other financial aid options, read about financial aid in North Carolina.

Grants in Ohio

The major grant program in Ohio is the Ohio College Opportunity Grant (OCOG), which is designed for the students with the highest financial need in the state.

If you want to learn more about this grant and other financial aid options, read about financial aid in Ohio.

Grants in Oklahoma

There are two primary need-based grants for students in Oklahoma, and both require a FAFSA to be on file to be considered.

If you want to learn more about these grants and other financial aid options, read about financial aid in Oklahoma.

Grants in Pennsylvania

The Pennsylvania State Grant Program is a need-based grant for Pennsylvania residents. For students who have already received scholarship awards, the PATH Program Grant may provide a matching award. The Pennsylvania National Guard Education Assistance Program is designed for Pennsylvania students who served in the Pennsylvania National Guard.

If you want to learn more about these grants and other financial aid options, read about financial aid in Pennsylvania.

Grants in South Carolina

Several prominent grants are available to South Carolina residents including the South Carolina Need-Based Grants, the South Carolina Tuition Grants and the Lottery Tuition Assistance Program (LTAP).

If you want to learn more about these grants and other financial aid options, read about financial aid in South Carolina.

Grants in Tennessee

While the Tennessee Student Assistance Award is solely a need-based grant, the Tennessee HOPE Access Grant also considers each student’s academic merit. The Dual Enrollment Grant was created for students who are taking college courses while still in high school.

If you want to learn more about these grants and other financial aid options, read about financial aid in Tennessee.

Grants in Texas

Texas, known for its size, is also big on helping its students with large grants for college. The Texas Educational Opportunity Grant is designed for students attending two-year schools. Texas students attending a four-year school may benefit from the TEXAS (Towards Excellence, Access and Success) Grant program. The Tuition Equalization Grant program helps Texas students who are enrolled in private, nonprofit schools in the state. Students who have registered for the Selective Services should look into the Texas Public Education Grant.

If you want to learn more about these grants and other financial aid options, read about financial aid in Texas.

Grants in Virginia

The Virginia Commonwealth Award is a prominent Virginia grant for students who demonstrate financial need. The Tuition Assistance Grant program is designed specifically for students enrolled in a private, nonprofit college in the state. Most commonly available at community colleges, the Workforce Credential Grant helps students who are pursuing an education in certain fields.

If you want to learn more about these grants and other financial aid options, read about financial aid in Virginia.

School Grants

Individual institutions might also have grants that you can take advantage of. When considering which online college makes the most sense to attend, it's well worth checking out which schools have grants offered.

The tricky part is that grant offerings can vary wildly from school to school. This means it’s difficult to know what grants you might be eligible for until you know which online college you plan to attend, or at least which schools you plan to apply to. Go down your list and contact the individual offices of financial aid to determine what a school's offerings are, whether you might qualify and, if so, what information you might need to submit to be considered for the awards.

Here are a couple of examples of institutional grants at schools that have both campus and online degree programs:

Private Grants

Much like scholarships, the number of grants available from private organizations can be astonishing, but in many cases, scholarship database searches can be used to locate grants as well. For instance, the College Board has an option on its scholarship search to select only awards that are based on demonstrated financial need — in other words, grants.

In addition, searching for grants that specifically target your demographic can be a helpful way to narrow down the list. Aside from demonstrated financial need, students can potentially qualify for grants that are targeted toward a specific group, such as one of these:

These aren't the only possibilities, however, so if you think you might qualify for a college grant based on your personal history, do some research. As always, before you apply make sure that the grants you're interested in can be applied to online degree programs.

An example of a private grant is the Soroptimist Live Your Dream Award. As of December 2018, this grant awards eligible women amounts ranging from less than $1,000 to $16,000. The program is for women who provide the primary support for their households, demonstrate financial need, and are enrolled in or accepted to a vocational/skills training program or an undergraduate degree program.

Grants for Graduate Students

If you've already earned a bachelor's degree, your grant opportunities may change. Most students pursuing additional education -- with some exceptions, such as those returning to school for a teaching credential -- are considered graduate students.

Grants for grad students work in much the same way as grants for undergrads. You still fill out the FAFSA for federal aid although you no longer have to include your parents' financial information. While graduate students aren't eligible for the Pell Grant, they can still receive the TEACH Grant and there are special Direct PLUS Loans for graduate students. Federal grants for graduate school also include Fulbright Grants for international study.

Grants for grad school are also offered by states, schools and private organizations. For instance, The California State University System offers the State University Grant to income-eligible graduate students, and the American Association of University Women has a Career Development Grant for those who already have a bachelor's degree.

How to Find Grants

Finding a grant starts with assessing your own situation to determine your financial need and then doing some research to discover opportunities for which you might be eligible.

Make a list of some of your personal attributes, your field of study, and other traits that you might be able to use to find grants that are appropriate for you. For instance, if you are a nontraditional, adult student who is a single parent, that could be criteria for a grant program. You might find some that are specific to people studying science or journalism. Other grants are designed for those with a military background, a disability or some form of longterm illness.

Search for general grants (federal and state), as well as those that are geared toward your attributes and those given by schools you may be interested in attending. You can start by using online grant search databases (just use a scholarship database, and specify that you are seeking need-based awards). Or, simply perform searches in your browser — consider phrases like "STEM grants," "college grants in Ohio," or "college grants for women and minorities."

Because grants are based on financial need, remember that you must have a completed FAFSA to apply for most, and doing so sooner rather than later can help your odds of benefiting from a grant program. That's because many grants are given out until funds are depleted, so earlier applicants have an advantage.

It's worth repeating that since filling out the FAFSA is required to qualify for grants, federal loans and some scholarships, there is no step more important when it comes to paying for college.

As a prospective online student, as long as you choose an accredited college or university, you are entitled to the same grant opportunities as students who attend in person. There could be some schools or state grants that have a residency requirement, but when in doubt, ask. It's always best to contact a grant provider or school if you think you might be eligible, rather than make an assumption and not apply.

4 Tips on Applying for Grants

Applying for grants is really all about paying attention to detail. Here's some tips on how to apply:

  • Fill out applications on time and without errors. This is usually the best way to ensure that your paperwork is in order.
  • Be accurate. It's important that the information you provide on your FAFSA is correct, since grants will look at your financial situation based on the data you include.
  • Include all requested materials. Be sure to include any additional materials that are requested, since some grants may also use other factors beyond need to narrow down the applicant pool.
  • Ask questions. Especially for online students, it's important to take the initiative to ask questions if you're unsure of something. For institutional grants, contact the school's financial aid office. For private grants, find the contact page on the website for ways to get in touch.

Grant Application Tips from College Financial Aid Experts

For students who are applying for Pell Grants, it's a good idea to have a game plan as to how to maximize your award. We asked four experts working in financial aid and enrollment offices at major universities for their Pell Grant advice. Here's what they had to say:

Delisa F. Falks

Delisa F. Falks
Executive Director of Scholarships and Financial Aid
Texas A&M University

“Pell Grants are going to apply directly to a student's charges the university has assessed, typically they will pay directly toward the tuition for the student.”

Billie Jo Hamilton

Billie Jo Hamilton
Director of University Scholarships & Financial Aid Services
University of South Florida

“The most important way to make the best use of any type of financial aid is to complete all of the classes that you enroll in, and only enroll in the classes you need to get your degree. The less time you spend in school the less cost you incur, plus you are earning paycheck once you have your degree!”

Ryan C. Williams

Ryan C. Williams
Associate Vice President of Enrollment Management
Syracuse University

“The Federal Pell Grant Program provides need-based grants to low-income undergraduate students. Students who wish to apply for the Federal Pell Grant must complete a Free Application for Federal Aid (FAFSA) each year. The Pell Grant funds can be applied towards tuition, room, board and other related education expenses. It is recommended the students utilize the Pell Grant towards tuition and housing related costs before personal or miscellaneous expenses.”

Terry M. Micks

Terry M. Micks
Loan Programs Coordinator
University of Wisconsin-La Crosse

“Pell Grants are best used if applied directly to your tuition. Reducing the amount of tuition that you owe will free up funds for housing, food and miscellaneous items.”

Are Grants Taxed?

As with scholarships, the answer to this question is entirely dependent on how the grant is used, not where it came from. Even federal financial aid, such as Pell Grants, can be subject to taxes if it's not used for qualified educational expenses. The two conditions that need to be satisfied are the following:

When in doubt, ask the organization that provided the grant or ask your college's financial aid office if the way you used your funds maintains their tax-exempt status. But if your grant money went straight to your university to pay your tuition and fees, you should be in the clear.

Additional Resources

If you need more information beyond what's provided in this guide, there are several great financial aid resources that can be used to find out more about grants, loans and scholarships. These include the following:

As you embark on your journey toward an online degree, it's important to utilize all of the financial aid that is available to you. Grants, if you qualify, are perhaps the best kind of aid since they do not need to be repaid and usually have no strings attached.

When added to your overall financial aid package, along with scholarships, loans, and other sources of funding, you'll be much closer to your college dreams than you when you first looked at the tuition price.


To get a better sense of the big picture of how financial aid can affect your college decision, refer to our other Ultimate Guides for additional information:

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