Grants are a form of gift aid, money that does not need to be repaid. Unlike scholarships, which are mostly awarded based on merit, grants are usually awarded based on demonstrated financial need. Grants are awarded by the federal government, state governments and colleges and universities.
The Federal Supplemental Educational Opportunity Grant (FSEOG) program provides almost $1 billion in need-based grant funding to more than 1.5 million recipients each year. Priority is given to Federal Pell Grant recipients who have exceptional financial need.
The Teacher Education Assistance for College and Higher Education Grant (TEACH Grant) provides $4,000 per year to undergraduate and graduate students who wish to pursue careers in teaching. This grant is more accurately described as a forgivable loan. Approximately $100 million is awarded each year to about 35,000 recipients.