Key takeaways

  • Scholarships and grants can help you reduce the cost of college by hundreds and even thousands of dollars.
  • Grants are typically awarded based on financial need, while scholarships can be need- or merit-based.
  • You should exhaust both scholarship and grant aid before turning to student loans, as these don’t need to be repaid.

College is expensive. Full-time resident students at public four-year colleges spend an average of $24,840 per academic year, while non-resident students spend an average of $46,730. Those attending private nonprofit four-year institutions pay even more: an average of $60,420 per academic year.

If you’re looking to reduce your out-of-pocket college costs, scholarships and grants should be your first option. Unlike federal and private student loans, they’re both a type of gift aid, meaning you don’t have to pay them back.

Scholarships statistics

Bankrate insights
  • Scholarships, in combination with grants, were the second-largest source of financial aid during the 2022-23 academic year, covering an average of 29% of students’ college costs.
  • The average scholarship amount per student is $7,822.
  • 61% of American families used scholarships to pay for college in 2022-23.
  • Among households who did not use scholarships to pay for college in 2022-23, roughly a quarter (26%)applied.
  • Among those who used scholarships in 2023, 65% said they obtained them from their college or university.
  • The average institutional scholarship award is $8,005.
  • 37% of scholarship recipients received funds from their state, with an average award a little over $3,330.
  • 35% of scholarship recipients received money from private sources, including companies and nonprofit organizations; the amount averaged $1,968.
  • The average white student received $5,178 in scholarships for the 2022-23 academic year, while Black students received an average of $3,283. Hispanic students received the lowest scholarship amount, with an average of $3,160.

Grants statistics

Bankrate insights
  • 57% of American families reported using grants to help pay for their kids’ college costs during the 2022-23 academic year.
  • In 2022-23, students received a total of $145.3 billion in grant aid.
  • Full-time undergraduate students received an average of $10,680 in grants during the 2021-22 academic year — an 81% increase from 20 years ago.
  • Full-time graduate students received an average of $10,320 in grant aid, representing a 55% increase over the last two decades.
  • Grant aid for postsecondary students has decreased by roughly 4% over the last year.
  • Institutional grants totaled $76.9 billion during the 2022-23 academic year — a 33% increase since 2012-13.
  • More than half of all the grant aid awarded in 2022-23 came from the students’ institutions.
  • Federal grants were the second-largest funding source, accounting for 26%of all grants aid in 2022-23.
  • State grants were the smallest funding source, accounting for just 9% of all grant aid in 2022-23.
  • In 2022-23, 6 million college students were Pell Grant recipients.

Scholarships and grants by recipient

When it comes to scholarships and grants, aid is distributed almost evenly across students from different backgrounds, as shown in the chart below. The most notable difference is between Black and Asian students. According to the National Center for Education Statistics’ most recent figures, 84.8 percent of Black students received some form of gift aid in 2019-20, while only 65.5 percent of Asian students received some form of gift aid.

Likewise, there wasn’t much difference between genders. In 2019-20, some 69 percent of full-time male students received gift aid, while roughly 76 percent and 70 percent of female and nonbinary students received gift aid, respectively.

Scholarships and grants by household income and type of institution

Although private nonprofit four-year institutions are more expensive than attending a four-year public institution, they also offer more grant aid to students.

Data by the National Center for Education Statistics shows that the average cost to attend a public four-year institution in 2021-22 was $21,241, while the average cost to attend a private nonprofit four-year institution was $45,123.

Students at public institutions — regardless of their income — received an average of $8,080 between scholarships and grants. Meanwhile, students at private institutions received an average of $21,718 in gift aid. That means scholarships and grants helped cover about 38 percent of the costs at public institutions and almost half (48 percent) of the costs at private institutions.

Besides that, students with a household income of $48,000 or less tend to get substantially more gift aid at both public and private universities, as shown below.

Household income Average scholarship and grant aid received at public four-year institutions (2021-22) Average scholarship and grant aid received at private nonprofit four-year institutions (2021-22)
$0 to $30,000 $11,994 $27,806
$30,001 to $48,000 $11,029 $28,258
$48,001 to $75,000 $8,240 $25,735
$75,001 to $110,000 $4,876 $22,974
$110,001 and over $3,063 $19,269

Source: National Center for Education Statistics

How to apply for scholarships

Scholarships fall into two main categories: need-based and merit-based, each with its own application process.

Applying for need-based scholarships

Need-based scholarships are awarded based on your financial need to pay for college, and they’re awarded by the state and nonprofit organizations.

To apply for need-based scholarships, you’ll need to fill out the FAFSA. Your school may also require you to complete a CSS Profile. Both of these forms help your school and other entities determine whether you qualify for additional funding based on factors such as your household income and size.

Applying for merit-based scholarships

Merit-based scholarships are those awarded based on recipients excelling at something, such as academics, athletics or arts.

You can also get scholarships by meeting certain criteria, such as majoring in a certain field, being a first-generation student or being a member of the LGBTQ+ community. Likewise, there are scholarships for women, Latino students and many other groups.

You can find these through scholarship search engines such as and Fastweb. To apply, you’ll typically need to provide the following:

  • A written statement.
  • A copy of your resume.
  • Two references.
  • A letter of recommendation from one or more sources.
  • A copy of your transcripts (especially if a certain GPA is required).

You’ll also need to meet the eligibility requirements set by the institution that’s offering it. Although this can be time-consuming, as you have to apply for each one individually, it’s worth it. You could secure thousands of dollars worth of aid just by filling out a form and tracking deadlines.

How to apply for grants

Applying for grants is usually fairly easy. Most of them are need-based, meaning that they’re awarded based on your economic need, and you can get them from the federal, state and local governments, as well as from your university.

The most famous and generous grant available is the Pell Grant, which currently has a maximum award of $7,395 for the 2023-24 academic year. To apply for grants, you typically need only complete the FAFSA and the CSS Profile. Not all schools use the CSS Profile, so check first.

Both forms will ask questions regarding your family size, living situation and household income to determine your eligibility.

What to do if your financial aid package falls short

As college tuition continues to rise, it’s likely that scholarships, grants and federal student loans won’t be enough to cover all the costs.

If your financial aid package falls short, you can use private student loans to bridge the gap. However, unlike federal student loans, private student loans are issued based on credit. It’s important to shop around for lenders and compare quotes before you sign on the dotted line, to ensure you’re getting the best terms and interest rates available for your situation.

If poor credit keeps you from accessing the best rates, you aren’t stuck with a high interest rate forever. You can always refinance your private student loans once your financial situation and credit have improved. Refinancing may make your debt more manageable and save you money on interest.