Going to college is expensive. According to the College Board, the total cost of attendance for resident students at public four-year universities was $27,940 in 2022-23, while non-resident students paid an average of $45,250. Students at private nonprofit four-year universities spent even more: nearly $57,600.

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. Here’s what to know.

Scholarships and grants are a type of gift aid (money that doesn’t have to be repaid). They’re the second-largest source of financial aid, covering over 25 percent of students’ college costs.

Key insights

Scholarships and grants are a type of gift aid (money that doesn’t have to be repaid). They’re the second-largest source of financial aid, covering over 25 percent of students’ college costs.

Scholarships statistics

  • Scholarships, in combination with grants, were the second-largest source of financial aid in 2021-22, covering an average of 26 percent of students’ college costs.
  • The average scholarship award was $6,041 in 2022 — a 22 percent decrease from last year.
  • During the 2021-22 academic year, 60 percent of American families used scholarships to pay for college.
  • Among households who did not use scholarships to pay for college in 2021-22, roughly one-third applied.
  • Among those who used scholarships in 2022, 62 percent said they obtained them from their college or university.
  • The average institutional scholarship award is $6,335.
  • About four in 10 scholarship recipients received funds from their state, with an average award of over $2,362.
  • Thirty-seven percent of scholarship recipients received money from private sources, including companies and nonprofit organizations; the amount averaged $2,189.
  • The average white student received $4,250 in scholarships for the 2021-22 academic year, while Black students received an average of $2,303. Hispanic students received the lowest scholarship amount, with an average of $2,259.

Grants statistics

  • In 2021-22, students received a total of $140.6 billion in grant aid.
  • Fifty-five percent of American families reported using grants to help pay for their kids’ college costs during the 2021-22 academic year.
  • Undergraduate students received an average of $10,590 in grants during the 2021-22 academic year — double the amount they received 20 years ago.
  • Graduate students received an average of $9,120 in grant aid, representing a 37 percent increase over the last two decades.
  • Grant aid for both undergraduate and graduate students has risen by 7 percent over the last decade.
  • Out of all types of grants, those provided by institutions have grown the most over the last decade. They totaled $74.4 billion during the 2021-22 academic year, representing a 48 percent increase since 2011-12.
  • More than half of all the grant aid awarded in 2021-22 came from the students’ institutions.
  • Federal grants were the second-largest funding source, accounting for 26 percent of all grants aid in 2021-22.
  • State grants were the smallest funding source, accounting for just 9 percent of all grant aid in 2021-22.
  • During the 2021-22 academic year, 6.2 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, 88 percent of Black students received some form of gift aid in 2015-16, while only 66 percent of Asian students received some form of gift aid.

Likewise, there wasn’t much difference between the percentage of men and women receiving scholarships and grants in 2015-16. Some 73 percent of full-time male students received gift aid, while nearly 80 percent of female students received gift aid.

Source: National Center for Education Statistics

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 2020-21 was $20,385, while the average cost to attend a private nonprofit four-year institution was $43,758.

Students at public institutions — regardless of their income — received an average of $7,813 between scholarships and grants. Meanwhile, students at private institutions received an average of $21,011 in gift aid. That means scholarships and grants helped cover about 38 percent of the costs at public institutions and almost half 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 (2020-21) Average scholarship and grant aid received at private nonprofit four-year institutions (2020-21)
Source: National Center for Education Statistics
$0 to $30,000 $11,386 $26,753
$30,001 to $48,000 $10,445 $27,003
$48,001 to $75,000 $7,561 $25,012
$75,001 to $110,000 $4,392 $22,080
$110,001 and over $2,777 $18,389

How to apply for scholarships

Scholarships fit two main categories: need-based and merit-based. Need-based scholarships are awarded based on your financial need to pay for college. 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.

Universities, the state and nonprofit organizations typically award need-based scholarships. Applying involves filling out the FAFSA. Your school may also require the CSS Profile.

Both forms help your school and other entities determine whether or not to give you additional funding based on your financial circumstances and needs.

Merit-based scholarships, however, require you to do more digging, as private entities and businesses often provide them. You can find hundreds of these using scholarship search engines such as Scholarships.com and Fastweb. Although requirements may vary, they usually include:

  • 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).

Although this can be time-consuming, 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 $6,895 for the 2022-23 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 skyrocketing inflation makes everything more expensive and college tuition prices rise, scholarships and grants may not cover your costs. Federal student loans may not be enough to make up the difference.

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.