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Free money for college comes in two kinds. Grants usually come from the government or your school and are based on need. Scholarships come from schools, employers, nonprofits, communities and others, and can be based on merit, need or who you are. Neither usually has to be repaid. The biggest federal grant, the Pell Grant, is up to $7,395 for 2026–27, and you apply for it with the free FAFSA (StudentAid.gov).
Federal grant amounts for 2026–27 · checked Oct. 25, 2026
| Grant | Who can get it | How much |
|---|---|---|
| Federal Pell Grant | Undergraduates with exceptional financial need and no bachelor's or graduate degree (some exceptions) | Up to $7,395 for 2026–27 (July 1, 2026 – June 30, 2027). Every eligible student gets it; it doesn't run out. |
| FSEOG (Federal Supplemental Educational Opportunity Grant) | Undergraduates with exceptional financial need, at schools that take part (not all do) | $100 to $4,000 a year. Each school gets a fixed amount and stops when it runs out, so file the FAFSA early. |
| TEACH Grant | Students in a school's TEACH-eligible program who will teach a high-need subject (math, science, special education, others) at a low-income school; usually a 3.25 GPA or a test score above the 75th percentile | Up to $3,772 a year ($4,000 minus the 5.70% federal sequester cut, through Sept. 30, 2027). If you don't teach 4 years within 8 years, it turns into a loan with interest back to day one. |
All three start with the free FAFSA. If a parent died while serving on active duty in the armed forces or as a public safety officer, you may get the maximum Pell Grant. Pell is limited to 12 full-time terms (about 6 years), and some students can get up to 150% of their yearly award by attending an extra term. States and colleges also use your FAFSA to hand out their own grants, often with earlier deadlines: see every state's 2027–28 FAFSA deadline.
Sources: StudentAid.gov grants, Pell Grants, FSEOG, TEACH Grants, FSA announcement GENERAL-26-28.
Some scholarship deadlines come as early as a year before college starts, so high school students should start looking the summer between junior and senior year. Missed it? Many awards are still open.
Source: Federal Student Aid: Finding and Applying for Scholarships.
All your aid together can't be more than your school's cost of attendance. Tell your financial aid office about every outside scholarship; it subtracts the award from your cost of attendance and from other aid (such as loans) you were offered. Money can go to the school (applied to tuition and fees, with anything left paid to you) or come to you as a check; ask the provider which. If you get federal grants and later owe some back (for example you withdrew early), you have 45 days to repay or set up a payment plan, or you lose further federal aid.
Sources: Federal Student Aid: Finding and Applying for Scholarships; StudentAid.gov grants (repayment).
Tick anything the offer, caller or seminar says. The first seven come straight from the FTC's and Education Department's scam lists.
Sources: FTC: How To Avoid Scholarship and Financial Aid Scams; Federal Student Aid: Avoiding Student Aid Scams. Report a scam at ReportFraud.ftc.gov.
A scholarship or grant (including Pell) is tax-free only if you're working toward a degree at an eligible school, and only up to your qualified education expenses: tuition and required fees, plus books, supplies and equipment your courses require of every student. Room and board, travel, research and optional equipment don't count. Money paid for teaching, research or other required work is taxable, except under the National Health Service Corps, the Armed Forces Health Professions program, or a work college program.
Same steps as IRS Publication 970 (2025), Worksheet 1-1. IRS example: a $2,500 scholarship with $1,000 paid for required teaching-assistant work and at least $1,500 of qualified expenses gives $1,500 tax-free and $1,000 taxable. Including some aid in income can sometimes raise an education credit (see Pub. 970, chapters 2 and 3). Arithmetic only, not tax advice.
Sources: IRS Publication 970 (2025), Tax Benefits for Education, chapter 1 and Worksheet 1-1; 26 U.S.C. § 117: Qualified scholarships.
Facts and arithmetic, not advice. We republish Education Department, Labor Department, FTC and IRS rules with dates. Your school decides your aid package. No partner links on this page.
Usually not. Scholarships are gifts. Federal grants generally don't have to be repaid, but you may owe part back if you withdraw early, drop to part-time, get outside aid that lowers your need, or don't finish a TEACH Grant's teaching service (then it becomes a loan). If your school says you owe, you have 45 days to repay or set up a payment arrangement.
Only part of them, sometimes. IRS Publication 970 says a scholarship is tax-free only if you're a degree candidate and only up to your tuition, required fees, and required books, supplies and equipment. Money used for room and board or travel, or paid for required teaching or research, is taxable. Pell Grants follow the same rules.
You never have to pay to find or apply for scholarships. The Labor Department's free Scholarship Finder lists more than 9,500 awards, and your school's aid office, a counselor and your state grant agency are free too. The FTC says offers that guarantee a scholarship, charge a processing fee or ask for your bank account to hold an award are scams.
It can. All your aid together can't be more than your school's cost of attendance, so you must tell the aid office about outside scholarships. The school then subtracts it, often from loans first, but ask your school how it handles it.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.