How to Get Free Money for College

You can tap into the thousands of scholarships and grants to make college more affordable.

Written by Kat Tretina / February 8, 2022
Reviewed by Mark Kantrowitz

Quick Bites

  • Unlike student loans, “free money,” in the form of grants and scholarships, doesn’t have to be repaid.
  • On average, scholarships and grants cover 25% of students’ costs for undergraduate degrees and certificates.
  • You can qualify for free money from the government, your college, corporations and nonprofit organizations.
  • There is no limit on receiving eligible scholarships or grants: Multiple awards can be combined to offset your education costs.

“College is too expensive.”

“I’ll never be able to afford my child’s dream school.”

“I’ll be repaying student loans forever.”

Sound familiar? There’s no doubt that figuring out how to pay for college can be daunting. While getting a degree can be expensive, there is a way to reduce costs: Apply for as much free money as you can.

While 86% of students receive some form of financial aid, free money—also known as gift aid—is more difficult to find.[1] But with a little extra work, you can get free money to pay for college.

Inside this article

  1. What is free money?
  2. When to start applying
  3. Get started on your search
  4. Things to watch out for

What is free money?

When you hear about free money for college, people are referring to gift aid. It usually comes in the form of scholarships and grants. Unlike student loans that have to be repaid with interest, gift aid does not have to be repaid if you meet the award’s requirements.

According to “How America Pays for College,” a study by Sallie Mae, scholarships and grants cover 25% of students’ education costs. On average, the amount of gift aid totals $9,065 per student. That’s almost ten grand less per year that you’d have to borrow in student loans, reducing your total debt.

Despite this opportunity, 44% of families did not use scholarships to help pay for the 2020-2021 academic year; of these families, only 22% said their college-bound student even applied. Why the untapped potential? It mainly comes down to lack of awareness and understanding about gift aid and the application process.[2] Below are two of the biggest opportunities for free money for college:


Scholarships can come from many different sources, including your college, as well as nonprofit organizations. They’re usually awarded based on merit, such as outstanding athletic or academic achievements.

Scholarships can range in value from small awards that pay for your supplies to large opportunities that cover the full cost of tuition. Some examples are:

Helping Hands Book Scholarship: This scholarship gives students up to $1,000 to pay for their textbooks. Awards are issued based on merit, academic achievements, career potential and past performance.

The Gates Scholarship: This is intended to cover the remaining cost of attendance after deducting your other financial aid. The award will cover up to 100% of the remaining cost, including your room and board, transportation and other fees. The scholarship is for low-income students who belong to certain minority groups; students must be in the top 10% of their class and demonstrate leadership abilities to qualify.


Grants are issued by federal and state government agencies, colleges, corporations and nonprofit organizations. They are usually awarded based on your financial need.[3] Some examples are:

Pell Grants: Federal Pell Grants are for undergraduate students with exceptional financial needs. If you qualify for a Pell Grant, you can receive up to $6,495 per year to pay for your education expenses.

Washington College Grant: This grant is awarded by Washington state. Students who meet the program’s income restrictions can receive an award that covers up to the full cost of tuition.

Tip: When applying for gift aid, pay attention to the program terms. Some grants, such as TEACH Grants for those going to school to become teachers, are converted into student loans if you don’t meet the program requirements.

When to apply

There’s no limit on receiving eligible scholarships or grants: You can combine multiple awards to offset your education costs, and you can start applying earlier than you think.

“Apply to as many as possible,” says T. Jack Wang, a college financial aid strategist with Innovative Advisory Group. And, doing the extra work now can pay off over the long term. “[You] can start as early as freshman year of high school. Fewer scholarships exist that year, but they do exist,” he continues. “And more [aid] becomes available each year through high school.“

Your efforts don’t have to stop in high school: “Many outside scholarships are still available to those already in college,” says Wang, which can be a big missed opportunity.

There are thousands of scholarships and grants available, so you likely qualify for some of them. And, if you keep at it consistently, you may be able to avoid debt entirely by utilizing free money to pay for school instead.

Things to watch out for

While utilizing gift aid seems like a no-brainer for getting financial help for your education, there are a few things to watch out for, namely taxes and scams:


You may have to pay taxes on the scholarships and grants you get, depending on how you use the money.

Gift aid is tax-free under the following conditions:

  • You’re pursuing a degree at an accredited college.

  • You use the scholarship or grant to pay for school-required tuition, fees, books or equipment.

Gift aid is not tax-free in this situation:

  • If you’re using it to pay for incidental expenses, including room and board or travel, the amount of the award—or the portion used to cover those costs—must be included in your gross income when you submit your tax return.[4]


Unfortunately, scammers prey on students and families looking for gift aid to pay for college. There are many scholarship and financial aid scams and less-than-ideal sites out there, so it’s important to know what to look out for before handing over your personal information or credit card details. Here are some red flags:

  • You are required to pay a fee: Legitimate organizations that offer scholarships or grants never charge fees. If you find a scholarship that requires you to pay a processing fee, redemption fee or membership fee, that’s a strong indication it’s a scam.

  • Promises to help you qualify for additional aid: Some companies say they can help you qualify for additional federal grants or work-study programs. They’ll submit the FAFSA on your behalf, but they may adjust your information so you qualify for more aid. The problem? They charge fees for what you can do on your own, and submitting false information on the FAFSA can lead to severe fines and other penalties.

  • You feel pressured to act: Some scammers will hold in-person seminars or use high-pressure sales tactics to convince you to give them your personal information right away. If a company discourages you from taking time to do your research, stay away![5]

Article Sources
  1. “Financial Aid,” National Center for Education Statistics,
  2. “2021: How America Pays for College,” Sallie Mae,
  3. “Types of Aid,” Office of Federal Student Aid,
  4. “Topic No. 421: Scholarships, Fellowship Grants, and Other Grants,” IRS,
  5. “How to Avoid Scholarship and Financial Aid Scams,” Federal Trade Commission,

About the Authors

Kat Tretina

Kat Tretina

Kat is dedicated to teaching people how to pay down debt, boost their incomes and reduce financial stress. Her work has been published by Reader's Digest, The Huffington Post, Forbes Advisor and more.

Full bio
Mark Kantrowitz

Mark Kantrowitz

Mark Kantrowitz is a nationally-recognized expert on student financial aid, the FAFSA, scholarships, 529 plans and student loans. His mission is to deliver practical information, advice and tools to students and their families so they can make smarter, more informed decisions.

Full bio

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