How Private Grants Work

The most significant difference between a private educational grant and a student loan is you don't have to pay a grant back. Once awarded a grant, you accept it with the understanding that you aren't responsible for paying any of the money back to the grantor.

Private grants differ from government grants such as state-funded or Pell grants in that the money comes from private individuals or organizations. The Pell Grant is a popular federal funding option but is often hard to obtain because only those with the greatest financial need qualify. For young students still considered dependents of their parents, the Pell Grant takes the parents' income into consideration, which tends to hurt the students' chances of qualifying for the grant. That's where private grants come into play.

Private grants have no public or government affiliation. Because of this, the requirements can be tailored specifically to whatever the private organization deems appropriate. Private grants come from social clubs such as Rotary, Kiwanis and Lions, alumni, nonprofits and private companies, and businesses.

Businesses in particular offer private grants to people of various ethnic groups in an effort to promote diversity. But there are all kinds of grants available -- in fact, you can find grants for all types of people. Here are some examples:

This list encompasses some specific areas. But let's say you don't meet any of these criteria. That's when you need to dig to find something you may qualify for. The next section gives you some ideas for places you can find private grants. You'll find, like most things, you'll be rewarded by your efforts.

The easiest way to find private grants is to first determine what you're looking for. In other words, if you're planning to study to become a journalist, you can search professional organizations offering grants for aspiring journalists or journalism students. Joining professional organizations can often lead to grant opportunities. Networking with professionals and fellow students can open doors you never knew existed. Web sites such as FastWeb are a place to search for grants and scholarships based on demographic and personal information.

A good place to start is at your school office of student or financial aid. While it's not a rule, filling out the Free Application for Federal Student Aid (FAFSA) is usually the starting point for finding college funding options. From there, businesses and private organizations work closely with financial aid offices in universities. Each school has qualified staff that focuses solely on helping students find money.

Not all private grants will be listed at your university, though. This is where the hard work comes in. Just like searching in a specific field, you can contact businesses, clubs and organizations directly to see if they have anything you might qualify for. For instance, a company like Coca-Cola may have grant money set aside for qualified students. You would have to dig until you find it, and that's the key. Private grants aren't going to fill your e-mail inbox. You need to get creative and stick with your search.

Whenever you're looking for grant money, you should always apply for everything you can. This includes federal and state financial aid. You'll get a good idea of where you stand financially and might even secure some money. From there, you can go and look for private money. But just because you're awarded a grant doesn't mean you should accept it. Make sure you understand any conditions attached to each grant. You never know what a grant may require you to do or what conditions you might need to meet. They could be as simple as maintaining a certain grade point average. A private grant can ask you to do all sorts of things including commitment stipulations. Don't be surprised if you find a company offering to pay your entire college tuition in exchange for your employment once you graduate.

For more information about grants, loans and other financial aid topics, take a look at the links in the next section.