How Public Grants Work

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There are many ways to pay for an education. You can pay out of pocket, earn a scholarship, secure a student loan, join a work-study program or apply for a grant. Students find scholarships and grants particularly helpful -- they don't require repayment.

A grant is just what it sounds like -- money is granted to the receiving party. Grants can come from different sources. Some companies and organizations have private grant programs, often overseen by a board of directors. But another type is the public grant.

Public grants receive funding from the public through tax dollars. The United States government has 26 agencies in charge of making grants. Not all of these grants are for education. Some are meant to help people secure housing or start a small business. In addition to federal grants, some states have their own grant programs.

The justification for using tax money to help students pay for college is straightforward. By helping citizens further their education, society stands to benefit from their contributions later on.

Many, but not all, grants are need-based. That means only students who fall below a certain income level will be eligible to receive a grant. Some grants, such as the state of Georgia's HOPE grant, don't have a needs-based requirement.