Personal Finance
Grant
Grant summary:
Grants are typically free money that you don’t have to pay back
You can apply for grants from many sources
Alternatives to grants include assistance programs and loans.
Grant Definition and Meaning
A grant is money given to cover a specific need. Most grants are nonrepayable, meaning you don’t have to pay the money back. Unlike a loan, there’s no interest or repayment period.
Real-Life Examples of Grants
The federal government offers education and housing grants.
Pell Grant: Undergraduate students can apply for financial aid through the Free Application for Federal Student Aid (FAFSA). For the 2024-2025 school year, the maximum Pell Grant was $7,395.
USDA Rural Development Housing Repair Grants: Low-income rural residents can receive up to $10,000 for housing repairs. You can apply through local USDA offices or organizations.
Types of Grants
Government (federal, state, and local) and private grants are the main grant types.
Government grants can, among other things, cover college costs, provide disaster assistance, or support small businesses. You can apply for government grants through physical offices or on websites like USA.gov, which makes benefits easy to find.
Pro tip: Scammers often pose as government programs that offer credit card relief grants. But there are no federal grants for paying your credit card bill. Real credit relief options include negotiating with creditors, debt consolidation, and debt settlement.
Private grants are offered by organizations that are not government-owned. These grants support the arts, scientific research, agriculture, and many other things. There are thousands of private grants, and no central place to find them all. Research is required to uncover them.
Alternatives to Grants
There are good alternatives to grants, which can be difficult to snag.
Government assistance programs: Many government assistance programs are listed at USA.gov, including food stamps. Some depend on your income level. Others may be for people in specific circumstances, such as those experiencing disability, death of a loved one, or who are retiring.
Loans: You could apply for loans to consolidate debt or fund projects.
Nonprofit assistance: Feeding America, for example, gives free emergency food assistance. Nonprofits are often local, and requirements vary.
Crowdfunding: It’s possible to raise free money through crowdfunding platforms like GoFundMe.
Negotiating with creditors: If you’re looking for a way out of your debt, one option is to negotiate with creditors and ask them to accept less than the full amount you owe (but consider it payment in full). Debt settlement could significantly reduce your debt.
Scholarships: Scholarships are free money that you don’t have to pay back. Some are based on your performance or accomplishments, and some are based on need.
Alternative | Depends on | Requires Repayment? | Potential Result |
Government Assistance Programs | Income or specific needs | No | Immediate relief, no debt |
Loans | Credit | Yes, with interest | Could relieve budget strain, but doesn’t reduce debt |
Non-Profit Assistance | Need, sometimes location | No | Limited by availability, helps specific needs |
Crowdfunding | Public response | No | Takes time, hard to predict response |
Debt settlement | Negotiations | No (if settled) | Reduces debt burden rather than providing money |
Scholarships/Fellowships | Competition | No | Depends on performance and/or need |
Grant FAQs
Are there government grants for business debt relief?
No. Most people and companies won't be able to find a government grant to repay their debt, but you can take advantage of options to help you deal proactively with your debt. For example, the SBA offers loans with affordable interest rates that you could use to refinance costlier loans.
Can disabled veterans get their credit card debt forgiven?
Often, yes. Having a valid reason for not being able to repay your debt is key to convincing a credit card company to forgive part of your debt. Being disabled as a result of your military service is a solid reason.
Who should choose debt settlement?
Debt settlement differs from debt consolidation. With debt settlement, the debt management company negotiates with your creditors to reduce the amount you owe. However, creditors aren't required to negotiate with debt settlement companies.
Some debt settlement companies encourage clients to stop paying their credit card bills. If you do that, you'll be charged late fees, interest, and other charges. Those charges could eat up any savings the consolidation would have given you.
If your debt is truly overwhelming, consider debt settlement. Deb consolidation is usually a better option, even if you owe a fair amount. Debt settlement can negatively impact your credit report and credit score.
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