
Grants allow private entities, such as individuals and businesses, to fund initiatives and ideas that may have not been previously possible due to financial limitations. The federal government often provides grants to small businesses and non-profit organizations. A prime example of this is New York City’s initiative to provide grants to restaurants to allow their businesses to keep afloat during the Covid-19 pandemic.
Types of Grants
There are three common types of grants awarded to private entities by the United States government: discretionary grants, student loans, and formula grants. Other grants include pell grants, FSEOG, service grants, competitive grants, continuation grants, pass-through grants, and program grants.
Discretionary Grants
Discretionary grants are open to state and local educational agencies, tribal organizations, colleges and universities, non-profit organizations, and community-based organizations. To apply for a discretionary grant, applicants must sign-up for the System for Award Management (or SAM for short) and on grants.gov. New opportunities will be shown and users of the website will be notified.
Student Aid and Pell Grants
Pell grants are grants provided by the U.S. Department of Education to students based on financial need. Unlike student loans issued by major banks, grants do not need to be repaid. The amount issued to each student depends on household income, the cost for the school of choice, and the amount of time spent at school. Each applicant must demonstrate proper financial need, such as belonging to a low-income household. Applicants also must not have received a bachelor’s degree or higher to be eligible. To apply for any student aid or grant, the FAFSA, or the Free Application for Student Aid, must be completed. All student grants are under the discretion of the U.S. Department of Education.
Program Grants
Grants given to certain initiatives and projects are called program grants. Program grants are often referred to as the most restrictive grants, as funds are to be used for specific actions and purposes. Most commonly used by non-profit organizations, program grants are the most prominent form of grant awarded by the U.S. Government.
Grants in an Economy
One of the major benefits of the government providing grants is stimulating the economy, a major factor in the facilitation of the exchange of currency and influx of revenue, as most purchases are taxed. Prominently, stimulus checks are the biggest example of this, as they are technically a form of grant given to households to stimulate the economy during tumultuous times. When applying to colleges, students should opt to applying for financial aid and grants, as every penny counts towards education.
Works Cited
Federal Student Aid. “Grants.” Federal Student Aid, 5 Nov. 2019, studentaid.gov/understand-aid/types/grants.
“Grants 101.” Https://Www.grants.gov/Learn-Grants/Grants-101/Award-Phase.html#:~:Text=The%20final%20award%20decisions%20rest,Financial%20reviews%20of%20the%20applications. Accessed 6 Aug. 2023.
“Grants Overview | U.S. Department of Education.” Www2.Ed.gov, 31 Aug. 2021, www2.ed.gov/fund/grants-apply.html?src=ft.
“State Formula Grants.” Individuals with Disabilities Education Act, sites.ed.gov/idea/state-formula-grants/.
“What Are the 6 Different Types of Grants? We Reveal the Answer!” GrantNews, 19 July 2023, www.grantwatch.com/grantnews/what-are-the-6-different-types-of-grants/#:~:text=The%20most%20popular%20type%20of. Accessed 7 Aug. 2023.
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