A grant differs from a loan in one basic way: it’s free money given to you because you fall into a certain category, have earned it through work, or someone wants to support you in your work.

A grant is most often awarded based on financial need and other factors. Grants are based on need, merit, field/work specific, athletics, housing, minority based, educational, or goal-based. There are tons of grants out there you can look at to use to pay off your loan.

First, you can work off your debt; a form of a grant that gets you work experience and some forgiveness, if not outright payoff:

  • Teaching: If you have a federal loan and teach in a low-income area, you may be eligible to have a portion of the loan cancelled. Teaching in inner-city environments, in special education schools, in poverty-stricken areas, or even in third world countries may apply to this program.
  • Dentistry and Medicine: Health care professionals may be able to have their loans forgiven by working with underserved groups or regions. (services.aamc.org) Many non profit organizations can use free or low-cost dental or medical help. This is a great way to use your new skills in a meaningful way while whittling down your debt.
  • Law: Law students who work in public interest or non-profit position may be eligible for government grants to pay off student loans. (equaljusticeworks.org). Also check out the legal support organizations for grants. A law firm may use the debt repayment as an incentive to hire you as well.
  • Public service: The U.S. government offers a loan forgiveness program for employees who have made at least 120 qualifying monthly payments.
  • Volunteering: A number of volunteer programs make you eligible for grants for paying back student loans. These include the AmeriCorps, Peace Corps, and the Volunteers in Service to America.
Grants Loan

Grants Loan

Many Federal programs exist for grants:

  • The Federal Pell Grant – Since 1972 the Federal Pell Grant has been helping students in the United States fund their college educations. More students rely on Pell grants for financial assistance than any other grant program in America.


  • The Federal Supplemental Educational Opportunity Grant – The FSEOG is designed to give financial aid to undergraduate students with extreme financial need. The FSEOG program is funded by the Federal government, and administered through the financial aid offices of participating colleges and universities. Students must apply through their college of choice, and grants are awarded on a first come, first served basis.


  • The Federal TEACH Grant – The TEACH Grant is an example of an award-for-service program. The grant provides Federal funding to students who agree to take up a teaching position in a high need field, or critical shortage facility, following graduation. Recipients must sign a contract agreeing to a predetermined time of service. Students who fail to fulfill their teaching obligations will have their grant revert to a student loan, and will be responsible for the full repayment, plus interest, of that loan.


There are also state funds for grants. Be sure to check your state’s web pages for opportunities for states to give you money to pay back your student loans.