What Personal Grants Are Available and How to Apply

What do you do when you need money but don’t want to take on debt? One answer is to seek a personal grant. The government offers grants to help Americans pay for certain classes of expenses and to make it through tough times. However, these grants come with several qualifications that you must meet. If not, you might find yourself ineligible for some of them. You can also speak with a financial advisor about your larger budget and financial plan.

What Are Personal Grants?

You may have heard of forms of government assistance like small business grants and subsidized healthcare. But did you know that the government offers personal grants for individuals, too? If you meet eligibility requirements for one of the approved expenses with a grant program, you could be in luck. Unlike personal loans, grants don’t need to be paid back. That makes them a powerful tool for those facing financial hardship.

Most government grants are given to institutions like universities, hospitals, and non-profits. There are a few personal grants available at the federal level and a host of other government benefits that don’t need to be repaid. For the context of this article we’ll refer to all government money that doesn’t need to be repaid and is available to individuals as personal grants.

Keep in mind that the government doesn’t offer grants to help Americans pay off consumer debt from things like credit cards. It does, however, offer financial support for Americans struggling with a range of tough financial situations.

When to Seek a Personal Grant

Think of a personal grant as an alternative to two things: doing without and taking on debt. Some grants are designed to help with consumer spending for things like children’s clothes and school supplies. Others are designed to help with long-term investments like a home purchase.

If you’re facing financial strain, consider applying for a grant. Unlike payday loans and installment loans, personal grants won’t leave you with expensive interest payments. You don’t have to pay to apply for government grants, either, so the only things you have to lose are the time and effort it takes to submit the grant applicants.

Don’t expect an instant turnaround, however. Remember that you’re dealing with the government. That means you should expect a certain level of bureaucracy. The process of getting a federal grant to meet your financial needs may not be as fast as going to the payday lender around the corner, but government grants are a much safer option than high-cost loans.

Applying for Personal Grants From the Government

The government focuses its grant-giving energies on certain classes of individuals. For example, veterans and single mothers have better odds of getting a personal grant than young single men with no children and no record of military service. Still, you shouldn’t let fear of rejection keep you from applying for the funds you need.

Let’s talk about how to apply for personal grants. Go to benefits.gov and you’ll be able to start searching for grants and benefits for which you might be eligible. Search all categories or choose one of the following categories:

Child Care/Child Support
Counsel/Counseling
Disability Assistance
Disaster Relief
Education/Training
Employment/Career Development Assistance
Energy Assistance
Environmental Sustainability/Conservation
Food/Nutrition
Grants/Scholarships/Fellowships
HIV/AIDS
Healthcare
Housing
Insurance
Living Assistance
Loan/Loan Repayment
Medicaid/Medicare
Military: Active Duty and Veterans
Social Security/Retirement
Tax Assistance
Volunteer Opportunities

Whether you need help making rent, tackling student loans, or paying your medical bills, the government may have a grant for you. Benefits.gov will take you through a quick onboarding process. The site will prompt you to answer questions about personal details such as your income, marital status, age, employment status, and place of residence.

Once you answer all the questions, you’ll see a list of grants, loans, and temporary assistance programs for which you may be eligible. Then, it’s up to you to apply for the help you need. The application process can take weeks before you get a response so it’s important to be patient and apply as early as possible.

Beware of Fraud When Applying for Personal Grants

You can check your eligibility for government grants on Benefits.gov without paying anyone to search for you.

We’ve told you how easy it is to find government grants online, like first-time home buyer grants, using Benefits.gov. If you have internet access and a little time you can get an answer to the question: “Am I eligible for government grants?” There’s no need to pay someone to search for you.

A quick online search for personal grants will turn up many sites offering to get you federal grant money. If they’re offering help searching for grants from private organizations and non-profits they may be offering a worthwhile service. With government grants, though, there’s really no reason to hire a middleman to find grants for you.

Some good advice is to take the DIY approach to grant applications and stay away from sites that charge a fee for their services. At best, some of these sites are taking money for something you could do yourself, for free.

At worst, some of them may be phishing sites that just want your name, date of birth and Social Security number so they can use them to commit fraud. Don’t be tempted by sites that guarantee they’ll get you money. And if you get unsolicited offers of personal grants by phone, mail, or email they’re not from the government – they’re from fraudsters.

Personal Grants and Taxes

Taxes on personal grants can vary based on the nature and purpose of the grant, as well as the specific tax laws in your jurisdiction. It’s important to understand what your tax liability is going to be before you accept a grant that could require you to pay a bunch of tax you can’t afford. Here is a general overview of how taxes might work for personal grants:

Taxability of Grants

Taxable Grants: Most personal grants are considered taxable income by the IRS unless specifically exempted. This means that you need to include the amount received in your gross income for the year.
Non-Taxable Grants: Some grants are specifically excluded from taxable income, such as certain disaster relief payments or specific types of scholarships.

Reporting the Income

Form 1099-G: If you receive a taxable grant, the grantor may issue a Form 1099-G, which reports the amount of the grant to you and the IRS.
Other Forms: Depending on the nature of the grant, you might receive other forms, such as a Form 1098-T for educational grants.

Exclusions and Exceptions

Disaster Relief: Payments for disaster relief are generally excluded from taxable income if they are made by a qualified government or charity and used for necessary personal, family, living, or funeral expenses.
Scholarships and Fellowships: Certain scholarships and fellowships used for tuition, fees, books, supplies, and equipment required for courses are not taxable.
Qualified Expenses: If the grant is used for specific qualified expenses, such as educational or medical expenses, you might be eligible to claim deductions or credits. For instance, educational grants used for tuition might qualify for education credits.
Business Grants: If the grant is related to a business or self-employment, the expenses paid with the grant may be deductible as business expenses.

If you receive a significant grant, you may need to make estimated tax payments throughout the year to avoid underpayment penalties. This is especially relevant if the grant substantially increases your income. Understanding the specifics of your grant and how it fits into your overall tax picture is crucial, especially if you’re receiving a sizable grant that needs to be accounted for.

You may want to talk to a tax professional to help you see what your tax liability might be for taking a specific amount of money or type of grant.

Alternatives to Personal Grants

Not everyone will qualify for a personal grant, and available funding may be limited. If you are not eligible, there are other legitimate ways to seek financial assistance depending on your circumstances.

Low-interest personal loans from community banks or credit unions may help with short-term expenses. These loans require repayment but can offer lower interest rates than credit cards or payday lenders.

Government assistance programs such as unemployment benefits, housing vouchers, food aid, or energy assistance can also provide relief for essential costs. These programs are typically based on income or household need and do not have to be repaid.

For education-related expenses, scholarships, fellowships and work-study opportunities can reduce costs without creating new debt. Many of these programs are available through schools, nonprofit organizations and private foundations.

Community and nonprofit organizations, including local charities and faith-based groups, may also offer emergency grants or hardship funds for specific situations like rent, utilities, or medical expenses.

When exploring these alternatives, review eligibility criteria carefully and confirm that any program or lender you work with is legitimate and transparent about its terms.

Bottom Line

Personal grants can help you cover expenses without debt if you apply carefully and avoid scams.

Personal grants give recipients an alternative to going without, skipping bills, or taking on debt. If you’re interested, check your eligibility, fill out your applications honestly and thoroughly, and stay away from middlemen offering you guaranteed free money. If used correctly, the introduction of personal grants into your financial life can have a largely positive effect. They can get you on the right track to managing your money for both the present and future.

Tips for Managing Your Finances

To ensure you can retire and achieve your other financial goals, you need to be in control of your finances. A financial advisor can help with this. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you’re not ready to work with an advisor, creating a stringent budget is a good first step toward mastering your finances. SmartAsset’s budget calculator can help you start.