Which Colleges Are Awarding the Most Free Money (2025-2026)?

When it comes to paying for college, not all financial aid is created equal—and not all colleges are equally “generous.” This article spotlights the colleges and universities that offer students the largest grant aid packages—money that never needs to be repaid.

And understanding how much grant money a college typically awards is critical for applicants and students in the current Trump Administration’s political climate that’s made student loans less available, more expensive, more difficult to obtain support for, and much harder to pay off.

As part of the Trump Administration’s attempts to dissolve the U.S. Department of Education, in March 2025, the agency announced it would lay off about 1,400 employees at its Washington, DC headquarters, plus several regional offices across the nation. These layoffs amounted to about half of the agency’s employees, and the Department’s Office of Federal Student Aid (FSA) was especially hard hit. This division manages all the federal initiatives that help students pay for college, including the crucial Pell Grant program and about $1.6 trillion in student loan financing.

ED officials repeatedly claimed that those cuts “will not directly impact students and families.” Yet college financial aid administrators soon began reporting system slowdowns, breakdowns in communication, and—yet again—delays in processing the crucial FAFSA (Free Application for Federal Student Aid) online forms. This was the second instance involving delays in FAFSA processing, along with the Biden Administration’s crisis that shut down that system while migrating it to a simplified form during the 2023-2024 academic year.

The National Association of Student Financial Aid Administrators then began tracking the effects of the layoffs through a series of member surveys. According to the first of these surveys in May 2025 that polled financial aid directors at 909 colleges, 59 percent of these schools’ financial aid offices reported “noticeable changes in [Office of Federal Student Aid] responsiveness or delays in processing timelines” following ED’s job cuts. Thirty-three percent of respondents reported FAFSA and ISIR (Institutional Student Information Records) system disruptions after the March layoffs, including issues similar to those that led to last year’s FAFSA crisis and delayed student financial aid packages for months.

Many of the administrators reported losing access to their regional federal support offices, and some of these respondents told NASFAA they no longer have a clear point of contact within the Education Department. About 62 percent reported that since March they’d filed at least one application for federal financial aid; half of those directors reported longer-than-usual processing timelines, and a quarter said they had received no confirmation their applications had been received. About 41 percent said they were no longer sure which office to call for support from ED.

NASFAA then conducted a follow-up survey in July which found that most of these conditions had not improved, but worsened. Nearly three-quarters of the 547 institutions polled said that Federal Student Aid (FSA) had become less responsive since May, with many citing problems across multiple systems like call centers (53 percent), the National Student Loan Data System (47 percent), and student loan servicing (36 percent). Almost half of schools reported delays in processing key applications such as the Electronic Application to Participate in the Federal Student Aid Programs (e-App), and about one-third said FAFSA and ISIR processing was lagging as well.

Campus aid officials appear to be especially worried about how these disruptions are affecting students. Nearly half said their greatest concern is the impact on students’ access to federal aid. Reports of students receiving confusing or delayed information from FSA have jumped from 32 percent in May to 51 percent in July—an almost 60 percent climb in only about eight weeks. One in three institutions said students had directly voiced frustration, particularly about FAFSA processing and related financial aid eligibility.

The strain is showing up in college financial aid offices, too. Sixty percent of institutions now say they’re fielding more student inquiries about federal financial aid access or service delays—up from 45 percent in May for a 33 percent increase—and more than a quarter report receiving at least 25 such inquiries during June and July.

“Financial aid administrators are resourceful and committed, but there’s only so much they can do to shield students from these disruptions,” said NASFAA President Melanie Storey. “If federal service channels don’t stabilize soon, the nation’s student aid system could become less accessible, less predictable, and less trusted—at the very moment students and families need it most.”

Meanwhile, during a period when many students, families and college officials are all reporting roadblocks in obtaining timely help from FSA, understanding how much institutional grant money a college typically awards is more crucial than ever. The institutions presented below provide the largest grant awards among undergraduate colleges; these awards help make their colleges and universities more affordable. College students receive about $82 billion in such grant funding across the nation every year; add in state grants and the total amounts to $100 billion.

Based on our analysis of federal data from both the College Scorecard and IPEDS databases, and ranked in order of average grant aid per student, here are the institutional grants awarded for an average student at America’s top 16 “most generous” colleges and universities.

Right away, our knowledgeable OnlineEducation.com readers will recognize that this ostensibly “generous” list comprises 16 of the most highly selective private nonprofit undergraduate colleges and universities in the world—schools where very few Americans would even stand a chance of admission.

For example, Stanford University’s 2024 undergraduate acceptance rate was a tiny 3.6 percent, a proportion that makes it one of the most selective universities around the world. This means that out of 57,236 applicants, Stanford only admitted 2,067.

But that’s not news, and the ostensible simplicity of this table is deceptive. There’s much more that’s really going on in this table that students and parents need to understand.

Fortunately, a bombshell report just appeared that will help us unpack these financial aid dynamics—some of which may seem surprising even to OnlineEducation’s readers. It’s already making headlines in the education press and will probably break out into national media coverage early in 2026.

This report by the Century Foundation is titled “A Better Hundred Billion: Improving State and Institutional College Financial Aid.” It argues that so many serious issues exist with the distribution of institutional grant aid that Congress needs to promptly intervene to regulate the colleges that offer these grants.

Because this is a highly technical report containing sections that may be challenging for nonprofessionals to understand, below we present a simplified analysis of the report’s main points that spotlights how college grant financing actually works—or more accurately, doesn’t work—in practice.

1. A Market Where Principles of Economics Don’t Apply

If we drive down to our local warehouse store to shop for a big-screen computer display or TV, we can reasonably expect that basic economic principles probably apply to our choices on the shelves.

That is to say that the products that deliver the most value will probably sell for higher prices than competing products that deliver less value. In part, that’s because demand for the higher-value products will have bid up their prices, but it’s also because of competitive pricing strategies set by the manufacturers, distributors, and retailers. That description might amount to an extreme oversimplification, but in a nutshell, it’s nonetheless based on eight weeks of microeconomic price theory taught in Economics 101.

Yet as we’ll see next, that’s not the way things work with the American market for undergraduate tuition. Since the late 1980s, this market has operated in completely counterintuitive ways that don’t conform to modern price theory. There’s also a “knowledge gap” where astute college applicants and families who understand these differences can sometimes exploit them in negotiating among schools for better financial aid offers.

2. The “High-Tuition, High-Aid” Model

The report reveals that colleges giving out the most grant money are often using inflated sticker prices to create the perceptions of value and generosity.

Century’s scholars argue that almost all private nonprofit colleges today as well as some flagship state universities apply a “high-tuition, high-aid” pricing model. In this model the advertised sticker price for tuition starts out vastly overpriced relative to the institution’s costs; the admissions office then adjusts that price downward for most students through discount grants that decrease the net price tuition that a student will eventually pay. This means the colleges on our list may not actually be “generous” at all—they’re often just discounting artificially high sticker prices in response to competing institutions who are doing the very same thing.

Despite nonsense that the national press claims about “skyrocketing” sticker prices, the net prices students actually pay have remained relatively constant across the United States for the past 18 years. (For more on the differences between sticker prices and net prices, don’t miss our feature article “College Affordability: Why College Costs Aren’t Skyrocketing.”)

3. The Psychology Driving Big Numbers

Century’s report also explains why colleges advertise large grant amounts: these awards make applicants feel wanted and “special,” and that’s especially true of grants awarded on the basis of merit as “scholarships.” Yet applicants to some schools like George Washington University may assume the grants offered to them are awarded to a select few, not realizing that exclusive-sounding awards with gussied-up brand names (“Presidential Academic Scholarship”) are routinely doled out to half of their prospective classmates.

“‘High-tuition, high-aid’ is an experiment in psychology as much as one of economics,” writes the Century Foundation’s authors. Referencing multiple regression analysis and research conducted by the higher education consulting firm EAB, they continue:

What’s particularly scary is that colleges know the exact amount of money to put on that letter to make it a difficult question. Per the Wall Street Journal’s reporting:

Using econometric modeling, EAB knows that a $23,000 discount on a $50,000 sticker price has a 24 percent chance of luring a young woman with middle-of-the-road grades to a nearby private college in the Midwest. Bumping the scholarship up to $28,000 yields a 47 percent likelihood.

Sophisticated strategies like these—which are really sales and marketing techniques—are euphemistically called “enrollment management” in the industry’s parlance. Applicants and families who recognize these strategies can make better decisions.

4. Who Actually Benefits from Large Grant Programs?

In terms of equity—and at a time when millions of Americans say they can’t afford college—we’re really looking at a developing scandal. Relatively few Americans have ever heard of this scandal, let alone understand the issues driving it.

From the report:

A high share of state and institutional grant dollars go to students without financial need for them, even while low-income students have unmet need that they must take out loans or seek work to fill.

The Century Foundation’s data shows that a staggering three-fifths of students from families in the top income quartile win grants in excess of their need (56 percent). The value of these unnecessary grants is about 10 percent of the total, and amounts to at least $10 billion a year. Yet essentially none of the students in the bottom quartile receives grants greater than their need—a mere 0.2 percent.

In other words, top-quartile students are 280 times more likely to receive grants exceeding their needs. Moreover, the share of white students who receive grants that exceed their need (19 percent) is also about three times that of Hispanic students and Black students (five percent).

This suggests that colleges which give out the most money—like those on our list—may be using those funds primarily to compete for wealthy students (along with their parents who can afford large donations) rather than help poor, deserving students who need grant funding the most.

5. Do All Applicants to the “Large Grant” Colleges Actually Receive the Grants?

It’s true that these colleges’ students win larger grants on average. But that doesn’t necessarily mean that a given applicant will actually receive such a large institutional grant. That’s because the policies that govern how these grants are distributed frequently defy logic.

For example, at public four-year institutions, out-of-state students receive institutional grants that are on average twice as large as the grants awarded to in-state students. Policymakers in some states, like North Carolina, have considered fining the colleges that engage in these practices.

Additionally, a student with an Expected Family Contribution (EFC) of zero dollars at a public four-year institution is actually less likely (a 42 percent probability) to receive financial help from their college compared to those with higher EFCs (47 percent).