The federal government gives out the most. To qualify, students and parents must fill out the Free Application for Federal Student Aid. (FAFSA). Most federal grants, such as Pell grants, are awarded strictly on the basis of financial need. But some new programs, such as the Academic Competitiveness Grants and Smart Grants, are awarded to low-income students who also have good grades. State governments give out lots of money, too. Some states, such as Florida, New Mexico, and Tennessee give out grants solely based on grades. Others, such as California, give out money based on financial need and grades.