Introduction
Grants, scholarships, and student loans are all forms of financial assistance that can help students pay for their education. However, each type of aid operates differently and has unique benefits and drawbacks. In this article, we help you distinguish among grants, scholarships, and student loans.
A grant is free aid or a gift that does not have to be paid back and is based on the financial need of the student. A scholarship is also a gift however it’s awarded based on the student’s achievement which is usually based on academic performance, abilities and/or skills. Loans on the other hand are funds borrowed by the student or parent and must be paid back with an interest charge during a specified repayment period. This article focuses in detail on the differences among Grants, Scholarships and Student Loans.
Grants
A grant is free aid, meaning it doesn’t need to be paid back, making it the most sought-after option. The main difference between a grant and a scholarship is where the funds come from, the eligibility criteria, and the application process. In general, grants are given based on financial need and not on merit or performance. Grants are usually provided by the government and provide opportunities and funding for students from low-income families or communities to pursue higher education.
Although grants may be easier to get than scholarships, they may not be enough to cover the full college expenses for the student. Also, there are fewer grant options than scholarships.
Scholarships
Scholarships are also free aid but they are merit-based and awarded to students based on their academic achievements, extracurricular activities, the field of study, and more. Scholarships are usually offered by educational institutions, community organizations, businesses, families, or individuals and may be in full or partial cover of the student’s academic and welfare needs.
Scholarships usually promote core values of interest of the provider for example some may be based on excellence in certain sporting activities, academic excellence in certain fields of study, or specific talent. Like grants, some scholarships are also awarded based on financial needs backed up by student excellence. So some scholarships are usually very specific.
While scholarships do not need to be paid back, they are highly competitive and it’s not easy to get awarded one. Students have to be exceptional to beat the competition and need more time to search for and apply for the appropriate one. Being awarded a highly competitive scholarship is a plus on the student’s CV when applying for a job so it’s not just about getting free funding but also the other indirect benefits.
Student Loans
Loans are not free and have to be paid back with interest when they become due for payment. These are accessible to a wide range of people and have only a few requirements for eligibility therefore they are easier to get as long as the borrower demonstrates the capacity to repay. Because student loans have to be repaid, they are the easiest to get compared to grants and scholarships and can also be used to cover other expenses apart from tuition. However, if you fail to pay off on time, your creditworthiness may be damaged hindering you from getting further credit from other institutions in the future.
Conclusion
Depending on your eligibility you can apply for a loan, scholarship, or grant. Information on the availability of these options in your country can be found on the Internet or from the ministry responsible for education in your country. If you possess certain talent or skill or you are exceptionally good in sports or academics you have a high chance to get funding. Therefore you are encouraged to find out.
You can also read:
How to maximize your chances of getting a scholarship.
Tips for Writing a winning scholarship application in 2023
Common scholarship myths and misconceptions in 2023.
College Grants vs. Scholarships vs. Loans: What’s the Difference?
