Which is Right for You: Scholarships, Grants or Loans?

May 7th 2016

The cost of a higher education is a considerable factor for college students. Determine your best method to pay tuition and college expenses by investigating options that can help defray the challenges of paying for an education.

Scholarships

Scholarships are one of the most desired forms of financial aid for college. You are not required to repay scholarship money as long as you meet the requirements and stipulations of the financial award. Scholarships are often awarded by academic departments at your college of choice, government entities and private organizations. Almost all scholarships require students to complete an application, and many request essays or supplementary forms or documentation. You can obtain a scholarship based on your academic merit, financial need, community involvement or specific requirements set by the agency offering the scholarship. A scholarship may cover full or partial tuition and some even provide funds for housing and living expenses. Seek out opportunities for scholarships within your institution's financial aid office and scholarship websites to help offset the cost of college and eliminate debt.

Grants

Grants are funds issued by federal or state entities and private organizations and do not require repayment. You can determine your eligibility for grants by completing the Federal Application for Student Financial Aid, or FAFSA. Some students qualify for grants based on financial need as verified by financial data submitted through the FAFSA. Other students may be awarded grants based on academic merit, occupational goals or affiliations with the military. For example, students who commit to teaching in low-income districts for a designated amount of time after graduation often qualify for teaching grants through their state of residence. Private organizations also offer grants for college students. Seek out grant opportunities within the financial aid office of your college and investigate the FAFSA website for eligibility requirements.

Loans

Student loans are funds borrowed by college students through the federal government. You are responsible for paying back loans once you stop taking courses or complete your degree. Repayment is often a drawback because some students find themselves in considerable debt once their education requirements are complete. However, for students who do not qualify for scholarships or grants, loans are often a viable option. The federal government offers different types of loans that may not accrue interest while a student is attending, and repayment options often include graduated programs that help to make paying back the debt more affordable.

Conclusion

College is an academically challenging venture. It can be even more challenging if you are concerned about how to financially afford this opportunity. Financial aid is a necessity for many students, but the terms can be confusing. You may not know which financial option reduces your overall debt or helps cover college tuition and expenses. Learn the differences between scholarships, grants and loans to determine which financial option is right for you.

Sources

UNLV.edu "Scholarships, grants, and loans differences" http://www.unlv.edu/finaid/checklist/before-differences
USNews.com "12 college financial aid terms defined" http://www.usnews.com/education/blogs/the-scholarship-coach/2012/07/19/12-college-financial-aid-terms-defined
CollegeScholarships.org "Understanding scholarships, fellowships, grants, and loans" http://www.collegescholarships.org/blog/2015/03/27/differences-between-scholarships-fellowships-grants-loans/

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