What is the difference between a grant and a loan?

Scholarships and financial aid loans are all different forms of financial aid that students may use to pay for their education. The main difference between them are as follows:

scholarships: Scholarships are awards given to students based on academic, athletic, or artistic achievement. They do not have to be repaid, and are often provided by private organizations, universities, or government agencies.

Grants: Scholarships are awards given to students based on financial need. It does not have to be repaid, and is often provided by the government, universities or private organizations.

Financial aid loans: Financial aid loans are loans that students take out to pay for their education.

It must be repaid, usually with interest, and is often provided by the government or private lenders. These loans can be subsidized (the government pays the interest while the student is in school) or unsubsidized (interest accrues while the student is in school).

In short, scholarships are a form of financial aid that does not have to be repaid, while financial aid loans must be repaid with interest. Scholarships are awarded on the basis of merit, while grants are awarded on the basis of financial need.

A table showing the difference between a grant and a loan

ScholarshipsGrantsLoans Financial assistance
Help typeهديةهديةSelf loan
Based onStudent meritFinancial needNeed or merit
Payment is requirednotnotyes
Benefitnotnotyes
ProviderPrivate organizations, universities and government agenciesGovernment, universities and private organizationsGovernment, private lenders
Purpose of assistanceTuition fees, housing, books and insurance.Tuition fees and housing.Tuition fees and housing. Insurance, books, and other supplies such as travel, etc.

Pay attention to the issue of interest, as it is often illegal, so you must ask carefully before you think about benefiting from such loans.

What is the difference between a grant and a loan?

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