You can pay for college in several different ways, including using scholarships and student loans. While both are types of student aid, the former is a monetary gift that doesn't need to be repaid, while the latter is a debt product that you typically need to pay back.
When you consider the major types of financial aid for students, it's easy to identify some key characteristics of each type:
- Scholarships are usually merit-based awards given to students who have achieved academic achievement or demonstrated excellence in a particular field;
- Grants are need-based awards;
- Student loans are money you borrow but you have to pay back after you graduate.
What are student loans?
Student loans are one of the most common types offinancial id.Since they’re loans, you eventually have to pay them back. That means they put you into debt.
However, they are generally the easiest form of aid to get since they’re based on need. Nearly 43 million borrowers have some level of student loan debt.
Depending on tuition, family contributions, and how much you can earn in free aid, you may need to take out student loans to cover any additional funding gaps. Learn more about how student loans differ from scholarships and other ways to pay for higher education.
Scholarships vs. Grants vs. Loans
While scholarships, grants, and student loans all aim to aid students in their educational journey, they have distinct characteristics that differentiate them.
Similarities
- Purpose: in essence, all three – scholarships, grants, and student loans – are designed to assist students in covering educational expenses so that their financial situation doesn’t stop them from getting an education.
- Rigorous application: regardless of the type, you need to meet specific criteria to qualify. Applying for financial aid as a student is often a thorough and rigorous process.
How to get a scholarship
The application process and award criteria for scholarships vary. However, the general steps are similar in most cases.
Start by looking for scholarships. You can contact your financial aid office, browse online, or use a service like Mos to get scholarships.
From there, you’ll fill out the application and attach any documents they need. You’ll also complete the essay, video, or other requirements before submitting it. Follow any other instructions to complete the application.
You will eventually get a response from the institution offering the scholarship as to whether or not you have been awarded the scholarship. How long this takes varies from organization to organization.
Private Student Loans
Private loans are offered by banks and other financial institutions. They often require a good credit history and may have variable interest rates. Some online platforms also offer student loans with competitive rates and flexible repayment terms, thereby, making them increasingly popular among borrowers.
