Students loans and scholarships are both means by which students can access fundings to further their education at their respective educational levels. They are forms of financial aids for students granted based on some set of criteria.
However, there is difference between a student and financial aid. An easy way to differentiate a student loan from a scholarship is that you need to pay back the money or funding you get from a student loan.
Student loans simply mean money you borrow from a lender to finance your education which you will pay back after a period of time with or without added interests. Meanwhile, a scholarship is an award for academic excellence or need in which the provider finances your education without you being required to pay back.
This article will put you through the different options you may consider when looking for financial aid to help you finance your education. We will explain how a scholarship and a student loan are different from each other.
Let’s start with the student loan;
A student loan is a type of financial aid students can borrow to fund their education. Student loans can cover many students’ expenses like tuition, books, accommodation, and food expenses. However, whatever amount of funding you get from a student loan must be paid back after a specific period of time stated in the list policy or agreement.
Most times, qualifying for a student loan usually depends on the financial needs and the capability of the individual to pay back the loan. Students whose income may be insufficient to fund their education may qualify for a federal student loan and pay for their educational expenses. However, for private student loans, there are specific eligibility criteria which may include a good credit history to guarantee you will be able to repay the loan.
The student loan is provided by a loan provider either a federal government or a private lender. These providers work with your school’s financial aid department to pay your educational fees. Most times, the student loan pays for your education per semester.
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Now let’s talk about the scholarship;
A scholarship is a prize awarded to you for meeting certain academic standards or requirements. There are different types of scholarships, most scholarships are merit-based which means they are awarded to students who exhibit outstanding academic potentials, while some are need-based which means they are awarded to students who exhibit financial need. Other factors in which students can be granted scholarship is athletic skills, leadership potentials, and community service.
To benefit from a merit-based academic scholarship, candidates must be academically brilliant alongside some other criteria. The scholarship organizers will access your academic achievements or performance and if you meet the required requirements, you will be granted scholarship.
Just like the student loan, the scholarship organizers will work with your school’s financial aid department to fund your education. These scholarships can either be full or partial, partial scholarships are scholarships that can only pay for some of the academic expenses, however, full scholarships cover most, if not all, of a student’s academic expenses.
In summary, student loans are funds lent to students to help them finance their education, which must be repaid after a specific period of time. While scholarships are awards granted to students for fulfilling certain criteria. A student loan is something you pay back while a scholarship is something you earn.