What is the difference between grants scholarships and loans

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Pros of scholarships Scholarships are free money that does not need to be repaid. There is no limit as to how many scholarships you can win.

There are billions of dollars worth of awards available for myriad student talents and interests. Winning a scholarship gives a boost to applications for future programs. It's a source of pride! Cons of scholarships Most are merit based or tied to unique attributes, like a student's background or intended major. Programs are very selective. Filling out scholarship applications can be time consuming. Pros of grants It's free money—duh.

Fortunately for you, we created a cheat sheet in the form of a handy, free online guide. In addition to grants, FAFSA also qualifies you for certain scholarships and federal subsidized and unsubsidized loans. Why would you want to do that? Like grants, scholarships are another form of free money. In fact, sometimes it can be hard to discern the difference between a grant and a scholarship other than the name. However, in a general sense, scholarships are more likely to be based on factors other than financial need.

The biggest difference between grants and scholarships is where they come from. While grants may come from government entities, scholarships rarely do. Rather, scholarships may be offered by schools, individuals, businesses, families, community organizations, or any number of other parties.

Scholarships usually reflect the core values or interests of the donor. For example, scholarships may be based on academic merit, participation or excellence in certain sports, geographic location, ethnicity, field of study, extracurricular activities, interests, lifestyle choices … you name it, it probably exists as a scholarship criteria. Believe it or not, there are even scholarships for random acts of kindness and for writing about fire sprinkler safety.

Where can you find scholarships? Filling out the FAFSA may automatically qualify you for some scholarships that are offered by the school you plan to attend. You can also search online with our Nitro Scholarship Search Engine and customize your search based on your field of study, your state, and other criteria.

Be sure to stay up to date with the database and sign up for personalized updates so we can let you know about new scholarships that may apply to you. Student loans are exactly what they sound like. Someone lends you money to pay for college and you agree to pay it back over a period of several years. These are the rock stars of the student loan world for one simple reason: lower interest rates. But, much like our favorite rock stars at the end of a concert, federal loans often leave you wanting more.

Grants are usually awarded by the federal and state governments and by colleges and universities. The Federal Pell Grant is the largest single grant program. Almost half of all grants come from the colleges and universities, more than a quarter are Federal Pell Grants, and the rest are evenly split between military student aid and state grant programs. Eligibility for a scholarship is based on merit.

Examples of merit scholarships include those that are awarded based on academic, artistic or athletic talent. Scholarships may also be awarded based on unusual talents, such as making a prom costume out of duct tape.

Scholarships are usually awarded by private scholarship providers, such as foundations, philanthropists, unions, employers, professional membership organizations, fraternal groups, non-profit organizations and religious institutions. Some scholarships have characteristics similar to grants. For example, many grants require the student to maintain at least a minimum GPA to renew the need-based grant.