How Is a Student Loan Different from a Scholarship?

Loans Must Be Repaid – You have to pay back student loans with interest after graduation.

Scholarships Are Free Money – Scholarships don’t need to be repaid if you meet their conditions.

 Based on Different Criteria – Loans are based on financial need or credit; scholarships are based on merit, need, or talent.

Affects Future Finances – Loans create long-term debt, while scholarships reduce education costs without debt.

Application Process Varies – Scholarships may require essays or achievements; loans often just need basic financial info.

Source of Funds – Loans come from the government or banks; scholarships come from schools, nonprofits, or private groups.

Goal Is the Same – Both help pay for education, but scholarships are more financially beneficial.