How scholarships work
Scholarships are a form of “gift aid,” but they’re usually merit-based instead of need-based. Each scholarship has a different application procedure, but you can begin by completing the FAFSA, or Free Application for Federal Student Aid. Usually, you’ll need this in order to apply for institutional, state, or federal scholarships. You might also need to submit supporting materials for some scholarships, like a resume, letter of recommendation, and essay.
You can search through more than 8,000 scholarships, grants, fellowships, and other awards with the Labor Department’s Scholarships Search Tool. While some scholarships are intended for elite athletes or students, others target particular demographics like parents or homeschoolers. When applying, think about what sets you apart.
Additionally, private organizations offer scholarships that do not require the FAFSA. Narrow your search through free scholarship websites, including Scholarships. com, Fastweb. com and UNCF. org/scholarships.
Consult a college counselor and inquire with nearby organizations to learn about additional resources.
Don’t delay. Scholarship deadlines may fall one year before your intended start date of college. In the summer before your senior year of high school, start keeping track of the deadlines for the scholarships you intend to apply for.
How student loans work
Student loans come in two distinct flavors: federal and private.
The majority of student loans are federal, which are issued by the Department of Education. They provide strong borrower protections, such as the option to change to an income-driven repayment plan, which may allow you to make future payments that are less depending on your household size and earnings.
You can also take out private student loans. While private loans sometimes have lower interest rates than federal loans, they don’t provide the same level of borrower protection. Additionally, there are no federal student loan forgiveness programs available for private student loans. However, they remain a viable choice for covering any remaining educational expenses following the maximum amount borrowed from the federal government.
How much could your student loan payments be?
Most federal student loans have repayment obligations that begin six months after graduation. Congress sets the interest rates for all federal loan types once a year, and you are locked in to that rate when you first take out the loan. The interest rate will not change during the course of your loan.
Interest is determined differently for private student loans. While some lenders give all borrowers the same rate, others give each borrower a different rate. In those situations, only people with excellent credit, or those whose co-signer has excellent credit, are eligible for the lowest interest rates.
How to apply for student loans
To begin the process of obtaining federal student loans, complete the FAFSA. This one application determines your eligibility for all federal loan programs and registers you for any need-based financial aid, including grants, work-study programs, and some scholarship categories.
Applying for private student loans
Like a personal or auto loan, a complete underwriting procedure is necessary for private student loans. Banks, credit unions, internet businesses, and state-based organizations all provide them. Private loans take into account a borrower’s finances and credit score, unlike federal loans, so the majority of students will require a co-signer.
FAQ
What is the difference between scholarships and student loans?
A scholarship is an accomplishment award that is typically given out based on test results, class rank, academic standing, and other factors. Loans are funds borrowed by the student and/or parent. Most of the time, loans have an interest rate and must be returned within a predetermined amount of time.
How is a student loan different from a scholarship quizlet?
What distinguishes a scholarship from a student loan? A scholarship has no repayment obligations.
What is the difference between student aid and student loans?
Financial aid can be obtained through federal work-study programs or as gift aid, which is money that is given without expectation of repayment. Student loans must be repaid within a given loan term. In addition to the requirement that students repay their student loans, interest is usually charged during the loan’s term.
What is a key difference between a scholarship and a student loan quizizz?
Gift aid in the form of scholarships is non-repayable. Student loans must be paid back. Scholarships charge a high amount of interest.
Read More :
https://www.nerdwallet.com/article/loans/student-loans/scholarship-vs-student-loan
https://drexel.edu/soe/admissions/financial-aid/difference-between-student-grants-vs-loans/