The fact is some students have no idea whether a student loan is different from a scholarship. Considering the shape of the world at present, it is not ideal to stop one’s education at the high school level. And as a result, many students who are not financially buoyant seek financial assistance; taking loans and scholarship offers where available.
In view of this, we shall be looking at some of the reasons why a scholarship is different from a student loan.
Orthodoxly, every high school graduate desires to further their education. But for several reasons including financial instability, many are unable to go further, since it is impossible to be faster than one’s shadow.
SEE ALSO:Â Difference Between a Bursary and a Scholarship Fund
How do student loans work?
Simply put, student loans are money lent in order to support schooling. Such money may be borrowed from private or government sectors. But this does not explain how the whole thing works.
Student loans are not only designed for tuition fees. They can be borrowed to cater for any student-related expenditures.
The type of loan you take determines how your interest rate is calculated (remember that interest must surely be added to every principal amount borrowed).
Unlike scholarships, student loans have to be paid back later with interest. Since most students are not in the working class, loans may become quite tough for them to handle. Having to think about loans alongside what one is being taught in school can also be very stressful to the mind and brain.
All students prefer scholarships over student loans but the latter is easier to get than the former, making it a choice for many.
SEE ALSO:Â Must Read! Does Academic Excellence Guarantee a Successful Life?
How does Scholarship work?
A scholarship is a grant awarded based on a person’s academic or other achievements for free education.
Some people think scholarships are for the less privileged but that’s not always the case. Whether a person is rich or not he or she is entitled to a scholarship if he can meet the requirements for prospective benefactors of the program. Therefore scholarship works in different ways.
Governmental grant for students.
Scholarships granted by Government through any means could be categorized as governmental scholarships. These are scholarships often based on merit. They are offered in Government-owned institutions.
An example of this is Joe Biden’s scholarship majorly designed for the citizens of the United States to benefit from.
SEE ALSO:Â Top 10 Tips to Pass IELTS Examination | Passing Score
Non-governmental scholarship grants
Scholarships of this kind may be offered by an individual or a group that doesn’t identify with the government. There may be scholarships offered by companies to compensate their patrons or to send their staff abroad to be more educated so they can fit in for certain positions.
Some people may also single-handedly sponsor less privileged students to school.
A scholarship may be a one-time award of some money or fully funded. When it’s not fully funded the scholarship-giver specifies how long the grant will last. Sometimes a scholarship may last for just one term or session in school.
Can scholarships pay off student loans?
Students also find it hard to answer whether a scholarship can clear off debt since it is more valuable than student loans as many claims. Well, A Yes or a No will not go wrong as a direct answer to this. But let’s analyze properly.
Scholarships may come in different forms for the same purpose.
Oftentimes, people get scholarships when they are already schooling, such scholarships are usually to cater for the completion of the ongoing education, so there will be nothing like a cash prize or anything that brings some money directly to your account.
On the other hand, some scholarships come with or as cash prizes. In this case, you can choose to pay off an outstanding student loan if any. This depends solely on your sponsor.
SEE ALSO: Side Hustles for Students in College or University
Conclusion: How is a Student Loan Different from a Scholarship?
Because of what has been examined earlier in this piece students are advised to maximize any opportunity they get to enroll in a scholarship program. A student loan may bring happiness at first but end in regret – if not well managed.
Taking loans is also not a bad idea if it will help you as a student because regardless of the fact that education is the right of everyone it has become very expensive over the years.
