Grants are similar to scholarships in that they are “free money” given by an organization or college to help students pay for school. However, there are some differences. Grants are usually provided by governmental agencies or non-profit organizations. A student may receive his or her grant money in three different ways: by check or direct deposit, credited to a student’s account at his or her college, or a combination of the two. All government grant money goes to the college, which then passes it on to the student.
Many grants are awarded on the stipulation that the recipient will pursue a rigorous course of study or obtain a degree in an in-demand field. In some cases, grant money is exchanged for professional service following graduation. In addition, be prepared to put in some legwork for the grant, as applying for them can be a long and involved process. Some will require essays, others require letters of recommendation from teachers or community members, and those based on need, such as Pell grants, will likely need to see statements regarding the applicant’s family income.
Those who need additional financial aid for college can apply for student loans, which are sums of money that students can borrow from the government or private financial institutions. Each lender will have different guidelines for determining to whom they should lend their money and how much money they should offer. If you’re having trouble being approved for a loan, consider getting a cosigner. A cosigner can take joint responsibility for your loan, which can help you get approved. There are also options for parents to take out loans on behalf of their students, which is another helpful option for students who are struggling with loan approval.
Unlike scholarships and grants, loans consist of borrowed money, which eventually needs to be paid back to the lender. This means that loans typically accumulate interest over time, although the rate will vary with each loan. Some loans may be offered to students on a subsidized basis, which means that the student will not be charged interest while he or she is attending school. Other loans are unsubsidized and accumulate interest regardless of the student’s academic status. Students who have borrowed from the federal government may be eligible to have their loans forgiven, canceled, or discharged. Typically, this applies to teachers, public service officials, and major, life-changing events.