Grant$, Scholarship$, and Loan$
www.EducationDx.com
These financing terms can be confusing to young potential college students, as well as adults. 
       Search for college financing with confidence by learning what these terms mean.

Grants, Scholarships and Loans for College

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Site Index Student College Loans College Money Grants and Scholarships Student Aid
     Attending a college can be expensive. Your savings and your job cannot always supply the money that is necessary for tuition, books and related fees.  If you are searching for money to help with college expenses, you will find the words grants, scholarships and loans.   
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     A scholarship usually has some requirements, like maintaining a certain GPA and/or taking a specified number of credits per semester. Scholarships can be given for various reasons, e.g., athletic, academic. There are also scholarships available for students with music talent or just for being short or tall!

     Like grants,
scholarships don’t have to be paid back, if you follow the rules for obtaining and maintaining them. Also, like grants, sometimes you are permitted to spend any remaining money, after tuition is paid, on college “related expenses.”
     Occasionally, the terms scholarships  and grants  are used interchangeably. You need to review the specific scholarship or grant to determine the category or if there is a real difference. There may be a stipulation with the grant or scholarship that states that you must donate so many hours of community service, teaching or helping others.  Some scholarships or grants have no service requirements.
     A loan is money that a lender gives you with the expectation that you will pay the money back in the futureUsually, you will need to provide some collateralCollateral is a security pledged for the repayment of a loan, e.g., a house.  You may need someone to co-sign the lending contract.  A co-signer makes a legal promise to pay your loan debt if you fail to do soIf parents sign for their child’s loan, it becomes their loan.

     What does the person or organization get out of lending you money?  They get a bonus called interest. You used the lender’s money that they could have used somewhere else, so it is only fair that you compensate them.  So instead of just paying back the $1000 you borrow, you pay an additional fee (interest) to compensate for using some investor's money.  The rates vary with different lenders, so you need to be knowledgeable on this matter, you need to shop around, and you need to
READ the CONTRACT before  you sign it!
     It is possible to get all three: grants, scholarships and loans.
However:
If you can get enough scholarships and grants, it is possible for some students to fund the cost of education without having to take out loans or take on agonizing debt.

     There are a few websites that can help you learn how and where to look for grants, scholarships and loans.  Here is One!
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It is necessary to understand a few basic terms when searching for financial resources to help pay for college.
"I thought that a grant is money that the federal government gives to students and others give scholarships.  Can a company or organization give a grant, too? What is the difference?
Either or Either?
     Everyone should start by filling out a FAFSA (Free Application for Federal Student Aid) application. Do this whether you "think" you qualify or not!
     Perhaps you researched these three terms, and are now even more confused. How do these terms differ, and which form of student finance suits your financial needs and ability to pay for college?

     Sometimes these terms are used in another context, and do not even deal with school or education, e.g., car loans, house loans, building grants. I will attempt to clarify these terms,
as they apply to education, and provide you with some details.  There is a significant difference with one of these terms.
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+ Grants
+ Scholarships
Fill out FAFSA at the gov site:  www.fafsa.ed.gov
+ Grants and Scholarships
- Loans
No Co-Signer--No Collateral?  No Problem!
ALL THREE!        Grants, Scholarship, Loans
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(Student Loans)
     There are government (taxpayer funded) student loans that do not require a co-signer or collateral. The federal government is the sole provider of federal student loans because of a new law (July, 2010).  There are Direct Stafford Loans:  Direct Subsidized Loans and Direct Unsubsidized Loans.

    
Deciding not to pay the lender back under the terms of the contract can have some serious consequences.  It is very important that you have a plan to repay the loan as soon as you can.  Also, it is a good idea to have a backup plan in case your original plan doesn’t work out. 

     
Caution:  Unfortunately, some unscrupulous person may be thinking about taking out a taxpayer funded government loan, with no intention of paying it back--or for that matter, even attending college.  This is not free money, so be prepared to suffer the legal consequences.  DON'T DO IT.
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(College Money)
     A grant is money supplied by the government (the taxpayers), companies, foundations or other groups.  Basically, you apply for the grant and someone makes a decision whether to give it to you.  Some grants are based on your family’s income, e.g., Federal Pell Grant. Others are decided by various means, for example, a committee decides that you deserve a grant based on their criteria, e.g., Study Abroad Grant.

    
One nice thing about grants is that you don’t have to pay them back, if you follow the rules for obtaining and maintaining them. The grant dictates what the money can be spent on, e.g., tuition, books, computers. Sometimes you can spend the remainder, after tuition is paid, on whatever you need!
This is where many students and their parents get into trouble!  See Loans
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Grants
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