Key Difference: Financial aid is to provide support to a worthy person or cause in monetary terms whereas scholarship is a form of financial aid awarded to students to help them pay for their education. Financial aid covers scholarships, grants, and loans.
Financial aid is to provide support to a worthy person or cause in monetary terms. Financial aid covers scholarships, grants, and loans. Scholarship is a financial grant aid awarded to students to help them pay for their education. It generally refers to grants in support of undergraduate education. Mostly financial aid is provided to the students as scholarships, need based awards, work study employment and student loans. Financial aid is provided by federal, state, local or private sources. In scholarship this financial aid is to cover the college expenses of the student. Scholarships do not require to be repaid whereas financial aid provided in terms of loan has to be repaid to the concerned provider. Loans and student employment are also considered as self-help aid.
Financial aid as grant is generally awarded to the financially needy students, this do not require the student to posses special talent or good academic background. The basic qualifying criteria for most financial aid grant programs is to demonstrate financial need. Scholarships are provided by the donor and retains with the receiver whereas before borrowing a financial aid of loan type the borrower must think about obligations as a borrower. The student needs to analyze the long term financial commitments before borrowing a loan. Financial aid of grant and loan has generally limits to money whereas in scholarships it may vary.
Grant and scholarships are also known as “gift aid” referring to free money. However in situation like withdrawal from school before finishing an enrollment period like semester, one might have to pay back some or all of a grant. U.S. Department of Education offers various federal grants like Federal Pell Grants and Teacher Education Assistance for College and Higher Education Grants.
A scholarship might cover the entire cost of your tuition, or it might be a one-time award of some money but it is always useful to reduce the cost of education. Many schools and colleges have financial aid office to obtain information about the financial aid offered by them. Some scholarships need the candidate to apply for the scholarship and some offer them without the requirement of applying. Government grants and loans are generally split into terms that are negotiated with colleges. If a college offers a scholarship it usually means discount in tuition fees whereas in student loan, student directly receives the money and can choose how to spend it.
Image Courtesy: australia.edu, jiemsakk.com