What is the difference between a grant and a loan?

A grant and a loan are both forms of financial aid, but they have significant differences. A grant is essentially free money awarded to students to help cover the costs of their education. Grants do not require repayment, making them a desirable option for students who qualify. They are typically awarded based on financial need, academic performance, or specific criteria established by the funding organization. On the other hand, a loan is money borrowed that must be repaid over a specified period, often with interest. Loans can come from the federal government or private financial institutions. While government loans may offer more favorable terms and lower interest rates, borrowers are still responsible for repayment regardless of their financial situation after graduation. Understanding these differences is crucial for students when planning how to finance their education. Students are encouraged to explore various financial aid options, including grants, scholarships, and loans, to create a well-rounded financial plan for their education. For more detailed information on grants and loans, the current web page of the US Department of Education Financial Aid is an excellent resource.