Loans and Scholarships: What’s the Difference?

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Students mainly use two forms of funding to pay for college tuition: loans and scholarships. Scholarships are money awarded to a student based on certain characteristics such as academic or athletic ability. Scholarship money is never refunded… Loans are money borrowed by a student or his parents. The loan money must be paid back after the student graduates from college or leaves college.… If loans are part of your college affordability plan, it is wise to choose the ones with the lowest interest rate. Contact the Student Financial Planning Office for help in determining which loan is best for your particular situation.

Other forms of aid that do not need to be returned include grants (such as an opportunity grant) and, for in-state students, KEES money. Students may be eligible for this assistance based on factors such as their high school grades or overall financial needs. It’s important to file the FAFSA as soon as it opens each year to get as much free money as possible, especially since government grants may run out.

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When students apply for a loan, they need to go through a procedure called an admission consultation. Students must also sign the principal bill of exchange for their loans. The financial planning department cannot add loans to a student to help pay for college tuition until the student takes these steps. To complete this process, visit www.studentaid.gov… To complete this process, you will need your FSA user ID and password, which is the same information you use to file your FAFSA application.

If a parent decides to take out a Parent Plus loan and help their child pay for college, the parent should also visit www.studentaid.gov apply for this loan. They will also need their FSA user ID and password to complete the credit check process. If the parent is approved, they will also need to fill out the main bill. If the parent is rejected, the student will be eligible for other unsubsidized loans on their own behalf.



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