As you start to look for options to help you finance your education, should you first search for scholarships or loans? Both scholarships and student loans are forms of financial aid that are available to help you pay for your education but the biggest differences become apparent after graduation.
Scholarships are a great source of financial aid that can help supplement your college costs. In today’s world, you do not have to be in need, a blue-chip recruit or a straight-A student to get one. They can be based on a range of elements like music, painting, leadership, cooking, volunteering, etc. What’s the best feature of a scholarship you may ask? YOU DON’T HAVE TO PAY IT BACK! That’s right, it’s what is referred to as free money, which means you are not required repay any amounts you receive through scholarships after you graduate. It will take some work on your part to research and submit applications, but if you apply early and often you will improve your chances of receiving something.
Student loans are another helpful source of financial aid. Yes, you read that right: student loans are considered financial aid and can be a great tool for helping you pay for your education. The difference between a student loan and a scholarship is you are required to repay the money you borrowed after you graduate. These loans are designed with the student in mind; they often do not require payments while attending school, have low interest rates and options to help with repayment. The key is to understand what you are getting into and manage the debt you are borrowing:
- Take time and read before you sign anything related to your financial aid
- Ask questions if you do not understand how the loan works
- Know what is expected of you
- Make a budget and only borrow what you really need
- Read the mail from your lenders and school or college
The financial aid office will determine if you are eligible for a student loan and what type. Student loans do not have to be scary, but take the time and educate yourself before you accept one.
So based on what we know, which should you search for first? I would say scholarships should always come before student loans. Although some scholarships are awarded through the Financial Aid Office, for the most part it is up to you. Student Loan eligibility has to be determined, so know what you are looking for. Besides, free money always wins over money that has to be repaid. As I stated above, it takes some effort on your part but applying early and often increases your chances of getting selected for a scholarship. You may be eligible for more scholarships than you think, but you won’t know until you look. There are many free search sites like Tuition Funding Sources and FastWeb on the internet, so no time like the present to start looking. Happy hunting!