When you’re applying for college, scholarships can seem like a great way to help pay for your education. But do you have to pay them back?
The answer is: it depends.
There are two main types of scholarships:
- Gift scholarships: These scholarships are considered a gift and do not have to be repaid. They are typically awarded based on financial need, academic merit, or other criteria.
- Loan scholarships: These scholarships are considered a loan and must be repaid, with interest, after you graduate. They are typically awarded based on financial need and are often used to cover tuition and other expenses.
According to College Board, there are over 1.5 million scholarships awarded each year, totaling over $14 billion in funding. Of that amount, about $8 billion is awarded in the form of gift scholarships and $6 billion is awarded in the form of loan scholarships.
So, if you’re offered a scholarship, it’s important to find out if it’s a gift scholarship or a loan scholarship. If it’s a loan scholarship, you’ll need to make sure you understand the terms of the loan before you accept it.
How to Find Out if a Scholarship is a Gift or a Loan
The best way to find out if a scholarship is a gift or a loan is to contact the organization that is offering the scholarship. They will be able to tell you the terms of the scholarship and whether or not it has to be repaid.
You can also usually find information about whether a scholarship is a gift or a loan in the scholarship application materials. The application will typically state whether the scholarship is a gift or a loan and, if it is a loan, the terms of the loan.
What to Do if You Have to Repay a Scholarship
If you have to repay a scholarship, you’ll need to make sure you understand the terms of the loan. This includes the following:
- The amount of the loan
- The interest rate
- The repayment period
- The penalties for late payments
You should also make sure you have a plan in place for repaying the loan. This may involve getting a part-time job, taking out a student loan, or using other resources to help you repay the loan.
Alternatives to Scholarships
If you’re not eligible for scholarships or if you don’t want to take on debt, there are other ways to help pay for college. These include:
- Grants: Grants are similar to scholarships, but they do not have to be repaid. They are typically awarded based on financial need.
- Student loans: Student loans are a type of loan that can be used to pay for college expenses. They are typically offered by banks and other lenders.
- Work-study programs: Work-study programs allow you to work on campus to earn money to help pay for college.
- Tuition payment plans: Tuition payment plans allow you to spread out the cost of your tuition over a period of time.
Conclusion
Scholarships can be a great way to help pay for college. However, it’s important to understand the terms of a scholarship before you accept it. If you have to repay a scholarship, you need to make sure you have a plan in place for repaying the loan.
