Scholarship vs. student loans: which is better?
Updated on April 15, 2020
Paying for your college education can be expensive for any family due to rising tuition costs. However, going to college is essential as it opens you up to endless career opportunities and better wages. Therefore, if you’re considering going to college, you’ve probably thought of how you can pay for it.
Luckily, there are several ways you can pay for college, e.g., scholarships, grants, federal student loans, and private student loans. Below, we’ll look at scholarships and student loans to help you make an informed decision between the two.
Student loans are common among many college students, and they are funds borrowed from a bank, private lender, or the government to pay for college. Unfortunately, you have to repay your student loan with interest after you graduate.
Student loan repayment options usually differ, depending on which institution lends you money. For instance, if you apply for a federal student loan, you can apply for income-driven repayment plans. This allows you to pay back an affordable amount based on your income and family size.
Many students opt for student loans because they receive one lump sum amount at the beginning of the school year. Additionally, you get student loans directly into your account, allowing you to choose how to spend the money. However, be careful not to spend your student loan on miscellaneous activities such as buying a new car if this isn’t necessary.
Unlike loans, scholarships only cover education-related expenses. Moreover, you’ll never set your eyes on your scholarship money as it’s given directly to your college to cover your tuition bills.
Alternatively, scholarships from independent organizations may come in as an actual check, but the amounts are comparatively small. The beauty of scholarships is that you don’t have to pay back the money once you graduate.
Which is better?
If you’re looking to cover other expenses such as books, living costs, and supplies, it’s wise to apply for a federal student loan. But, if you only need money to cover your tuition costs, apply for a scholarship.
Contact StudentLoanify today to check out some of the student loan options available.