If you are preparing for college, it is important to understand the different funding options available to you. Here is the basic terminology for 3 different options:

Grants
A grant is a type of federal or state financial aid that does not need to be repaid.  Typically, grants are given to people as a form of financial aid.  Grant money does not have to be repaid.

Student Loans
Student loans are a form of financial aid given to a student by a federal lender or a bank or credit union.  This type of loan is specifically used for educational costs.  Student loans normally have lower interest rates than other types of loans and offer repayment beginning after the student has graduated and begins working and earning an income.

Scholarships
A scholarship is a financial award given to students who excel in academics, athletics, music, art, or some other area of study.  Scholarships are not repaid; however, the student typically must maintain a certain grade point average to continue to receive the scholarship.

Have you started looking into college funding yet?

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