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Education loan vs Scholarships Vs Grants: Everything you need to know

Not only does education hold the power to transform the world, its potential in opening a world of opportunities for an individual can’t be doubted either. It is, thus, regrettable that higher education is fast becoming a privilege that many are unable to afford. The rising cost of higher education robs many a bright student from realizing their potential. Financial reliance on education loan, scholarships and grants is a gripping concern for many.

Without external financial support, higher education can be beyond reach for a large section of the population. Thankfully, however, there are several options through which a student can receive external funding for their education.

In this article we will look at the three most popular options, evaluating them for their relative pros and cons, to help you understand them better.

Discussion: Education Loan vs. Scholarships and Grants

1. EDUCATION LOAN

The most common source of funds for students looking to pursue higher education is an Education Loan. Study loans are easily available in India from multiple public banks, private banks, and NBFCs. With attractive rates of interest, simplified processes, tax benefits and flexible repayment options, education loans can be a saviour for students who can’t pay for their education. With the boost to their career prospects that the education would provide them, they could pay back easily in the future.

PROS:

– Loans are easily available from several public and private financial institutions. Depending on the amount you need to borrow, you may be able to avail a loan without any collateral as well

– Education loans make higher education accessible to people from all parts of society, thanks to government subsidies on loan interest for the financially underprivileged

CONS:

– Do remember, a loan is a debt that needs to be repaid, even if it is over a period of time

– It limits a student’s options to pursue further studies after their degree if they have an education loan, and necessitate their joining the workforce early

2. GRANTS

Scholarships and Grants are commonly confused terms used interchangeably. The word grant has a wide connotation and can refer to any sort of financial aid offered. In the education sphere, a grant is generally referred to a grant of money for a specified purpose.

These could be research grants to inspire students to focus their research on a specific field, or study grants encouraging students to join a certain university. The eligibility criteria for a grant is generally strict. That’s where the difference between Scholarships and Grants lie; in the limitation of their accessibility.

PROS:

– A grant is a monetary award that doesn’t need to be repaid

– There are grants for non-academic purposes as well. Non-Academic seekers can avail such grants

CONS:

– Since they’re for a specified purpose, they often come with strings attached

– Many grants are only offered to organizations and institutions rather than individuals

3. SCHOLARSHIPS

There are hundreds of scholarship opportunities for students to choose from, and thousands of crores of scholarship funds on offer for Indian citizens. You could qualify for a scholarship by virtue of your academic achievements, financial status, your social status, or even by your domicile or your religion. No surprises, hence, that scholarships are the most sought after financial aid by students pursuing higher education.

PROS:

– There are tons of available options for students to choose from with varying eligibility criteria. Using scholarship search engines like Buddy4Study can help students quickly identify all matching scholarships and grants as well.

– If you land a prestigious scholarship, it could cover your entire education expenses, including full tuition, boarding, lodging, living expenses, allowance, etc. The best part? None of it needs to be repaid!

CONS:

– Competition for most scholarships and grants is quite high, and you must prove your merit or need, depending on the scholarship’s eligibility criteria, before you can be awarded

– All Scholarship awards come with the requirement of necessary academic excellence. A scholar needs to maintain a certain academic performance so that the scholarship can be renewed every year

Abhishek Saluja

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