Applying for college can be a confusing process. After you have been accepted you next need to learn about applying for financial aid. This is something that is completely foreign to first time students and first time parents of students. In fact, some parents wait so long to apply for their aid that there is nothing left for them in the pool. This scenario is frightening as it may cause the student to have to take a year of from college in order to get their finances in order. In addition, many students and parents do not know the difference between grants and loans. Knowing how these two things differ can determine whether or not the student is stuck with a hefty amount of debt upon graduation.
The major difference between grants and loans as it relates to financial aid is the fact that grants do not need repaid upon graduation and loans to. For example, if you get $10,000 in student loans you will be responsible for paying them back over the years to the lending institution. People are often stuck paying their loans back in excess of ten or more years after graduating. However, if you receive the same amount of money in grants you will not have to pay it back ever. Simply put, the grant money is free money that you can spend on your education without ever having to worry about repayment.
Another reason to choose grants over loans is that they are oftentimes easier to get. When you apply for a student loan there are various reasons why you may not get the loan. For example, you may not have good enough credit or you may already have too much debt. Furthermore, even if you get an adult to cosign for the loan you may still get rejected. If that person has too much debt or poor credit the loan will be denied. With student grants the biggest thing that you need to do is make sure that you qualify for the grant that is being offered and then apply accordingly. For example, if the grant is for minority women you will know right away whether or not you qualify for it. If you do, simply fill out the application and wait to hear if you have been awarded the grant or not. It should be noted, however, that grants can be somewhat competitive and not everyone that applies will be awarded the money.