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What is the difference between a loan versus a scholarship? You hear these words thrown around before you go to college and it’s sometimes hard to know which is which. Hopefully this will help clear it up.
A loan, by definition, is “a thing that is borrowed, especially a sum of money that is expected to be paid back with interest”.
A scholarship, by definition, is “a grant or payment made to support a student’s education, awarded on the basis of academic or other achievement.”
The main difference between the two is that a scholarship you do not have to pay back while a loan you do.