In the world of financial aid, there are many different types of assistance and each serves a different purpose. Scholarships, grants, fellowships, internships, and student loans are not interchangeable. For each variety of assistance, there are different tax stipulations, service requirements and repayment expectations attached. When you are looking for financial aid know how to read what you’ve found, what the award requires and how it helps you achieve your college goals.
Scholarships are financial awards given to eligible students with no strings attached. If you win a standard scholarship your interaction with the scholarship provider ends when you get the check, unless the award is renewable. According to the IRS, if you are not in school for a degree, the scholarship is taxable. Scholarships used for tuition, fees, books, and supplies are not taxable. Any funds remaining after you’ve paid off your expenses are taxable. There should not be a service requirement or other stipulation attached to a scholarship, but always double check. Some scholarships require community service after receiving the award. Scholarships are offered in varieties such as sweepstakes, essays, or competitions for both traditional and non-traditional students.
Like scholarships, grants are cash awards that do not need to be repaid. There are federal grants, state grants, and private grants. Grants are often awarded to graduate students for research. The best-known undergraduate student grant is the federal Pell Grant. Grant decide if the money is used toward tuition, research costs or other expenses.
Fellowships are for graduate and professional students. Fellowships require students to perform research as part of the deal. Most fellowship packages include stipends on top of covering tuition. Fellowships are lucrative and competitive. Students with exceptional merit are the top-runners.
There is a huge difference between scholarships and internships. An internship is an opportunity to work with a business or organization where employees must have a degree before you graduate. There are some internships offer monthly stipends but a lot of internships are unpaid. Most professions today require that students have an internship in that field before they can be hired. Professionals in all fields agree that without an internship, they would not be in that position. When looking for an internship think about the time commitment, finances, and how the internship helps you towards your career goals.
Student loans qualify as financial assistance. Federal loans have the lowest interest rates. Loans are limited to financial need. Students who do not qualify for the Pell Grant but need financial aid have to take out loans. Interest and payments on certain federal loans does not start until at least 6 months after graduation.
Not all forms of financial aid are “free” money. Check out every option available, from college grants to student loans. Any form of financial aid will help pay for college. Remember, get as much free financial aid as possible before taking out loans.
Scholarships.com is a great place to start your search for free money for college. We match your interests with scholarships and foundation grants that fit that criteria. We keep you up-to-date on new scholarships and approaching deadlines. No matter what your college dreams are, Scholarships.com provides you with the tips and tools to get you where you want to be.
Latest College & Financial Aid News
May 6, 2021
by Izzy Hall
President Biden and Congress are debating on cancelling thousands of dollars in student loan debt. As that discussion continues to unfold, it’s worth noting that since the start of the coronavirus pandemic, student borrowers have collectively saved over $90 billion dollars in federal student loan debt. [...]
May 4, 2021
by Izzy Hall
A growing number of colleges and universities are requiring students to be vaccinated against COVID-19 in order to attend college this fall. More than 200 colleges across the country have made COVID vaccinations an official requirement for the Fall 2021 semester, including Rutgers University, Notre Dame, Cornell College and Duke. It’s a unique case for colleges who, while requiring students to have certain immunizations in the past, have not faced a challenge quite like COVID. [...]
April 29, 2021
by Izzy Hall
This Saturday, students across the country will be making a big decision: Where will they go to college? National College Decision Day is May 1st, when students formally accept admission at a college and make it official with a deposit. Last year, many schools pushed their decision day back from May 1st to June 1st, but this year most colleges and universities returned to the traditional May 1st date. [...]