Which financial aid does not need to be repaid and is awarded based on academic excellence or financial need?

Scholarships are forms of financial aid that do not require repayment and are typically awarded based on academic excellence or specific criteria that may include financial need. They are designed to encourage students to pursue their education by providing financial support that alleviates the burden of tuition and other educational expenses.

Both grants and scholarships fall under the category of gift aid, which means they do not need to be paid back, but the distinguishing factor is that scholarships are primarily merit-based, often recognizing students for their academic achievements, talents, or extracurricular activities. While some grants are need-based and may not require repayment, they are generally associated with financial need rather than academic performance.

Fellowships are another form of financial aid that may not require repayment, but they often come with specific academic or professional requirements and typically target graduate students or those engaged in advanced study or research.

In contrast, loans, as the name suggests, are funds that students borrow to pay for their education and must be repaid, often with interest, making them fundamentally different from scholarships. Understanding these distinctions helps students consider their options when planning for financial assistance in their educational pursuits.