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What’s the Difference Between Student Loans, Education Grants, and Scholarships?

Domestic and international students: find out which financial assistance options are available to you for tuition costs at U.S. colleges and universities.

Need financial aid1 to earn your degree? You’re not alone. Take a look at these statistics:

The percentage of first-time undergraduates awarded financial aid for a full-time degree or certificate program at a 4-year institution during the 2016-2017 academic year was 85%.2

What’s the Difference Between Student Loans, Education Grants, and Scholarships?

Research by revealed that 72% of students enrolled in online degree or certificate programs receive financial help with tuition costs. More specifically, of those surveyed who received financial help:3

  • 31% paid with student loans and other financial aid exclusively.
  • 21% paid with personal funds and loans.
  • 8% paid with personal funds, loans, and scholarships.
  • 8% paid with personal funds and financial aid from employer.
  • 4% were fully subsidized by their employer.
  • 28% paid with personal funds exclusively.

What Kind of Financial Aid Can You Receive?

The research clearly indicates that a growing majority of those interested in pursuing higher education can’t afford college or graduate school without receiving financial assistance from grants, student loans and/or scholarships. Walden University, for example, offers diverse financial aid options to help domestic and international students achieve their educational goals.

Financial Aid for U.S. Students

  • Grants for College
    Grants, primarily from federal and state governments, are referred to as “gift aids” because, unlike student loans, you don’t have to pay them back. Grants for college are awarded on the basis of financial necessity and include:
    • Federal Pell Grants – A fundamental source of federal student financial aid, Pell Grants are awarded to students who have exceptional financial need and are enrolled in their first undergraduate program. Once students qualify for a Pell Grant, they can also be considered for additional types of financial aid.
    • Federal Supplemental Educational Opportunity Grants (FSEOG) – These grants come from the federal government. Schools receive FSEOG funds every year; money is allocated on a first-come, first-served basis to Pell Grant recipients needing supplemental financial aid.
    • Teacher Education Assistance for College and Higher Education (TEACH) Grants – Available for post-baccalaureate and graduate students, TEACH education grants are not based on financial need. Recipients must intend to teach a “high-need” subject in a school that serves a population of students from low-income families; to qualify, students must enroll in a program that is classified as eligible by their college or university.
    • State Grants – Grants for college may be available through the student’s home state government to help with educational expenses.

Federal and Private Student Loans for College

Unlike grants, student loans must be paid back. Graduate and undergraduate students who are enrolled at least part time may qualify for college loans. Loans carry certain requirements, and interest rates apply. There are five types:

  • Federal Direct Subsidized Loans – These loans are available only to undergraduate students and are based on financial need. Loan amounts are based in part on which school you attend. Interest starts to accrue immediately, but the U.S. Department of Education pays for your interest while you’re attending school.
  • Federal Direct Unsubsidized Loans – These student loans are awarded to graduates and undergraduates and do not meet financial-need requirements. Loan amounts are based in part on which school you attend and how much it costs to attend that school. Interest starts to accrue immediately and it is your responsibility to repay the loan, including all interest.
  • Federal Direct Parent PLUS Loans – Parents of undergraduate students who still qualify as dependents can receive these loans if the parents meet credit requirements. They can borrow up to the entire amount of tuition per year minus other awarded financial aid.
  • Federal Direct Graduate PLUS Loans – Graduate students who need additional funding beyond the unsubsidized loans can receive this loan if they meet the credit requirements. They can borrow up to the entire amount of tuition per year minus other awarded financial aid.
  • Private Loans – Funded by private institutions, these loans don’t usually offer the same advantages as federal loans and may have higher interest rates.

Education Scholarships

In contrast to grants (which are need-based) some scholarships are awarded to students who excel in different areas or meet certain criteria. For example, a student could receive a scholarship for being an exceptional athlete, a top student, a member of a particular church, or an employee of a company.

Every year, Walden University offers a significant number of scholarships for Walden undergraduate and graduate students who have made a contribution toward advancing positive social change in their community.

Financial Assistance for International Students

Walden also offers scholarship and tuition assistance opportunities to international students. In addition to Walden scholarships, international students may qualify for other types of financial assistance available in their native country or region.

Explore Walden University's financial aid options such as student loans, education grants and scholarships, and other funding options. Get the help you need to continue your education and advance your career goals. Earn your degree in a convenient online format that fits your busy life.

1For Washington State residents seeking information and resources about student loan repayment or seeking to submit a complaint relating to your student loans or student loan servicer, please visit or contact the Student Loan Advocate at [email protected].