Loans, Scholarships & Grants for College

What are the differences between loans, scholarships and grants for college?

Along with family savings, loans, scholarships and grants will almost certainly be the three leading methods for funding your college education. But how are they different?


Grants are monetary awards which, like scholarships, do not need to be repaid. Generally, outright grants (such as Federal Pell Grants and institutional grants awarded by individual colleges and universities) are less widely available now than they were in past years. But when they are available, students should seek them out, since they amount to free money.

University scholarships

University scholarships are a form of financial aid that does not have to be repaid. Scholarships for college can be given based on a variety of criteria, ranging from academic merit to the student's financial need. Some are even awarded based on competitive essays or belonging to a particular ethnic group. No matter what the source might be, remember that it's free money for your education.

College loans

Finally, loans are borrowed funds which you (or your parents or guardians in the event of co-signed loans) are obligated to pay back over a certain agreed-upon period, with interest. They can be borrowed either from the government (generally that means the federal government), or from private sources such as banks or credit unions. Federal student loans, such as the Federal Perkins Loan generally come with more attractive interest rates and other terms, and are thus usually exhausted first. At some point, most students will have to rely upon private student loans to help fund their post-secondary education.

Get more help with education financing from Citizens Bank

Use our helpful scholarship search to locate any scholarships that you may be eligible for. After grants, scholarships and federal aid have been maximized, a private student loan is a good option to fill any remaining financing gap. Find out more information about Citizens Bank's Citizens Bank Student Loan™. If you still have questions, call a student loan specialist at 1-800-708-6684, and we'll help walk you through the process.

Additional student loan and college planning resources

How Do I Pay for My College Education?
What is the FAFSA?
What Type of Financial Aid is Right for Me?
Investment in an Education
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