Key differences between scholarships, loans and grantsVincent Tan
Key differences between scholarships, loans and grants
There are multiple ways to finance your tertiary education, which are typically categorised into two broad-based categories: (i) self-financed and; (ii) award. Self-financing typically comes from one’s own personal savings, from financial assistance from family members and from loans from financial institutions. Awards on the other hand include scholarships, grants and fee rebates. In this article, we shall be looking at the key differences between scholarships, loans and grants.
Scholarships are almost always merit-based. This means that successful applicants will need to display above-average competencies, examination scorings and generally be better than a pool of applicants. A scholarship is a form of award given to successful applicants without having to repay. However, there will be certain performance clauses that dictate the academic performance of the scholarship recipient throughout the tenure of the scholarship and also possibly some form of bond after the completion of studies.
In addition to that, some scholarships allow recipients to combine other scholarships as well. This typically works if one scholarship only pays for the tuition fee but not the living expenses. Most scholarships in Malaysia are quite open-ended in the sense that scholarships are given for a very wide variety of studies. It almost always covers popular courses as well as lesser known ones.
All in, to be awarded a scholarship in itself is a form of achievement. It can be proudly included in your resume that you were awarded a certain scholarship as it displays your ability to stay ahead of competition.
Grants are essentially free money, so to speak. It is not a form of reward as the main aim of a grant is simply to allow someone without the financial ability to pursue something. Grants are typically given by government agencies and by the university itself. Successful recipients typically fall into certain categories which would allow them to be entitled to it. The first category would typically favour recipients from lower income families and also from applicants from marginalised societies.
The second category would be to encourage enrolments in a certain field of studies which are not popular. These fields of studies are also typically longer than usual and require a significant amount of research and development.
Grants however are very limited and one cannot assume that the grant will be continued in subsequent years. Again, this is due to the fact that grants are free money given for specific purposes.
In Malaysia, there is no specific loan that caters for education fees. One of the closest forms of loan for education is in the form of a personal loan. Because these types of loans are unsecured and uncollateralised, the interest rates are generally higher than other types of loans. As the loan is being drawn down, there will be periodic payments (monthly repayment) which must be adhered to. This means that you will be paying for the loan during the duration of your studies and possibly even after.