What type of financial aid does not need to be repaid?

Grants and scholarships are forms of financial aid that do not require repayment, making them highly desirable for students seeking financial assistance for their education. Grants are typically awarded based on financial need and can come from federal, state, or institutional sources. Scholarships, on the other hand, are generally awarded based on merit, such as academic achievement, talent, or involvement in extracurricular activities. Once awarded, neither grants nor scholarships require students to pay back the funds, allowing recipients to focus on their studies without the burden of debt.

In contrast, loans, including subsidized loans, are funds borrowed that must be repaid over time, often with interest. Work-study is a program that allows students to earn money while attending school, but this too is not free assistance; students must work for the funds they receive. Therefore, grants and scholarships clearly provide aid that doesn’t need repayment, distinguishing them from loans and work-study options.