Which type of aid must be repaid?

Loans are a type of financial aid that must be repaid, often with interest, after the borrower has finished their education or ceases to be enrolled at least half-time. This repayment obligation distinguishes loans from other forms of financial aid such as grants, work-study, and scholarships, which generally do not require repayment.

Grants are typically awarded based on financial need and do not need to be repaid, making them a favorable form of aid for students. Work-study involves earning money through part-time employment while attending school, and while students may have to balance their work hours with their studies, there is no repayment requirement for the funds earned. Scholarships are generally awarded based on merit or need and, like grants, do not need to be repaid, providing crucial support to students pursuing their education.

By understanding that loans are the only type of aid among these options that carries a repayment obligation, students can better navigate their financial aid choices and plan accordingly for their educational expenses.