Relating Income And Careers Practice Test

What is the difference between a student loan and a scholarship?

A student loan must be paid back, but a scholarship is not paid back. A scholarship must be paid back, but a student loan is not repaid. Both must be repaid with interest. Neither requires repayment.

Correct Answer:

A student loan must be paid back, but a scholarship is not paid back.

Explanation:

The main idea is whether the funds need to be paid back. A student loan is money you borrow to pay for education, and you must repay that amount plus interest over time after or during your studies. A scholarship is financial aid awarded for merit or need that helps cover costs and does not require repayment, as long as you meet the scholarship’s conditions (like maintaining a certain GPA or other commitments). So the difference is debt with a repayment obligation versus funds that don’t need to be paid back.

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