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The basics
Study abroad : Student Finances

Student loans vs scholarships

There are so many terms you may hear when applying to university, it can get overwhelming. We clear up some of the confusion on the finance side of things with the difference between scholarships and loans.

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There are many exciting things to think about when applying to study abroad. You'll be thinking about your potential destination and course.

You may have your eye on a potential career as well. Perhaps not at the front of your mind is the financial implications and requirements of studying abroad However, sorting things out with your finances is critical.

You might not be able to attend your dream university without doing so. Once some research is done, you may find that it’s not as confusing as you initially thought. 

While researching, you'll find two terms coming up a lot. These terms are loans and scholarships.

But what are they, and how do they differ? We take a closer look. 

 

Loans 

 

What is a student loan? 

 

A student loan is a financial arrangement in which you borrow an amount of money to cover the cost of university. You are usually expected to pay this back once your studies are completed. The re-payment happens over an agreed period. Interest can be charged on the borrowed amount. This means you pay back slightly more than you loaned. Loans are one of the most common methods that students use to pay for university.  

 

Get more information on understanding student financial aid.  

 

Where can you get a student loan? 

 

In many countries, student loans are available from government bodies. Many of these have options for international students too. You can also apply for a student loan from a bank and insurance company.   

 

For example, in the UK international students have access to the same student loan options as British students, if you meet the same criteria. Other countries may do things differently, with places like the US offering a separate loan system aimed at international students studying at universities there. 

 

Interested in comparing the cost of studying abroad in Australia vs the UK

 

When do you pay a student loan back? 

 

This will depend on the length of your course, destination, and the terms of your loan. It's important to understand these terms conditions when applying and signing any documentation related to a student loan. 

 

Some loans require regular payments to begin right after graduation, while others will give you a grace period. Payments are usually monthly, with a minimum amount due each month.  

 

Like any loan, you can choose to pay it off sooner if you can afford to. Whether this is by increasing the monthly payment or paying off large amounts at times that suits you.   

 

 

Why opt for a student loan? 

 

While many students are fortunate enough to pay for their education outright, student loans allow a wider range of students from different backgrounds to access educational opportunities. 

 Universities also have information to help you decide which funding option would suit your needs.  

 

Read more about the cost of studying abroad.  

 

Scholarships 

 

What is a scholarship? 

 

A scholarship is a form of financial support offered to students in which money is awarded based on academic merit or academic potential. Scholarships can be awarded by a university or by a third party, such as an organisation or company.   

 

Each scholarship is usually unique and will have a set of application requirements or qualifying criteria. Make sure that you meet these before applying to avoid disappointment.  

 

Some scholarships require certain grades from students and only pay a part of the cost, while others will pay for the full amount. Unlike a loan, the money offered from a scholarship doesn’t need to be paid back. 

 

Discover some of the most surprising scholarships.  

 

Who is offered a scholarship? 

 

From supporting those with greater needs to rewarding high achievers, there are many reasons why a university or third party might offer scholarships to students. They aim to take the financial pressure off deserving students by offering them education without the added stress of paying the money back.  

 

Get top tips for a successful scholarship application.  

 

Can you apply for a scholarship? 

 

Yes, most universities offer scholarships to students and have a system in place where prospective students can apply to see if they are eligible, including international students.   

 

Although you may have already planned to take out a loan, fund it by yourself or get support from family, it’s worth seeing what you may be eligible for. This may change your decision on what university to attend. 

 

 

Are there any other benefits to getting a scholarship? 

 

Apart from attending university with more financial freedom, receiving even a partial scholarship looks great on a CV. It is a demonstration of your abilities as a student, which can impress potential employers

 

Most prospective students look forward to applying to university, with added excitement for when studying abroad. You must investigate how you will fund your studies as early as possible.  This will make the application process much smoother. Take the time to find out what is available to you, from loans to scholarships. 

 

Remember you can also find the perfect degree, as well as find out how much it will cost, using our course matcher tool. Do you want to know more about scholarships? Look at what scholarships universities around the world have to offer

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