In terms of financial aid, what differentiates a grant from a loan?

A grant is a type of financial assistance that provides funds to individuals, typically for educational purposes, which do not require repayment. This means that once the grant has been awarded and the conditions are met, the recipient does not have to pay back the money. This is a key feature that makes grants highly desirable for students and others seeking financial aid, as they can support educational expenses without adding debt.

In contrast, a loan is borrowed money that must be repaid over time, often with interest. Since loans create an obligation for the borrower to return the funds, they can significantly impact an individual's financial future, especially if substantial amounts are involved. Understanding this fundamental difference helps individuals make informed decisions about financing their education or other needs, as it highlights the long-term implications of incurring debt versus receiving non-repayable aid.