Both “scholarship” and “financial aid” are describing money allowance to students and researchers to enable their engagement in study and research activities. Scholarships and different types of financial aids may be announced and provided by universities, foundations, associations and governmental organization.
Main difference between scholarship and financial aid
Though the terms “scholarship” and “financial aid” very often are used interchangeably the main difference between the two is that “scholarship” as a term and as a phenomenon in academic and educational industry is considered to be a component of “financial aid”. Thus “scholarship” is only a small portion of “financial aid”.
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Other types of financial aid are “fellowships”, “grants”, “travel grants”, “studentships”, “loans”, “tuition fee waivers”, “study allowances”, etc, but the “scholarship” remains the most popular type of “financial aid”. In some contexts and along different countries instead of the term “scholarship” the terms “bursary” and “stipend” are used.
Student loans for example are to support students financially to cover tuition fee costs and sometimes also living costs and are a type of financial aid, primarily provided by banks and other financial institutions and should be returned with percents within up to thirty years. In contrary to loans scholarships as well as grants and fellowships are gifts to students and researchers to cover their education and living costs without any obligation to return the money to the scholarship provider. Grants sometimes have the same meaning as the scholarships, but the main difference between the both is that the scholarships are only supporting individuals but grants are also available for organizations, such as federal grants to support universities and research institutes to make advancement in a specific research area - cancer research for example.
Other differences between scholarship and financial aid
Another important difference between “Financial aid” and “scholarship” is that if used separately and out of context “financial aid” may mean any type of financial aid, not necessarily financial aid for academic and educational purposes. For example if a title of the announcement is “World Bank Financial Aid” few people will assume that the mentioned financial aid is for educational purposes and most probably the above mentioned title would assume a financial aid for developing countries to foster economic growth. Contrary to this if the title of the announcement says “World Bank Scholarship” it will have no other meaning rather than a financial aid for education and research.
Moreover scholarships alongside with fellowships and grants are the only type of financial aid that can be named after someone or be provided by a foundation named after someone. For example it will not be correct to announce a “Gates financial aid” but it will be totally normal to announce “Gates scholarship”. Similarly Said Foundation does not announce an international financial aid program, but widely distributes an announcement of the “Said foundation scholarship program”.
In some contexts and along different countries instead of the term “scholarship” the terms “bursary” and “stipend” are used. In our next articles we will also discuss the differences between scholarship, grant, bursary and stipend.
To conclude “Financial aid” in the context of education is a term to describe any type of financial assistance to students and researchers to cover necessary costs of education such as the tuition fee, living costs and accommodation costs. Financial aid may be of different types and depending of the type it may be as a gift or as a debt, that should be returned within certain amount of years. Scholarship is a division of financial aid and only describes a financial assistance as a gift with no obligation to return the received money to the scholarship provider.