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What are Student Loans and Grants?

College is expensive, but that doesn't mean it's out of reach. Learn more about how student loans and grants are helping students all over the world attain college degrees.

May 18, 2021
  • Student Tips
What are Student Loans and Grants?

An overview of student loans and grants

While we often use the terms 'loans' and 'grants' interchangeably. Yet in the context of student loans, they’re not the same thing. Both serve the same goal: to make college more affordable. However, they are structured very differently.

Student loans refers to money borrowed for education that the borrower pays back over time, usually with interest. In the USA, these may come as part of a financial aid offer directly from their universities. Grants, however, are more like scholarships in that they don’t have to be repaid. This makes them more desirable than student loans.

Lastly, keep in mind some students may have a combination of loans and grants. In cases where students don’t receive a full ride via grant or scholarships, they may make up the difference with loans.

Loans and grants around the world

Just as the cost of college varies from country to country, so do student loans and grants. Here’s a look at some examples.

In the Netherlands…

The Netherlands has a government-run student finance scheme which is similar to others found throughout Europe. Called collegegeldkrediet, aka “the tuition fee loan”, this financial aid is available at a very low rate. It is designed to help students cover their tuition costs, as well as the cost of living. Depending on your resources, low-income students may also be eligible for cost of living allowances and healthcare allowances.

Students in the Netherlands can also apply for scholarships, and seek out private loans. However, international students are most likely to pursue this funding route because of collegegeldkrediet.

We mentioned the Netherlands has a similar approach to financial aid as other European countries. It’s also important to note EU citizens studying in other EU countries are eligible for the same fees and grants as nationals of that country.

In the UK….

What about in the post-Brexit UK, meanwhile? Since there’s so much uncertainty, the best thing to do is check the Gov.UK website to make sure you’re up to date or talk directly with universities in the UK.

In the US….

While college costs are much higher in the US, there are also many ways to pay for it, including grants, loans, scholarships, and work-study. Funding is also available from many sources, such as federal, state, school and private sources.

The US has also taken steps to promote greater racial equality by increasing funding available to minorities. This includes a recent movement by a Florida senator to expand an existing scholarship program to benefit the descendents of people who were impacted by the 1920 Ocoee Election Day Riot.

Additionally, the US is working to help college students who may be dealing with new financial hardships resulting from the pandemic. The Higher Education Emergency Relief Fund (HEERF) includes $6 billion allocated specifically for students in need of emergency financial aid.

Parents in the US who want to help their kids pay for college also have options, such as the parent PLUS loan. Designed for qualifying parents of undergraduate students, the funds can be used to pay for any eligible education-related expenses that aren’t otherwise covered.

In Canada...

The United States’ neighbor to the north, Canada, also has a robust student grant and loan program for full-time and part-time students.

Many people have student loans

If you do get a loan, you’ll be in good company. According to US News and World Report, there’s a very long list of famous actors, politicians and comedians who’ve borrowed money to attend college. Borrowers include Kevin Bozeman, Barack Obama, Michelle Obama, Gina Rodriguez, Miles Teller and Gabrielle Union.

While delivering a speech at a 2014 political rally on a college campus, actor Jon Hamm told students, “I went to three universities in four years, and I had financial aid at all. It wasn’t that long ago I was dealing with the stuff you guys are dealing with.”

Actress Jane Lynch also had loans. “I went to a public university that my parents helped pay for, and we supplemented with student loans. And I was out of debt by the time I was 30. And I deferred a few times,” she told US News & World Report.

Actress Kate Walsh took it a step further by calling for change, after dealing with living with massive college debt before getting her big break on Grey’s Anatomy when she was 37. “And that’s insane -- it was just interest accruing and accruing and accruing. And that just shouldn’t be the price tag of trying to get an education in this country,” she said.

While making sense of the specifics of student loans and grants can be tricky, taking the time to do so can prove worthwhile. If you aspire to a college degree, the funding is out there,wherever you are in the world.

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Joanna Hughes


Joanna worked in higher education administration for many years at a leading research institution before becoming a full-time freelance writer. She lives in the beautiful White Mountains region of New Hampshire with her family.

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