How do student grants differ from loans in funding education and impact on earnings?

How do student grants differ from loans in funding education and impact on earnings?

• A. Grants must be repaid with interest.
• B. Loans do not need repayment.
• C. Both grants and loans require repayment.
• D. Grants do not require repayment; loans do with interest; grants improve ROI.

Answer: (D)

Grants are gift aid that doesn’t have to be repaid, while loans are borrowed funds that must be repaid after you graduate and interest accrues on them. Because of that, grants lower the total cost of education and improve the return on investment (ROI) of your degree. Loans, on the other hand, add debt and ongoing interest costs, which reduce net earnings unless your future earnings are high enough to compensate for the debt. So the best summary is: grants don’t require repayment; loans do with interest; grants improve ROI.

Grants are gift aid that doesn’t have to be repaid, while loans are borrowed funds that must be repaid after you graduate and interest accrues on them. Because of that, grants lower the total cost of education and improve the return on investment (ROI) of your degree. Loans, on the other hand, add debt and ongoing interest costs, which reduce net earnings unless your future earnings are high enough to compensate for the debt. So the best summary is: grants don’t require repayment; loans do with interest; grants improve ROI.