Pre-Algebra
Personal financial literacy
Methods of payment for college; scholarships and grants
20 practice questions
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Theory + worked examples
Methods of Payment for College; Scholarships and Grants
Texas Pre-Algebra (TEKS) • Standard 6.14(G) • Financial Literacy
Methods of Payment for College; Scholarships and Grants is a topic in Financial Literacy in the Texas Essential Knowledge and Skills. It is aligned to Standard 6.14(G), which requires students to compare methods of paying for college, including grants and scholarships.
College can be funded by grants and scholarships (no repayment), savings, and loans (repaid with interest).
Theory
College is paid for from several sources:
- Grants & scholarships: money that is not repaid.
- Savings: money set aside in advance.
- Loans: borrowed money repaid with interest.
Seek grants and scholarships first — they cost nothing to repay.
Sources of college funding.
Paying for college.
The trade-off:
\[\text{grants/scholarships: free}\quad\text{loans: repaid + interest}\]
Minimize loans to reduce future cost.
How to plan college funding
- Apply for grants and scholarships first.
- Use savings you have set aside.
- Borrow only the remaining need.
- Compare loan terms carefully.
Example 1 — No repayment
Which sources need no repayment?
Solution
Grants and scholarships.
Example 2 — Must repay
Which source must be repaid with interest?
Solution
Loans.
Example 3 — Scholarship basis
What are scholarships usually based on?
Solution
Merit or need (achievement or circumstances).
Example 4 — Best first
Which sources should you seek first?
Solution
Grants and scholarships, since they aren't repaid.
Common pitfalls
Loans must be repaid with interest.
Grants and scholarships are not repaid.
Borrow as little as possible.
Frequently asked questions
What is a grant?
Money for college that is not repaid.
What is a scholarship?
Award money, usually for merit or need, not repaid.
What is a student loan?
Borrowed money repaid with interest.
Which should I seek first?
Grants and scholarships.
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