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← Lesson
Scholarships vs Loans — The Math
Question 1 of 7
Multiple choice
Why is a $5,000 scholarship worth more than $5,000 in student loans?
Scholarships are taxed differently and end up being worth less
A $5,000 scholarship means you need to borrow $5,000 less — and with interest, that loan would have cost about $6,500–$7,000 to repay over 10 years
They are equal — $5,000 is $5,000 regardless of the source
Loans accrue interest at a lower rate than scholarship savings
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