Final answer:
Grants do not require repayment, while loans need to be paid back with interest. Subsidized loans have the interest covered by the government while the borrower is in school, while unsubsidized loans start accruing interest immediately. These financial options help individuals cover educational expenses.
Step-by-step explanation:
Grants and loans are two types of financial assistance available to individuals or organizations. The main difference between grants and loans is that grants do not require repayment, while loans need to be paid back with interest. Grants are typically awarded based on financial need or specific qualifications, such as academic achievement or research proposals.
Subsidized and unsubsidized loans, on the other hand, are both types of loans that need to be repaid. The key difference between them lies in how interest is handled. Subsidized loans are available to undergraduate students with financial need, and the government covers the interest while the borrower is in school. Unsubsidized loans, on the other hand, are not based on financial need, and interest begins accruing as soon as the loan is disbursed.
For example, let's say a student receives a grant of $5,000. They do not need to pay this money back and it can be used to cover tuition, books, or other educational expenses. On the other hand, if the student takes out a subsidized loan of $10,000, they will need to repay this loan in the future. The interest on the loan is covered by the government while the student is enrolled in school. If the student takes out an unsubsidized loan of $15,000, they will also need to repay this loan, but interest will begin accruing from the day the loan is disbursed.