VirtualSC Personal Finance Practice Exam 2025 - Free Personal Finance Practice Questions and Study Guide

A scholarship is defined as financial aid that is awarded to students based on various criteria, which may include academic merit, talent, or financial need. One of the key characteristics of scholarships is that they do not need to be repaid, making them a valuable form of assistance for students pursuing higher education. This means that recipients can focus on their studies without the burden of future debt associated with loans.

In contrast, options that refer to financial aid requiring repayment, such as loans, do not fit the definition of a scholarship. Additionally, while some scholarships may use income as a criterion for eligibility, it is not a defining characteristic of all scholarships, since merit-based awards can be provided without regard to the financial situation of the applicant. Finally, while some government programs may offer cash for college expenses, this does not encompass all scholarships, as many are funded by private organizations, foundations, or educational institutions.