Tuition grants are often applied directly to the student's tuition bill, so that she never actually sees the money. When the funds are presented as cash, the student is required to turn over the money to the bursar or equivalent financial officer of the school. A tuition grant is designated only to cover tuition and cannot be used for other purposes, even school-related expenses.
Scholarships are similar to tuition grants in that they are often used to offset the tuition of the student who receives one. However, depending on the particular award and the amount of the award, scholarships may also be applied to room and board, as well as to books and related expenses. Like tuition grants, scholarships are often applied directly onto the student's tuition bill, so that he never actually sees the money.
Student loans have the disadvantage that they must be paid back. However, they are among the most flexible of financial aid sources. Student loans can be used for nearly all expenses a student may incur while in college, including tuition, room and board; or off-campus housing and activities, even automobile expenses. On the other hand, student loans may not lawfully be used for purposes that are illegal or are blatantly unrelated to college attendance.
Work-study wages are earned at on-campus jobs by students who are eligible for financial aid and who have (or wish to develop) skills that are valuable in the marketplace. Like student loans, work-study fees may be spent in nearly any way the student sees fit, as long as the expense is related to his actual attendance. Even the cost of trips home during school vacations may be covered with work-study wages.
Especially with loans, students should make wise use of financial aid funds, because of the need to pay the money back. Also, in some extreme cases, students have lost their eligibility to receive financial aid because of gross misuse of financial aid funds. There is even the possibility of criminal prosecution if it is found that students have used fraudulent means to obtain or spend financial aid funds.