What term refers to financial aid that provides free money to pay for tuition?

• A. Loan
• B. Work-Study
• C. Scholarship
• D. Grant

Answer: (D)

The main idea here is understanding which type of financial aid does not have to be paid back. A grant is money awarded to a student that does not require repayment, and it’s commonly given to help cover tuition and other education costs. Because it’s essentially “free money” from government programs or institutions, it fits the description in the question.

Loans must be paid back with interest, so they are not free money. Work-study provides earnings from a part-time job rather than a grant of funds. Scholarships also provide free money, often based on merit or other criteria, but the term most closely associated with tuition aid that does not have to be repaid—and is commonly described as need-based aid—is a grant.