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Allowance vs. Scholarship: What's the Difference?

Edited by Janet White || By Harlon Moss || Updated on November 7, 2023
Allowance is a sum of money given regularly for a specific purpose; a scholarship is financial support awarded to a student based on criteria like merit or need.

Key Differences

An allowance is typically a fixed amount of money given to someone regularly for general expenses or specific purposes. For example, "Parents give their children an allowance for doing chores," implies a small sum of money provided on a regular basis for personal expenses.
A scholarship is a form of financial aid awarded to students to help pay for their education, often based on academic or other achievements. As in, "She won a scholarship due to her excellent grades," which means she has been granted money specifically for her education costs due to her academic merit.
Allowances are usually given with some freedom regarding spending, often aiming to teach financial responsibility. For instance, "His weekly allowance was meant to cover lunch and transportation costs," suggests it is meant to help with everyday expenditures.
In contrast, scholarships are often tied to the cost of education, such as tuition fees, books, and sometimes living expenses, and are not typically meant for personal spending. For example, "The scholarship covered his tuition and dormitory fees," indicates that the funds are earmarked for specific educational expenses.
Allowances can come from parents, guardians, or employers as part of a wage package, and do not usually reflect the recipient's performance or needs. Conversely, scholarships are competitive and are awarded based on set criteria such as academic excellence, athletic skill, or financial need.

Comparison Chart


Regular sum of money for expenses or purpose.
Financial aid for education based on criteria.


Parents, guardians, employers.
Educational institutions, organizations.


Personal expenses, financial learning.
Covering education costs.

Criteria for Award

Typically none; discretionary or need-based.
Merit, need, or specific talents/abilities.

Amount Variation

Often fixed and small.
Can vary greatly.

Allowance and Scholarship Definitions


A sum of money granted to cover particular needs.
The children received a daily allowance during the trip.


A grant or payment made to support education.
The scholarship allowed her to attend the university without debt.


An amount given for a specific purpose.
The company provided an allowance for travel expenses.


Financial aid provided to a student based on academic achievements.
His outstanding test scores earned him a full scholarship.


An agreed quantity or rate.
The contractor added a 5% allowance for waste.


An award for a student to further education.
She received a scholarship from a local charity.


A sum of money allotted regularly for personal use.
She saved her weekly allowance to buy a new bike.


A fund endowed for the education of a student.
The endowment provides a scholarship to one student each year.


A financial entitlement, such as a deduction or rebate.
Taxpayers are eligible for a standard deduction allowance.


A monetary award for students to pursue academic goals.
The national scholarship funded his medical studies.


The act of allowing.


The methods, discipline, and attainments of a scholar or scholars.


An amount that is allowed or granted
Consumed my weekly allowance of two eggs.


Knowledge resulting from study and research in a particular field.


What is a scholarship?

It's financial support given to a student, often based on merit or need.

Can allowances vary in amount?

Yes, but they're often a fixed sum.

Who awards scholarships?

Educational institutions, foundations, or organizations.

What is an allowance?

It's a regular amount of money given for personal use or specific needs.

Who typically gives an allowance?

Usually parents, guardians, or employers.

Do scholarships need to be repaid?

Generally, no, scholarships do not need to be repaid.

Are scholarships always based on academics?

Not always; they can also be based on need or special talents.

Do allowances need to be repaid?

No, allowances are not repaid.

Can an allowance be used for anything?

Typically, yes, unless specified otherwise.

Is an allowance earned?

It can be, but often it's given without specific criteria.

Is a scholarship earned?

Yes, usually through academic performance or other achievements.

Must scholarship money be used for education?

Yes, it's designated for educational expenses.

Are scholarships taxable income?

They can be, depending on how the funds are used.

How often are allowances given?

They're usually given on a regular basis, like weekly or monthly.

Are allowances taxable income?

It depends on the context and local laws.

Can an allowance cover educational expenses?

Yes, if it's designated for that purpose.

How often are scholarships awarded?

They're typically awarded per semester or academic year.

Can an allowance be considered a wage?

If it's part of an employment package, yes.

Is a scholarship considered a wage?

No, it's considered financial aid.

Can someone receive multiple scholarships?

Yes, if they meet the criteria for each.
About Author
Written by
Harlon Moss
Harlon is a seasoned quality moderator and accomplished content writer for Difference Wiki. An alumnus of the prestigious University of California, he earned his degree in Computer Science. Leveraging his academic background, Harlon brings a meticulous and informed perspective to his work, ensuring content accuracy and excellence.
Edited by
Janet White
Janet White has been an esteemed writer and blogger for Difference Wiki. Holding a Master's degree in Science and Medical Journalism from the prestigious Boston University, she has consistently demonstrated her expertise and passion for her field. When she's not immersed in her work, Janet relishes her time exercising, delving into a good book, and cherishing moments with friends and family.

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