Helps in higher education: Scholarships help more students to study. A scholarship helps degree students enter into higher education without dependency on student loan. On the other hand, vast numbers of scholarships are provided for those interested in research like PhD program and also post doctoral research. Thus fellowships help us acquire higher education and in academic progress.
Research and development: After college education, many students opt for jobs and least interested in research. But present level of progress and technology development was only possible due to research. So provision of scholarships let students opt for research which there by helps progress in research. The current research areas having better scholarships are in health sector, astronomy, material science, chemistry and agriculture.
Helps to Perform well: There is no doubt that scholarships always help students perform well. Because there is a compulsion that students can continue to avail fellowships based on their performance in previous semester. Students are put under test to prove themselves by performing in terms of grades and research publications. This might be one of the reasons why United States tops in number of Nobel Prize award recipients. U.S universities get better funding attracting talents from all over the world. For availing them the talent works very hard to prove them. So is the result.
The scholarships are quite handsome that there is no need to work on part time basis to make extra money. To make extra money, one can work over time for which they will be paid double usual rate. This further consolidates the work take up in research making them more focused in the area than wasting time by diverting mind.
Helps in broadening research and collaborations: Some universities participate in student exchange programs. This exchange exists in between universities of different nations. This is a way to enhance collaboration in between labs. Doing so can help labs access to resources unavailable in their countries. The resources include medicinal plants, culture & linguistic diversity, environment, agriculture, animals, birds, minerals etc.
For government, the research is a way to gain better technology and expert human workforce. Without scholarships or fellowships it would be difficult for students to take up research. Nuclear energy, networking (even Google search technology), medicine, enhanced agricultural output were possible out of research.