Financial Aid Terms
A letter from the college financial aid office that is sent to the student listing all financial aid awarded to the student. Award letters vary among institutions, but they generally list the expected family contribution, cost of attendance, and the terms of the aid awarded.
What is an "Award Letter"
This term applies to loans. It is the failure to repay a student loan according to the terms of the loan. If you default, your school, the organization that holds your loan, the state, and the federal government can all take action to recover the money, including notifying national credit bureaus of your default.
What is "Default"
A fee charged when you take out a loan. Interest is calculated as a percentage of the principal loan amount. The rate may be constant throughout the life of the loan (fixed rate) or it may change at specified times (variable rate).
What is "Interest"
My parents make too much money to qualify for any aid.
This is the biggest myth of all and the most dangerous. There are no income limitations on aid. While a family with significant income may not be eligible for need-based aid, there are dozens of strategies available to lower the cost of college.
The student’s cost of attendance includes tuition, fees, and a standard allocation designed to cover reasonable living expenses while attending school. The cost of attendance is determined by the school using guidelines established by federal regulations.
What is "Cost of Attendance"
Federally sponsored loan programs, which include the Stafford Loan and the Parent PLUS Loan (for parents of undergraduate students)
What is "Federal Direct Student Loan Program"
A form sent to the student after submitting the FAFSA. The SAR shows the information that was processed and indicates Pell Grant eligibility.
What is "Student Aid Report (SAR)"
I am going to pay for college myself, so it doesn’t matter how much money my parents make.
Most need-based financial aid is based on parents’ income and assets. Most schools require students to fill out the Free Application for Federal Student Aid (FAFSA) in order to qualify for need-based aid. That form asks for parent’s income information.
The Free Application for Federal Student Aid determines a student’s financial aid. Apply online at www. fafsa.gov. Forms may be filed any time after October 1, of the year for which the student is seeking aid. October of the senior year will be the first opportunity for high school students to apply.
What is a "FASFA"
An opportunity for a student to work part-time and attend college. Work-study is designed to help students fund their college.
What is "Work Study"
Financial aid that is awarded based on a student’s financial circumstance. Needbased aid can be awarded in the form of grants, loans, or work-study
What is "Need-based Financial Aid"
: You can wait until you get accepted to a college before worrying about financial aid.
Most financial aid is distributed on a first-come, first-served basis. Planning should start junior year for what sources of financial aid you will apply to. There are some scholarships that are available to juniors, so starting early may mean more money for college.
The amount by which your family’s contribution falls short of covering your college expenses. It is determined by subtracting the expected family contribution (EFC) from the total cost of attendance
What is "Financial Need"
Financial aid that does not have to be paid back, such as scholarships and grants
What is "Gift Aid"
The total amount students and their families are expected to pay toward college costs. This is determined from family and student income and assets for the prior year. The amount is derived from a need analysis of the family’s financial circumstances.
What is "Estimated Family Contribution (EFC)"
You can get more scholarships or financial aid for college by paying someone to search for you.
Beware of any group or individual that guarantees a scholarship or financial aid if you pay a fee. These groups utilize high pressure tactics to get parents to pay for a service they don’t need.
A type of financial aid award based on need or merit that does not require repayment
What is a "Grant"
The total financial aid a student receives. Federal and non-federal aid, such as grants, loans, work-study, and scholarships, are combined in a “package” to help meet the student’s need.
What is "Financial Aid Package"
Financial aid that is awarded based on a student’s academic, leadership, or artistic talent, or some other criteria. Merit-based aid may consider a student’s grades, test scores, special talents, or extracurricular activities to determine eligibility.
What is "Merit-Based Aid"
You have to be very poor, very smart, or uncommonly talented to qualify for financial aid.
Financial aid comes in many forms—grants and scholarships, which don’t have to be repaid, and loans, which do have to be repaid.