Savings Vocab
The original amount of money deposited or invested before earning interest.
What is principal?
A bank account designed for daily transactions that allows easy withdrawals via debit card or check.
What is a checking account?
The acronym FAFSA stands for this federal aid application.
What is the Free Application for Federal Student Aid?
Financial aid given to students based on merit or need that does not have to be paid back.
What are grants or scholarships?
Money borrowed to cover college expenses that must be paid back over time with interest.
Answer: What is a student loan?
Interest calculated only on the initial principal amount.
What is simple interest?
The government agency that insures deposits in member commercial banks up to $250,000 per depositor.
What is the FDIC (Federal Deposit Insurance Corporation)?
The annual date on which the FAFSA generally becomes available for the upcoming academic year.
What is October 1st
The main federal need-based grant awarded to undergraduate students who demonstrate high financial need.
What is the Pell Grant?
A federal student loan where the U.S. government pays the interest while the borrower is in school full-time.
Answer: What is a Direct Subsidized Loan?
Interest calculated on both the initial principal and the accumulated interest from previous periods.
What is compound interest?
A savings certificate that earns a fixed interest rate over a set period, with a penalty for early withdrawal.
Answer: What is a Certificate of Deposit (CD)?
The metric calculated by FAFSA data that colleges use to determine federal aid eligibility (replacing the old EFC).
What is the SAI (Student Aid Index)?
A campus-based federal financial aid program where students work part-time jobs to earn money for college costs.
Answer: What is Federal Work-Study?
A federal student loan where interest begins accruing immediately upon disbursement, including while in school.
Answer: What is an Direct Unsubsidized Loan?
This type of savings account usually earns a higher interest rate than a traditional savings account, helping your money grow faster
high yield savings account
A fee charged by a bank when a transaction exceeds the available balance in an account.
Answer: What is an overdraft fee?
The login account credential that students and contributors create to access and sign federal student aid applications online.
What is an FSA ID?
A tax-advantaged savings plan sponsored by a state or state agency designed to save for higher education expenses.
Answer: What is a 529 Plan?
The standard grace period—in months—that students receive after leaving school or dropping below half-time before loan payments start.
Answer: What is 6 months?
This is when you earn interest on both the money you originally saved and the interest you have earned.
Compound Interest
The percentage metric that accounts for compounding and reveals the actual yield earned on a deposit account over a year.
Answer: What is APY (Annual Percentage Yield)?
Completing the Fasfa can help students qualify for these three types of financial aid to help pay for college
Grants, scholarships and loans
$500 Question: The federal metric representing the estimated total amount it will cost to attend a college for one year, including tuition, fees, housing, and books.
Answer: What is the Cost of Attendance (COA)?
This is the extra money you pay when you borrow money through a student loan
Interest