COLLEGE TERMINOLOGY CHECKLIST
American College Testing (ACT): A need analysis service located in Iowa, responsible for
processing the FAFSA form, commonly known as the Free Application for Federal Student Aid.
ACT is also responsible for administering the ACT scholastic exam.
Academic Year (AY): Officially, a fiscal year runs from July 1 through June 30 and usually
consists of either semesters or quarters.
Accrued Interest: Interest that accumulates on loans and must be paid back at a later date.
Specifically relates to Federal PLUS loans and Federal Unsubsidized loans.
ADC or AFDC: Aid to Dependent Children or Aid to Families with Dependent Children.
Government benefit programs, similar to welfare programs.
Adjusted Gross Income (AGI): The income figure taken from the IRS income tax forms and
required on the various financial aid applications.
Advanced Placement: The Advanced Placement program is a series of internationally
recognized exams that allow you obtain first-year credit or exemption for many subjects.
Advanced Placement exams are offered for many subjects including Calculus, History,
Computer Science, Studio Art and more. It allows students to obtain credits toward a college or
university program while still in high school. The Advanced Placement exams are administered
by The College Board. Check out their website for more details.
Allocation: The amount of money given to an institution by the Department of Education for
the purpose of funding a campus-based program administered by that institution.
Asset Protection Allowance: An asset allowance used in the calculation of the Expected
Family Contribution.
Award Letter: The official means of notifying financial aid applicants of the assistance being
offered. The award letter shows the types and amounts of aid offered as well as specific
program information, student responsibilities, and the conditions that govern the award. It also
provides students with the opportunity to accept or decline the aid offered.
Award Year: The student receives aid from July 1 through June 30 of the following year.
Base Year: The period starting January 1 and ending December 31 of the year preceding the
application period.
Campus-based Programs: The term commonly applied to those U.S. Department of Education
federal student aid programs administered directly by institutions of postsecondary education.
Includes: Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant
(FSEOG), and Federal Work-Study (FWS) programs.
College Scholarship Service (CSS): Need analysis service, located in Princeton, NJ, which
distributes the Financial Aid PROFILE, a financial aid form used mostly by selective private
colleges. CSS also administers the SAT scholastic exam.
College Work-Study (CWS): A federally funded program that provides college monies to
students through employment in exchange for service to the university, state, or other agency.
Cooperative Education: In a cooperative education program, the student spends some time
engaged in employment related to their major in addition to regular classroom study.
Cost of Attendance -- the total of all costs a financial aid office estimates students will incur
during attendance at the college or university
Credit Hour: The unit of measurement some institutions give for fulfilling course requirements.
A credit in a school or college, usually representing one hour of class per week for one term.
Default: When a borrower fails to make payments on a loan, or has failed to comply with other
terms of the loan agreement.
Deferred Admissions: A student with financial, personal or work-related concerns can defer or
postpone their enrollment for up to one year.
Dependent Student: A student, under the age of 24, who is at least partially dependent on his
parents to provide support. The parents’ income and assets are assessed in determining the
expected family contribution.
Deferred: Contractually suspending the payment of a loan until a later period of time.
However, the interest will accrue (build up) and be added to the total repayment.
Deferment -- A temporary period during which a borrower is not required to make payments.
Deferments are more common in Federal loan programs rather than alternative loans.
For Subsidized Stafford Loan borrowers (and Perkins Loan borrowers), many deferments are
subsidized; meaning the interest that accrues on the loan during the deferment is paid by the
federal government. Some deferments are unsubsidized, meaning the borrower must pay the
interest that accrues.
Direct Costs -- Costs that the college or university directly bills to the student. Tuition and fees
are direct costs.
Dislocated Worker: A person who has been laid off from work, or who was self-employed
(such as a farmer) but is now unemployed because of poor economic conditions in the
community or because of a natural disaster. The dislocated worker status is determined at the
discretion of the financial aid officer.
Distance Education : If you do not want to attend a school in person or if you do not live near
an institution, it is still possible for you to complete a program. Many universities and colleges
offer distance education programs, which allow you to study through correspondence. Some
universities are even beginning to offer distance education programs through the internet using
the Web and E-mail. If you are interested in a distance education program, contact the school's
admissions or distance education office for details.
Early Action: The student can apply to a college by an early deadline to guarantee their
admission, without obligating themselves to attend that college.
Early Decision: The student can apply to a college by an early deadline to guarantee their
admission, but is obligated to attend that college under a binding contract.
Early Entrance: The student can be accepted, admitted, and enrolled prior to high school
graduation. Many colleges use this guarantee to attract better students.
Entrance Counseling -- An educational session that first time Stafford borrowers must fulfill
before the loan's proceeds can be disbursed. The Exit Counseling sessions provides these first
time borrowers basic information about student loans and the terms and conditions of the
Stafford Loan program.
Exit Counseling -- An educational session that Stafford loan borrowers must fulfill around the
time of graduate or separation from a college. The Exit Counseling session provides the
borrower detailed information about the loans he/she borrower, the company that will collect the
payment and the repayment alternatives that are available.
Expected Family Contribution (EFC): Amount of money a student (and spouse) or family is
expected to pay toward college education. Commonly referred to as the family’s “ability to pay”.
The EFC is calculated when the student submits a financial aid application. (FAFSA)
Federal Direct Student Loan Program (FDSLP) -- The program name for loans that are both
guaranteed and funded by the federal government. If your school is a "Direct Lending School",
your Stafford Loan is administered by the Federal Direct Student Loan Program (FDSLP). The
US government provides funds for “direct loans” directly to students and their parents through
their schools. Applications can be obtained from your school. Banks and guarantee agencies
are not involved in the process.
Federal Family Educational Loan Program: Federal college loan program in which the lender
and the administrator are a bank, credit union, or other private lender.
Federal Methodology: Formula developed by Congress and defined by statute, used to
assess both the parents’ and student’s income and assets in order to determine the Expected
Family Contribution. Does not consider the home or the family farm as an asset.
Federal Pell Grant -- a need based financial aid program funded by the federal government.
Students with an EFC less than $x are eligible for the Pell Grant. The amount of the award is
based on the student's enrollment level (full time, three-quarter time, etc.) and the cost of
attendance.
Federal Supplemental Education Opportunity Grant (SEOG) -- a need based financial aid
program funded by the federal government. Colleges receive an annual allocation of SEOG
and, within certain guidelines, develop an awarding policy for this fund.
Federal Work Study (FWS) -- Federally funded program that allows colleges and universities to
create campus based employment programs for financial aid recipients.
Financial Aid Budget: The Financial Aid Budget is a breakdown of how the college
determines the total cost of attendance.
Financial Aid Profile (PROFILE): An institutional information form distributed by CSS. Some
colleges may require the PROFILE in addition to the FAFSA to help them determine the
financial aid package.
Financial Aid Form Acknowledgement (FAFACK): A letter sent to the student telling him the
CSS has processed his PROFILE. Mailed separately from the Student Aid Report (SAR), the
acknowledgement gives the student a list of the colleges to whom the SAR was sent and which
ones require additional information (such as 1040’s, etc.) This form also allows the student to
request his financial information to be sent to additional or different colleges.
Financial Aid Form Need Analysis Report (FAFNAR): A report transferred electronically,
directly to the college from CSS. It contains information from the PROFILE.
Financial Aid Officer (FAO): The chief financial administrator at each college responsible for
determining financial aid packages.
Financial Aid Package: The total amount, and type, of aid that a student will receive from one
school. It can consist of a variety of programs including federal and state-funded grants and
loans, college based programs, and any additional aid programs the college may make
available to the student.
Financial Aid Transcript: A form used by post-secondary institutions to collect data about a
student’s prior attendance at other post-secondary institutions, financial aid awards that the
student received at the institution providing the transcript, and the status of certain eligibility
criteria involving default and repayments owed. All transfer students applying for aid must have
this form submitted by the school they attended.
Financial need -- the difference between a student's Cost of Attendance and Expected Family
Contribution. It is the amount of financial aid the student "needs" to afford attendance at a
particular college.
Free Application for Federal Student Aid (FAFSA): The only financial aid form used to
calculate the Expected Family Contribution (EFC), which is used to determine the amount of
federal and state funds the student is eligible to receive.
Full-Time: A student that is enrolled for at least 12 credit hours during a quarter or semester.
GPA: Grade Point Average.
Guaranteed Student Loan (GSL): Now known as the Stafford Loan.
Gift Aid: Financial aid that does not require repayment or work to be performed (i.e. grants &
scholarships).
Grace Period: The length of time that begins when a loan recipient graduates or ceases to be
enrolled on at least a half-time basis and ends when the repayment period starts, or, in some
loan programs, the period of time when a deferment ends and loan payment is scheduled to
resume. Loan principal need not be paid and interest does not accrue during this period.
Grants -- a type of financial aid award that does not have to be repaid. Grants are often made
based on an applicant's financial need or EFC
Graduate and Professional School Financial Aid Service (GAPSFAS): A need analysis
service dealing strictly with the graduate or professional student.
Guaranty Agency: A state or private institution or organization, which administers student
loan, insurance, or governmental guarantor programs for the federal government.
Half-Time: A student that is enrolled for at least 6 credit hours during a quarter or semester.
Housing Index Multiplier Table: A verification formula used by the FAO to determine the
value of a home based on a national average. The formula uses the year the home was
purchased and the purchase price to establish a current value, referred to in government terms
as the Implicit Price Deflator.
Independent Student: A student NOT dependent upon his parents for support, and fits one of
the following profiles exactly: 1. is at least 24 years of age by December 31st of their upcoming
college academic year. 2. has a legal dependent, other than a spouse. 3. is a ward of the court
or both parents are deceased. 4. is a veteran of the U.S. Armed Forces. 5. is married. 6. is a
graduate or professional student. 7. is judged independent by the Financial Aid Officer due to
unusual circumstances.
Indirect Costs -- Costs associated with a student's enrollment that are not billed by or incurred
through the College. Transportation and miscellaneous costs are indirect costs.
Institutional Methodology: An alternative method of needs analysis, used mostly by private
colleges, to take a more detailed look at the family’s income and assets, prior to disbursing their
own grants and scholarships. Considers the home and the family farm as an asset.
Loans: financial aid awards that the student (or other party like a parent, for example) borrows
from a lender, the school or other third party. Loans must be repaid by the borrower according
to the terms of a promissory note, usually with interest.
Loan Servicer -- Once a loan has been approved and disbursed, by the lender or the
guarantee agency, it is usually transferred to a servicing company. This is a company that is
responsible for managing your account while you are in school and during repayment. You will
repay the servicing company until the loan is paid in full. Any questions or repayment issue
should be addressed to the servicing company. However, if you are having problems with the
servicer, you should contact your lender for additional assistance.
Merit-based Aid: Financial aid that is awarded to a student based primarily on any special
talents that the student might have (i.e. academics, athletics). May also be referred to as non
need-based aid.
Need: The difference between the Total Cost of College and the family’s Expected Family
Contribution.
Needs Analysis Form: Form completed by an applicant and family for a need analysis service.
The form collects data for the need analysis computations. The most common forms are the
FAFSA and the PROFILE.
Need-based Aid: Financial aid that is awarded solely on the financial need of the student and
his family.
Off-Campus Student: Student who lives in a house or apartment during the academic year, as
opposed to living on campus. Used as a budget classification.
On-Campus Student: Student who lives in institutional housing during the academic year.
Used as a budget classification.
Open Enrollment : Policy of admitting any high school graduate to college in an effort to
provide higher education for all who desire it. To critics this means lowering of standards, since
considerable effort must be devoted to teaching basic skills. The most ambitious programs were
established in California and New York City. In the 1980s many educational institutions partially
reversed such policies and increased admission requirements. This is the same as Open
Admission.
Origination fee -- A fee the borrower pays to the lender for originating a student loan. It is
charged to the student, and deducted from the loan proceeds, prior to disbursing the balance to
the college. Origination fees are most often associated with Federal Stafford, PLUS and Federal
Direct Student loans. The maximum origination fee for these federal loans is 3% of the loan's
principal balance.
Parent Contribution (PC): Based on the parents’ income and assets, this is one of two factors
used to determine the Expected Family Contribution or EFC (PC + SC = EFC). The PC is
calculated from information on the FAFSA.
Pell Grant: Grant program funded by the federal government. The maximum award is set
annually. Limits change from year to year. The Pell Grant Award is figured by subtracting the
Expected Family Contribution from the maximum Pell Grant award.
Perkins Loan: A need-based, 5% loan subsidized by the federal government. Repayment
starts six months after the student graduates or leaves school.
PLUS Loan: Parent’s Loan for Undergraduate Students A federally guaranteed loan
program that allows parents to borrow funds to help pay educational expenses. This parent
loan is not a subsidized loan. The principal and interest must be repaid immediately, or can be
deferred (but will accrue interest) until graduation, then full payments must begin. The program
does require the borrower to pass a simple credit check. The loan's interest rate is variable, but
new loans have a maximum interest rate of 9%.
Professional Judgment: A rule that allows the Financial Aid Officer to make a personal
decision to adjust the Expected Family Contribution, based upon unique or special
circumstances, to allow a more accurate assessment of the family’s financial condition.
Regular Admissions: The student applies for admissions under normal deadlines.
Remediation: Students who are not fully prepared for college academically are often required
to complete remedial classes. The courses are designed to bring the student up to the level
required for satisfactory college-level performances. Such courses are usually not granted credit
towards graduation.
Rolling Admissions: The student can apply for admissions at various times during the year
and is under no deadlines.
Satisfactory Academic Progress: Progress required of a financial aid recipient in acceptable
studies or other activities to fulfill a specified educational objective.
Scholarships: a financial aid award that does not have to be repaid. Scholarships are generally
made based on an applicant meeting certain eligibility criteria.
Selective Admissions: Procedure used by colleges and universities who admit a set
percentage of their applicants for admission. Minimum academic qualifications are required
along with other qualitative standards.
Self-help: Aid that must be repaid either through financial obligation or service to the university
or the state (i.e. loans, work-study).
Simplified Need Test: A formula that is an exception to the Federal Methodology. Parents
and students that earn under $50,000 of Adjusted Gross Income per year and file a 1040EZ or
1040A tax form can use the Simplified Need Test. This test does not include the parents’ or the
student’s assets when determining the EFC.
Stafford Loan -- a federally guaranteed loan program that allows students to borrow funds from
lenders. Stafford loans allow the student to defer payments while he/she is in school. The
interest rate for new Stafford Loans is variable but will not exceed 8.25%.
Student Aid Report (SAR): The official results from processing the student’s Free Application
for Federal Student Aid (FAFSA). The report shows the official Expected Family Contribution
(EFC). It must be submitted to the financial aid office, at the institution the student chooses to
attend, in order for the student to receive payment under the Pell Program or other types of
need-based aid.
Student Contribution (SC): Based on the student’s income and assets, this is one of two
factors that determines the Expected Family Contribution or EFC (PC + SC = EFC). The SC is
calculated from information on the FAFSA.
Subsidized Stafford Loan: A need-based, low-interest loan that is subsidized by the federal
government. Interest and payments on the loan do not begin until after the student graduates or
leaves school.
Supplemental Educational Opportunity Grant (SEOG):
A grant for extra needy
undergraduate students. SEOGs are granted in the $100 to $4000 range. The college
determines how these moneys are distributed.
Supplemental Loan for Independent Students (SLS): A loan available to both graduate and
undergraduate, independent students to help finance college costs. Includes the total amount
that a student will need to spend to attend a college for one year. It includes tuition, room and
board, transportation and commuting costs, books and supplies, and miscellaneous personal
expenses (pizza!).
Unmet Need: When the student’s total financial aid award does not equal 100% of the official
calculated need.
Unsubsidized Stafford Loan -- the Unsubsidized Stafford Loan is a non-need based loan
program, so students with no financial need can even qualify for this aid program. Interest that
accrues on Unsubsidized loans must be paid by the borrower, even while he/she is in school.
The borrower may make periodic payments (monthly or quarterly, depending on the lender's
policy) or allow the interest to accrue throughout enrollment and have the interest "capitalized"
(added to the loan's principle balance). While capitalization eliminates having to make payments
while in school but increases the total cost of a loan.
Verification: The process of checking the accuracy of the information supplied by students
when they apply for federal student aid. Colleges are required by the federal government to
verify 30% of their aid applications.