Financial Aid Vocabulary


Average Percent of Need Met: On average, the percent of financial need that a college/university meets with a combination of grants, loans, and work. In general, more selective colleges/universities meet a higher percentage of need than less selective colleges/universities. Ideally, a college/university will meet a 100% of need. Even if a college/university meets 100% of need, however, it is important to distinguish whether the majority of their financial aid is disbursed in the form of grants, which do not need to be repaid, or loans, which do need to be repaid, and with interest.

 

Business/Farm Supplement: Form required by some colleges/universities for those families applying for financial aid who own a business or a farm or are otherwise self-employed. This form is available from the individual financial aid offices at the colleges/universities you are applying to.

 

College Scholarship Service/Financial Aid PROFILE (CSS PROFILE): Application required by many colleges/universities to apply for institutional financial aid. You should complete this form only if the colleges/universities to which you are applying require it. Unlike the FAFSA, and depending on your finances, you may be required to pay a fee for each school to which you send the PROFILE. Available online at profileonline.collegeboard.com.

 

Cost of Attendance (COA): The total amount it costs to attend a particular school, including tuition and fees, room and board, and allowances for books and supplies, transportation, and personal and incidental expenses.

 

Demonstrated Need: The difference between the total cost of attendance (COA) and the family’s estimated family contribution (EFC).

 

Dependency Status: Answers to specific questions on the FAFSA will determine a student’s dependency status and whether or not the parent’s/parents’ or guardian’s/guardians’ financial information is required. A parent or guardian refusing to provide support is not sufficient for the child to be declared independent.

 

Eligible Non-Citizen: Someone who is not a US citizen but is eligible for federal student aid nonetheless. Eligible non-citizens include US permanent residents who are holders of a Permanent Resident Card with I-151, I-551, or I551C, US nationals, holders of Arrival/Departure Record (I-94) who have been granted refugee or asylum status, and certain other non-citizens. Individuals who hold a student visa or an exchange visitor visa are not eligible for federal and state student aid.

 

Expected Family Contribution (EFC): The amount of money a student and his or her family are able to contribute to the cost of education based on a formula applied to the income, asset, and household size information supplied on the FAFSA.

 

Federal Direct Stafford Loan: See Subsidized Federal Direct Stafford Loan and Unsubsidized Federal Direct Stafford Loan.

 

Federal Methodology: The need-analysis system used by the US Department of Education to determine an applicant’s eligibility for federal financial aid. It is also used by some states and some colleges/universities.

 

Federal Pell Grant Program: Program that provides need-based grants to low-income undergraduate and certain postbaccalaureate students to promote access to postsecondary education. Unlike a loan, a Federal Pell Grant does not have to be repaid. The maximum Pell Grant for the 2012-2013 school year is $5550. The amount you receive depends on your financial need, cost of attendance, status as a full-time or part-time student, and plans to attend school for a full academic year or less. In order to be considered for a Federal Pell Grant, applicants must complete and submit their FAFSA. No other application is required.

 

Federal Perkins Loan: A low-interest loan for both undergraduate and graduate students with exceptional financial need. These loans are made through a college’s financial aid office. The school is the lender. Students must repay these loans.

 

Federal Supplemental Educational Opportunity Grant (FSEOG): Grants for undergraduates with exceptional financial need. Pell Grant recipients with the lowest Expected Family Contribution (EFC) will be the first students to be considered for these grants.

 

Financial Aid Package: Financial aid award. A student’s financial aid package typically consists of a combination of grants, loans, and work.

 

Free Application for Federal Student Aid (FAFSA): Application used to apply for US Government grants and loans, federal work-study, many state grants, and, for some schools, institutional financial aid. Every financial aid applicant must complete this form. Available online at fafsa.ed.gov.

 

Gapping: The practice of meeting less than a student’s full need. In other words, if a student’s expected family contribution (EFC) is $0 (meaning it has been determined that they and their family can afford to contribute $0 towards the student’s college education), a college/university can choose to meet only 90% (or some other percentage) of the student’s demonstrated need, leaving the student and their family responsible for the remaining 10%.

 

Grant (Federal, State, and Institutional): Financial aid awards that do not have to be repaid.

 

Half-Time/Full-Time: Typically, for undergraduate study, half-time is at least 6 credit hours or 12 clock hours per semester. Full-time is at least 12 credit hours or 24 clock hours per semester. Most financial aid programs require that the student be enrolled at least half-time to be eligible for aid. Some programs require the student to be enrolled full-time.

 

Institutional Financial Aid Forms: Forms required by some colleges/universities either in addition to or instead of the CSS PROFILE. Institutional forms vary considerably, with some covering only basic biographical information and others asking for detailed financial information.

 

Institutional Methodology: The need-analysis system used by colleges and universities to determine an applicant’s eligibility for institutional financial aid.

 

Loan: Financial aid award that must be repaid with interest.

 

Merit-Based Financial Aid: Grants or other aid awarded based on academic achievement, geographic, ethnic, or racial diversity, a particular talent (artistic, athletic, etc.), extracurricular involvement (community service, for example), or performance on scholarship examinations. Merit-based financial aid is not based on demonstrated financial need, although, in some cases, financial need is a consideration. Schools differ widely in the number and size of scholarships offered. Merit scholarships are also available from a wide variety of non-school groups or organizations, such as churches, corporations, and foundations.

 

Need-Based Financial Aid: Financial aid that is awarded based on demonstrated financial need.

 

Noncustodial PROFILE: Financial aid application required by some colleges/universities for those students whose parents are divorced or separated in order to determine how much the noncustodial parent can afford to contribute to their son’s or daughter’s college education. Your noncustodial parent should complete this form only if the colleges/universities to which you are applying require it. If your noncustodial parent is estranged or cannot fill out the form for a legitimate reason (as determined by the individual financial aid offices at the colleges/universities you are applying to), you should write and submit a letter explaining the circumstance and requesting the requirement to be waived. A noncustodial parent refusing to provide support is not sufficient for the requirement to be waived. Available online at ncprofile.collegeboard.com.

 

Rhode Island State Grant Program: Program that provides need-based awards ranging from $250-$700 to students pursuing an education at the postsecondary level. Applicants must submit their FAFSA by March 1st in order to be considered for a RI state grant. No other application is required.

 

Student Aid Report (SAR): The report generated after your FAFSA is processed showing the data that was entered on the FAFSA, your estimated family contribution (EFC), and the list of schools to which the data is to be sent.

 

Subsidized Federal Direct Stafford Loan: Students must demonstrate financial need in order to borrow through the subsidized Federal Direct Stafford Loan Program. The subsidized loan is a low interest, federally subsidized loan available to assist eligible students in financing the costs of attending postsecondary institutions. The US Department of Education pays the interest that accrues on the loan during the in-school, grace, and authorized deferment periods. Repayment begins six months after the student stops attending school on at least a half-time basis.

 

Subsidized Loan: A loan eligible for interest benefits paid by the federal government. The federal government pays the interest that accrues on subsidized loans during the student’s in-school, grace, authorized deferment, and (if applicable) post-deferment grace periods, if the borrower meets certain eligibility requirements.

 

Unsubsidized Federal Direct Stafford Loan: The student eligibility requirements are the same as those for the subsidized Federal Direct Stafford Loan except that the borrower is not required to demonstrate financial need. The unsubsidized Federal Direct Stafford Loan is a low-interest loan available to assist eligible students in financing the costs of attending postsecondary institutions. The US Department of Education does not subsidize interest; the student borrower is responsible for all interest that accrues on the loan from the date of the first disbursement. Payment of principle and accrued interest is not required during the in-school, grace, or authorized forbearance periods. Repayment begins six months after the student stops attending school on at least a half-time basis.

 

Unsubsidized Loan: The federal government does not pay the interest on this loan. The interest accrues on unsubsidized loans during the student’s in-school, grace, authorized deferment, and (if applicable) post-deferment grace periods.

 

Work: Portion of financial aid award that allows students to hold a part-time job during their time in college (usually ~10 hours/week). Money earned does not need to be repaid and is meant to supplement the student’s expenses while in college, including books, supplies, transportation, etc.

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