A period of time schools use to measure a quantity of study. A school’s academic
year may consist of at least 30 weeks of instructional time during which a full-time
student is expected to complete at least 24 semester or trimester hours, or at least
36 quarter hours, at an institution that measures program length in credit hours;
or at least 900 clock hours at an institution that measures program length in clock
The day interest charges on an educational loan begin to accrue.
The official document, issued by the financial aid office, which states the type
and amount of financial aid the school is willing to provide should you accept admission
and register to take classes at that school.
See: Cost of Attendance (COA)
The process of adding unpaid interest to the principal balance of a subsidized loan
in forbearance, unsubsidized loans or PLUS loans, thereby increasing the total amount
to be repaid.
CITIZEN/ELIGIBLE NON CITIZEN
You must be one of the following to receive federal student aid:
- U.S. Citizen
- U.S. national (includes natives of American Samoa or Swain's Island)
- U.S. permanent resident with an I-151, I-551, or I-551C (Alien Registration Receipt
If you're not in one of these categories, you must have an Arrival Departure Record
(I-94) from the U.S. Immigration and Naturalization Service (INS) showing one of
the following designations:
- Asylum Granted
- Parolee (You must be paroled into the United States for at least one year and your
must be able to provide evidence from the USCIS that you are in the United States
for other than temporary purpose and that you intend to become a U.S. citizen or
- Cuban Haitian Entrant, Status Pending
- Conditional Entrant (valid only if issued before April 1, 1980)
- Victims of human trafficking, T-visa (T-2, T-3, or T-4, etc.) holder
Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands,
and the Republic of Palau are eligible only for Federal Pell Grants, Federal Supplemental
Educational Opportunity Grants, or Federal Work Study. You are NOT eligible for
federal financial aid if you only have a Notice of Approval to Apply for Permanent
Residence (I-171 or I-464A), or if you are in the U.S. on an F1, F2, J1, J2, or
G series visa.
A loan program that allows a borrower to combine multiple federal student loans
with various repayment schedules into one loan. With a consolidation loan the monthly
payment might be lower, repayment can be extended up to 25 years, and the interest
rate is fixed.
COST OF ATTENDANCE (COA)
The total amount it will cost you to go to school which is usually expressed as
a yearly figure. The COA is determined by law (Higher Education Act, Sec. 472) and
is not subject to regulation by the Department of Education. The COA is also known
as the Cost of Education or the Student Budget. The COA includes tuition and fees;
on-campus room and board (or a housing and food allowance for off-campus students);
and allowances for books, supplies, transportation, loan fees, and, if applicable,
dependent care. It also includes miscellaneous and personal expenses, including
an allowance for the rental or purchase of a personal computer. Costs related to
a disability are also covered. The COA includes reasonable costs for eligible study-abroad
programs as well. For students attending less than half-time, the COA includes tuition
and fees and an allowance for books, supplies, transportation and dependent care
expenses; but can also include room and board for up to three semesters or the equivalent
at the institution, but no more than two of those semesters or the equivalent may
Failure to repay a student loan according to the terms agreed to when you signed
a promissory note. For the FFEL and Direct Loan programs, default is more specific
– it occurs if you fail to make a payment for 270 days if you repay monthly (or
330 days if your payments are due less frequently). The consequences of default
are severe. Your school, the lender or agency that holds your loan, the state and
the federal government may all take action to recover the money, including notifying
national credit bureaus of your default. This may affect your credit rating for
as long as seven years. In addition, the Internal Revenue Service can withhold your
U.S. individual income tax refund and apply it to the amount you owe, or the agency
holding your loan might ask your employer to deduct payments from your paycheck.
Also, you may be liable for loan collection expenses. If you return to school, you’re
not entitled to receive additional federal student financial aid. Legal action also
might be taken against you. In many cases, default can be avoided by submitting
a request for a deferment, forbearance, or discharge or cancellation and by providing
the required documentation.
A period of time during which no loan payments are required and interest does not
accrue, unless you have an unsubsidized Stafford Loan. The most common loan deferment
conditions are enrollment in school at least half-time, inability to find full-time
employment (for up to three years) and economic hardship (for up to three years).
When you apply for federal student aid, your answers to questions in Step 3 of the
paper FAFSA, or in Step 2 of the electronic online FAFSA will determine whether
you are considered dependent or independent. All dependent students must report
parental income and assets as well as their own. If you’re considered a dependent
student, your parents are expected to contribute toward the cost of your education.
Federal student aid programs are based on the concept that a dependent student’s
parents have the primary responsibility for paying for their child’s education.
You may be considered independent for federal programs if you meet one of the following
If none of these conditions apply to you, you are a dependent student.
- You were born before January 1, 1984
- You are enrolled or will be enrolled in a master’s or doctoral degree program at
the beginning or the 2007-08 academic year
- You have children who receive more than half their support from you
- You have dependents (other than your children or spouse) who live with you and who
receive more than half their support form you at the you apply and through June
- Both your parents are deceased, or you are (or were until age 18) a ward or dependent
of the court
- You are currently serving on active duty in the U.S. Armed Forces for purposes other
- You’re a veteran of the U.S. Armed Forces.
The process by which financial aid funds are released and applied directly to a
A program of organized instruction or study that leads to an academic, professional
or vocational degree or certificate, or other recognized educational credential.
ENTRANCE LOAN COUNSELING
Direct or FFELP Stafford Loans first-time borrowers must complete a counseling session
prior to the first loan disbursement. This session provides you with a budget for
managing your educational expenses and helps you to understand your loan responsibilities.
For most federal student loans, you must complete a counseling session before leaving
school to make sure that you understand your rights and responsibilities as a borrower.
You will receive information regarding repayment and your loan provider will notify
you of the date loan repayment begins (typically six months after you graduate,
leave school or drop below half-time enrollment).
EXPECTED FAMILY CONTRIBUTION (EFC)
The measure of a family’s financial strength which indicates how much of your and
your family’s financial resources (for dependent students) should be available to
help pay for your education. The EFC is calculated from the information your report
on the FAFSA. The EFC is calculated according to a formula established by law. Your
EFC is report
ed to you on the Student Aid Report (SAR) you receive after you file
FREE APPLICATION FOR FEDERAL STUDENT AID (FAFSA)
The FAFSA is the only application that all students must complete to apply for federal
FEDERAL FAMILY EDUCATION LOAN PROGRAM (FFELP)
Education loans provided by private lenders and guaranteed by the federal government.
Subsidized and Unsubsidized Federal Stafford Loans and Parent PLUS and Graduate
PLUS loans are included in this program.
FEDERAL METHODOLOGY (FM)
The formulas used to determine a student's eligibility for federal Title IV funds.
The formulas take into account income, some assets, expenses, family size and other
factors. FM is written by Congress rather than a peer community assessment and is
not updated regularly.
FINANCIAL AID COUNSELOR
A representative of the Financial Aid Office that reviews a student's application
and awards aid, and helps the student in all aspects of the financial aid process.
FINANCIAL AID PACKAGE OR FINANCIAL AID AWARD
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.
The difference between what it costs to attend a particular college and the amount
it has been determined that a student and her/his family can afford to pay toward
those expenses. The term "demonstrated financial need" is typically used to describe
an assessment based on Institutional Methodology for undergraduate need-based, institutional
funding. The amount that an applicant can be expected to contribute is measured
according to standardized formulas. These standardized formulas include the federal
and institutional methodologies, and the 568 Consensus Approach.
An authorized period of time during which the lender agrees to temporarily postpone
a borrower's principal repayment obligation. Interest continues to accrue and usually
must be paid during the forbearance period. Forbearance may be granted at the lender's
discretion when a borrower is willing to repay their loan but is unable to do so.
A form of financial aid award based on need or merit that is not repaid by
The period between the time a borrower leaves school or drops below half-time and
the time they are obligated to begin repaying their loans - usually six or nine
months, depending on the type of loan.
The organization that administers the Federal Stafford Loan and Federal Plus Loan
programs in your state. The federal government sets loan limits and interest rates,
but each state is free to set its own additional limitations, within federal guidelines.
This agency is the best source of information on Stafford and PLUS loans in your
state. To find the name, address, and telephone number of the guaranty agency in
your state, as well as information about borrowing, call the Federal Student Aid
Information Center at 1-(800)4-FEDAID (1-800-433-3243).
An insurance premium deducted from the borrower's loan proceeds prior to disbursement
and paid to the guaranty agency that insures the loan. By law the fee cannot exceed
3% of the loan amount.
INSTITUTIONAL STUDENT INFORMATION REPORT
The Institutional Student Information Report (ISIR) is the name for the electronic
version of SAR's delivered to schools by the FAFSA processors.
A fee charged for the use of borrowed money. 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). As of October
1, 1992, all federal education loans made to new borrowers have variable interest
A financial institution (bank, savings and loan, or credit union) that provides
the funds for students and parents to borrow educational loans. Some schools are
Financial aid that is awarded based on a student's academic, leadership or artistic
merit, or some other criteria, and does not depend on financial need. Merit-based
awards may look at a student's grades, test scores, special talents, or extracurricular
activities to determine eligibility.
Financial aid that is awarded based on a student's financial circumstance. Need-based
aid can be awarded in the form of grants, loans, or work-study. Students who believe
their families will need help in supporting their educational costs are encouraged
to apply for need-based aid at the time they apply for admission to the College.
A process of reviewing a student's aid application to determine the amount of financial
aid a student is eligible for. Completing a needs analysis form is the required
first step in applying for most types of financial aid.
A borrower who has no outstanding (unpaid) loan balances on the date he/she signs
the promissory note for a specific educational loan. New borrowers may be subject
to different regulations than borrowers who have existing loan balances.
NATIONAL STUDENT LOAN DATA SYSTEM (NSLDS)
The National Student Loan Data System
(NSLDS) is the national database of information about loans and grants awarded
to students under Title IV of the Higher Education Act (HEA) of 1965. NSLDS provides
a centralized, integrated view of Title IV loans and grants during their complete
life cycle, from aid approval through disbursement, repayment, delinquency and closure.
A fee charged by the federal government and deducted from loan proceeds before disbursement
to partially offset administrative costs of the Federal Family Education Loan Program
A portion of the expected family contribution that is derived from the parents'
family income, assets, state and federal taxes, an allowance for family living expenses,
and the costs of other family members in college.
For undergraduate students, first baccalaureate degree only. Eligibility is based
on federal methodology. The amount of the award ranges from $400 to $4,310 subject
to Congressional appropriations, and will be reduced for students who enroll less
than full time.
Perkins Loans are for graduates and undergraduates who are enrolled at least half-time.
Awards are based on financial need as demonstrated by the information provided on
your aid application and on the availability of funds. Preference is given to students
with exceptional need and meet filing deadlines.
The amount borrowed. Interest is charged on this amount, and guaranty and origination
fees will be deducted prior to disbursement.
The legal document borrowers sign when they get an education loan. It lists conditions
under which the money is borrowed and the terms under which borrowers agree to repay
the loan with interest. Borrowers should keep the borrower copy of their promissory
notes until the loans are fully repaid.
Discloses the borrower's monthly payment, interest rate, total repayment obligation,
due dates and length of time for repaying the loan.
Financial aid self help awards are available via programs that require the student
to either repay the assistance or work for the assistance. Loans and Work-Study
are examples of self help awards.
SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT (SEOG)
Supplemental Educational Opportunity Grant for undergraduate students, first baccalaureate
degree only. Federal grant awarded based on a federal formula using data provided
in your aid application. Priority is given to students who are eligible for Federal
In addition to the amount parents are asked to contribute, students are also expected
to help meet a portion of their own educational costs each year. A student's minimum
contribution may come from prior year earnings, summer employment, savings, and
STUDENT AID REPORT (SAR)
A form sent to the student after submitting the FAFSA to the federal processor.
The SAR shows the information that was processed and indicates Pell Grant Eligibility.
The government pays the interest on the loan while the student is in school, during
the six-month grace period after the student leaves school, and during any deferment
periods. Subsidized loans are awarded based on financial need and may not be used
to finance the family contribution. The Perkins Loan and the Subsidized Stafford
Loans are subsidized loans.
With this loan, the government does not pay the interest while the student is enrolled.
The student has the option to either pay the accruing interest monthly or allow
the interest to capitalize (to be added to the principal). Either way, required
payments do not begin until 6 months after graduation or 6 months after the student
drops below half-time enrollment. Unsubsidized Stafford Loans are not based on financial
need and therefore may be used to finance the family contribution.
A process of review to determine the accuracy of the information on a student's
financial aid application. Students are selected for verification by the federal
Central Processing System (CPS) when their FAFSA applications are processed.