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Financial Aid Glossary

Terms You Need To Know

Adjusted Gross Income (AGI)- all taxable income that is reported on a U.S. income tax return.

Assistantship- type of student employment usually referring to teaching assistant positions.

Award Letter- specific notification listing the amount of financial assistance offered to a student through financial aid programs to pay for educational costs.

Commercial Lender- commercial bank, savings and loan association, credit union, stock savings bank, trust company, or mutual savings bank that can also act as a lender for the Federal Family Education Loan Program (FFELP)

Cooperative Education (co-op)- college programs that offer paid opportunities to gain professional, full-time work experience while in college

Cost of Attendance- total amount needed to cover educational expenses, including tuition, fees, housing, food plans, books, supplies, transportation, and personal expenses

Default- failure of a borrower to make an installment payment when due or to meet other terms of the promissory note under circumstances where the secretary of education or pertinent guaranty agency finds it reasonable to conclude the borrower no longer intends to honor the obligation to repay

Deferment of Loan- period during which the repayment of the loan is suspended because the borrower meets certain eligibility requirements

Dependency Status- Students are classified as either dependent (requiring parent financial information) or independent (requiring only student/spouse financial information)

Direct Stafford Loan- Department of Educationís form of self-help financial aid; available through the Federal Family Education Loan Program

Disbursement- Process by which financial aid funds are made available to students for use in meeting educational and living expenses; funds may be disbursed directly to the student or applied to the studentís account

Disclosure Statement- Statement explaining specific terms and conditions of student's loans, such as interest rate, loan fees charged, gross amount borrowed, etc.; disclosure statements must accompany each loan disbursement

Educational Benefits- primarily federal funds awarded to certain categories of students (veteran or others deceased wage earners, and students with physical disabilities) to help finance their postsecondary education, regardless of their ability to demonstrate need the traditional sense

Expected Family Contribution (EFC)- amount of the familyís resources (income and assets) that the federal financial aid formula deems is available to help pay for school

Federal Direct Loan Programs (FDLP)- the collective name for Direct Subsidized, Direct Unsubsidized, and Direct PLUS programs

Federal Family Education Loan Programs (FFELP)- collective name for Federal Stafford (both subsidized and unsubsidized) and Federal PLUS programs

Federal Plus Loan for Undergraduate Students (PLUS)- federally guaranteed, low-interest for parents to assist with college costs; eligibility is based on credit worthiness (some colleges participate in a similar option called the Direct Loan Program)

Federal Pell Grant- federal grant program for undergraduate students who demonstrate financial need and have not yet completed a baccalaureate course of study

Federal Perkins Loan- low-interest federal loan for students with exceptional financial need; school is the lender

Federal Stafford Loan- federally guaranteed, low-interest loan that allows for the deferment of payment until the borrower leaves school

Financial Aid Administrator (FAA)- individual responsible for preparing and communicating information pertaining to student loans, grants or scholarships, and employment programs

Federal Supplemental Education Opportunity Grant (FSEOG)-
federal grants for undergraduate students with exceptional financial need (as determined by the college)

Fellowship- grant for post-graduate study that may require teaching or research

Financial Aid Package- total amount of financial aid a student receives, consisting of need- and non-need-based aid, such as grants, loans, and work-study jobs

Financial Need- difference between total college costs and a familyí's expected contribution

Free Application for Federal Student Aid (FAFSA)- form required of all students to apply for and determine need-based an other forms of aid

FAFSA Express- electronic method for students to apply directly to the department of education for financial aid

Grant- type of financial aid that does not have to be repaid; usually awarded on the basis of need

Guaranty Agency- state agency or private, nonprofit institution or organization that administers a student loan insurance program

Independent Student- student who has reached age 24, or who has not reached age 24 but is an orphan, a ward of the court, a veteran, married, a graduate or professional student, has legal dependents other than a spouse, or presents documentation of other unusual circumstances demonstrating independence to the student financial aid administrator

Internship- part- or full-time opportunity to gain professional work experience while in college; some interns are paid, while others gain college credit

Loan- advance of funds evidenced by a promissory note requiring the recipient to repay the specified amount(s) under prescribed conditions

Merit-Based Assistance- any form of financial aid awarded on the basis of merit and not based on demonstrated financial need

Need-Based Assistance- financial aid that considers a studentís financial situation

Packaging- process of combining various types of studentís aid in an attempt to meet a studentís need

Parentís Contribution- quantitative estimate of the parentsí ability to contribute to postsecondary educational expenses

Profile- application used by many colleges to gather information to help them award private, non-federal students aid funds

Promissory Note- legally binding document a student signs before receiving loan funds, defining the terms of the loan and obligating the borrower to repay the funds

Repayment Schedule- list of monthly loan repayments that outlines both principal and interest charges

Scholarship- form of financial assistance that does not require repayment or employments and is usually awarded to students who demonstrate or show potential for distinction, usually in academic performance, at the institution

Student Aid Report (SAR)- notification sent to the student as a result of filing the FAFSA

Truth-in-Lending Statement- document provided to loan recipients that outlines the interest rate and other information relative to the loan.

Work-Study Programs- Federal or institutionally funded employment programs that provide jobs for students to help them meet a portion of their educational expenses