Financial aid glossary
Applying for financial aid? You probably have some questions about what
all those terms mean. Here are your answers.
Award letter: Official document that breaks down all financial aid by amount, source and type of aid. You may either accept or decline each source of aid.
Campus-based aid: Financial aid administered by the university. The federal government gives the college or university a fixed annual allocation of funds to disperse to eligible students.
Default: If a borrower is 120 days late on payments on a private loan or 270 days late on a federal loan, they are considered to be in default. At that point, actions may be taken against them to collect the money.
Deferment: Borrowers may apply for permission to postpone repaying the loan during a specified deferment period. The federal government will pay the interest charges for a subsidized loan during the deferment period, but with an unsubsidized loan you are responsible for payments that accrue during the deferment period.
Entitlement programs: Funds are given to a qualified applicant for a set amount regardless of what school he or she attends. The best-known example is the Pell Grant.
Expected Family Contribution: Estimate of the amount the student (and/or parents) should be able to pay toward expenses. It is in the form of a number between 0 and 99,999; the lower the number, the higher the financial aid amount.
Free Application for Federal Student Aid: FAFSA is a unified application administered by the federal government to administer financial aid. Used to apply for Pell Grants and other need-based aid.
Grant: Financial aid that you do not have to pay back. Grants are given by the federal or state government based on financial need.
Independent: A student at least 24 years of age as of Jan. 1 of the academic year, who is either: married, a graduate or professional student, an orphan or ward of the court, a veteran of the U.S. Armed Forces or in charge of a legal dependent.
Need: Most government financial aid is need-based. It is calculated by subtracting expected family contribution from the cost of attendance at the school.
Pell grant: Federal grant to eligible undergraduates that provides funds of up to $5,550 for both the 2010-11 and 2011-12 award years. It is based on financial need and does not have to be repaid.
Scholarship: Funding offered by government agencies, schools and nonprofit organizations that does not need to be paid back.
State Student Incentive Grants: SSIG is a financial aid program for state residents. The state-run program receives matching funds from the federal government to help with the funding.
Student Aid Report: SAR is a report that summarizes what is included in the FAFSA and must be given to the school’s financial aid office. You should receive a copy four to six weeks after filing the FAFSA; it will indicate Pell grant eligibility and the Expected Family Contribution. Keep a copy for your records.
Supplemental Education Opportunity Grant: An?SEOG?is given to students with exceptional need; this grant of up to $4,000 per year is given to students who qualify for Pell grants.
TEACH Grant: The Teacher Education Assistance for College and Higher Education Grant is for students who plan to teach in schools that serve low-income students in a high-need field. Students must agree to teach full-time for at least four years.
Yellow Ribbon program: Provides additional benefits to veterans who are eligible at the 100% benefit level of the Post 9/11 GI Bill. An approved school will contribute half of the amount needed above what the GI Bill covers, and the Veterans Administration will match the school’s contribution.
Read the full dictionary online at EducationOption.com.