Financial Aid Glossary

We know there is much information to understand regarding financial aid. Please access the financial aid glossary on the Federal Student Aid website for help.

Here are some additional terms that you may have questions about, too.

Accruing Interest (on a loan): The cost of the loan, represented by the interest that is added to the loan amount prior to the repayment period or prior to a payment installment.

Adjusted Available Income: The portion of family income remaining after deducting federal, state and local taxes, a living allowance, and other factors used in Federal Methodology.

Aggregate Loan Amounts: The total amount of federal loans a student may borrow for undergraduate and graduate study. When a student reaches their aggregate loan limit, they are no longer eligible to receive additional loans.

Assets: Cash on hand in checking and savings accounts; trusts, stocks, bonds, other securities; real estate (excluding the home you live in), income-producing property, business equipment, and business inventory. Assets are considered in calculating the Expected Family Contribution (EFC).

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. Campus-based programs include Federal Perkins Loan, Federal Supplemental Education Opportunity Grant (FSEOG) and College Federal Work Study (CFWS). The Federal Department of Education allots different amounts to each institution annually.

Central Processing System (CPS): The computer system to which the student's need analysis data is electronically transmitted by the FAFSA processor. The Central Processing System performs database matches, calculates the student's official Expected Family Contribution (EFC) and generates the Student AID Report (SAR).

Cost of Attendance (COA): The estimated cost of attending this institution for one academic year. This can be average cost of attendance. This amount includes the following:

  • Expected charges for one year of tuition and fees
    • Tuition: Charges assessed for classes
    • Fees: Charges assessed for other college services
  • Room and board for resident students
  • Estimated living expense (allowance for rent, utilities, and food for off-campus living)
  • Estimated transportation costs
  • Estimated books and supplies
  • Miscellaneous costs (including personal)

Deferred Action for Childhood Arrivals (DACA): DACA students are a subgroup of a larger group defined as undocumented students or, sometimes referred to as "Dreamers" (derived from the DREAM Act). Students that qualify for deferred action generally come to the United States as a child and must meet certain guidelines as outlined on the U.S. Citizenship and Immigration Services web site, under Deferred Action for Childhood Arrivals (DACA). Deferred action is granted on a case-by-case basis according to DACA guidelines.

Direct Costs: Expenses the student/family pays directly to the college.

Enrollment Level: Level of the degree-granting program in which a student is enrolled. Basic levels of enrollment include: undergraduate (students seeking an associate's degree, a certificate, or a baccalaureate degree); post-baccalaureate (such as teacher certification); graduate (students working on a master's degree or professional degree); and post-graduate (such as students enrolled in a doctoral program). The amounts and types of financial aid a student is eligible for is determined, in part, by their enrollment level.

Enrollment Status: Academic workload (or course load e.g. an amount of credits), as defined by the institution, that a student is carrying for a defined academic period. This normally relates to the number of credit hours or clock hours taken by a student during a given academic period, which determines a student's enrollment status (part time/full time).

Expected Family Contribution (EFC): A measure of how much the student and his or her family can be expected to contribute to the cost of the student's education for the year; the EFC is calculated according to a formula specified in federal law and is based upon the information provided during the FASFA filing process.

Family Educational Right to Privacy Act (FERPA): A Federal law that protects the privacy of student education records. The law applies to all schools that receives funds under an applicable program of the U.S. Department of Education.

Federal Direct Student Loan: Loan funds provided to the student by the U.S. Department of Education, through the school. Repayment of principal begins six months after the borrower ceases to be a student on at least a half-time basis, graduated, or completely withdrawn from the school. The Free Application for Federal Student Aid (FAFSA) is the annual application. There are two types of Federal Direct Student Loans: subsidized and unsubsidized. Students with financial need can qualify for a subsidized loan, and the government pays the interest on the loan while the student remains enrolled at least half time. Students who do not demonstrate financial need will qualify for an unsubsidized loan where interest accrues while the student is in school. Repayment on Federal Stafford and PLUS loans are generally a 10-year window of repayment. Repayment options are available for other time-frames, if the borrower qualifies.

Federal Grad PLUS Loan: Federal loan funds provided to graduate students by the U.S. Department of Education, through the school. This federal loan program allows graduate students with no adverse credit history to apply for up to their COA each year, less any financial aid. To be eligible, the student must be enrolled at least half time in an eligible program of study and first borrow the maximum allowable through the Federal Direct Student Loan program. Repayment of principal and interest begins 30 to 60 days after the loan is fully disbursed with deferment and forbearance options available.

Federal Parent Loan (PLUS): A federal loan program that allows parents who have no adverse credit history to apply for up to the remaining COA each year, less any financial aid. PLUS loans must be repaid with interest.

Federal Pell Grant: A grant provided by the federal government to qualified undergraduate students who demonstrate exceptional financial need and have an EFC below a threshold designated annually by the U.S. Department of Education, based on the amount of program funds appropriated by Congress.

Federal Perkins Loan: A low interest loan for educational expenses provided by the federal government for qualified individuals with exceptional financial need as defined by the institution. The Federal Perkins Loan needs to be repaid with interest once the student is no longer enrolled at least half-time, completely withdraws, or graduates.

Federal Supplemental Educational Opportunity Grant (FSEOG): One of the campus-based programs; grants to undergraduate students of exceptional financial need who have not completed their first bachelor's degree and who are financially in need of this grant to enable them to pursue their education. Priority for SEOG grants must be given to Pell Grant recipients with the lowest EFCs.

Gift Aid: Funds awarded to the student that do not have to be repaid, unless the student fails to meet certain terms, such as a service requirement, specified as a condition of the grant. Gift aid includes awards with titles such as grants, scholarships, remissions, waivers, etc. Gift aid can be awarded based upon many factors, including (but not limited to) financial need, academic excellence, athletic, musical, and theatrical talent, affiliation with various groups, or career aspirations.

Grant: Gift aid awarded to the student that does not need to be repaid. Grants are typically based on financial need.

Indirect Costs: Expenses incurred as a result of attendance that the student/family may pay to a third party (merchant, landlord, etc.) other than the college.

Net Cost: Amount of direct and indirect costs remaining after all gift aid (scholarship and grant) is subtracted.

Out-of-pocket Cost: Difference between the cost of attendance and all gift aid. Out-of-pocket cost can be covered through a variety of sources, including: savings, income and educational loans.

Packaging: The process of combining various types of student aid (grants, loans, scholarships, and employments) to attempt to meet full amount of student's need.

Private (Alternative) Loan: A loan from a commercial, state-affiliated or institutional lender used to pay for up to the annual cost of education, less any financial aid received. Private loans usually require the applicant to be creditworthy or have a co-signer and have varying interest rates, fees and repayment options. Repayment of interest (and often principal) generally begins immediately, with some lenders offering deferment options for in-school periods.

Professional Judgment: The financial aid administrator's discretion, based on the special circumstances of the student, to change the data elements used in determining eligibility for federal student aid or adjust a student's costs, for example.

R2T4 (Return to Title IV): Calculates and manages the treatment of funds when a student withdraws from the following Title IV programs: Subsidized and Unsubsidized Federal Stafford Loans, Direct PPLUS Loans, Federal PELL Grant, and SEOG.

Scholarship: Gift aid awarded to the student that does not need to be repaid. Scholarship awards are typically based on merit or a combination of merit and need, such as academic excellence, talent, affiliation with various groups, or career aspirations.

Self-help: Financial aid in the form of loans or student employment. Loans are used to help pay the remaining net costs after gift aid is deducted. Student employment earnings (including Work-Study awards) are generally not deducted from billed costs but can be used to help cover indirect costs and are paid in the form of wages to the student.

Subsidized Usage Limit Applies (SULA): Limits a first-time borrower's eligibility for Direct Subsidized Loans to a period not to exceed 150% of the length of the borrower's educational program. Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150% limit to lose the interest subsidy on their Direct Subsidized Loans.

Taxable Income: Income earned from wages, salaries, and tips, as well as interest income, dividend income, business or farm profits, and rental or property income.

Title IV Programs: Those federal student aid programs authorized under Title IV of the Higher Education Act of 1965.

Unmet Need: The difference between a student's total cost attendance at a specific institution and the student's total available resources.

Untaxed Income: All income that is received that is not reported to the Internal Revenue Service (IRS) or is reported but excluded from taxation. Such income would include but not limited to any untaxed portion of Social Security benefits, Earned Income Credit, welfare payments, untaxed capital gains, interest on tax-free bonds, dividend exclusion, and military and other subsistence and living allowances.

Verification: Process to confirm the accuracy of data provided by the applicant on the FAFSA. In order to complete the verification process, students are required to provide certain documents to the school for review.

Veteran's Educational Benefits: Assistance programs for eligible veterans and/or their dependents for education or training.