Preparing for college is stressful enough, but figuring out how
to pay for it is even harder. Plus, from the first FAFSA through graduation,
you're sure to be bombarded with financial aid acronyms and buzzwords. Here
are some key terms you'll need to know.
AGI: Adjusted Gross Income.
Most financial aid forms require parents or students to state their taxable
AGI based on income minus maximum allowable adjustments.
Alternative
Loans: These private student loans from banks or other lending institutions
are not federally supported or guaranteed. Students must be enrolled to apply
for these loans.
Capitalized Interest: Unpaid interest that is
added to the original amount of a loan. Capitalized interest increases the
size of a loan, because the borrower is paying interest on their interest.
COA:
Cost of Attendance. This is the total cost of attending a college or university,
including tuition, room and board, books, lab fees, transportation and basic
living expenses.
CSS Profile: The College Scholarship Service
Profile is a financial aid form that many colleges and universities use to
determine how much non-federal financial aid a student may be eligible for.
Community
College: Sometimes called junior college or two-year college. Students
can take classes, and then transfer to a four-year school, or they can earn
certificates, diplomas or associate's degrees.
Credit Hour: Credit
hours are units of value given to classes. Some classes may be worth two or
three credits, while others are worth four credits. Credits vary by class
and by school. Many schools base tuition costs on the number of credit hours
taken. Some charge a specific dollar amount per credit hour.
Deferment:
A deferment is an approved pause in repaying a student loan. For example,
students may seek a deferment on undergraduate loan payments while in graduate
school.
Department of Education: This government agency administers
several federal student financial aid programs. Also referred to as USED (U.S.
Department of Education).
Direct Loan Program: The U.S. Department
of Education's loan program.
EFA: Estimated Financial
Aid. This is the amount of financial aid a student will likely be eligible
for. The figure is calculated based on all required financial aid forms.
EFC:
Expected Family Contribution. To be eligible for federal financial aid, parents
must fill out a FAFSA (see below) form with detailed financial information.
The EFC is calculated based on this information, showing the amount of money
the family can reasonably be expected to contribute to their child's education.
There are free EFC calculators available online, which can help estimate the
EFC.
FAA: Financial Aid Administrator. An FAA is a college or
university employee involved in the administration of financial aid. Also
known as financial aid advisors, officers or counselors.
FAF:
Financial Aid Form. This is the generic term used for any financial aid form.
FAFSA:
Free Application for Federal Student Aid. Filling out a FAFSA form is the
first step in the financial aid process. To be eligible to receive federal
financial aid, a student must complete a FAFSA.
FAT: Financial
Aid Transcript. This transcript logs all financial aid a student has received.
FDSLP:
Federal Direct Student Loan Program. Through this program, student loans are
provided directly to the student from the federal government, rather than
through commercial lenders.
FFELP: Federal Family Education
Loan Program. This federally guaranteed student loan program ended June 30,
2010. All new loans are through the Department of Education's Direct Loan
Program.
Federal School Code (also, Title IV Institution Code):
Each college, campus or program has a six-character institution code. You
must include the code related to each of your college applications when filling
out a FAFSA. These codes are available by contacting the school or checking
an online listing.
Federal Stafford Loan (also, Federal Direct Loan):
These student financial aid loans are obtained through banks, lending institutions
or colleges. To qualify, students must be enrolled in a college degree program
at least part-time. The loans may be subsidized (need-based, typically for
low-income students), or unsubsidized (not need-based so any student can apply).
Students apply by filling out the FAFSA. Formerly called the Guaranteed Student
Loan.
FSEOG: Federal Supplemental Educational Opportunity Grant.
This federal government program provides need-based grants to low-income college
students, and is administered through the school's financial aid office.
Federal
Work-Study Program: A federally-funded, need-based program administered
by each school, this program allows students to work on campus in exchange
for a portion of their tuition.
Grant: A grant is money given
to students for their education. Often based on need, grants may come from
federal or state programs, or sometimes from private charitable organizations.
It does not have to be repaid.
GSL: Guaranteed Student Loan.
Now called the Federal Stafford Loan or Direct Ford Loan (see Federal Stafford
Loan, above).
Independent Student: Independent students are self-supporting
students who are not financially dependent on their parents.
MPN:
Master Promissory Note. This form promises repayment, and is signed by a student
or parent when taking out a PLUS or Stafford Loan.
National Merit
Scholarship Program: Students who do well on the PSAT/NMSQT may qualify
for scholarships. A few students receive full scholarships.
Need-based:
Need-based financial aid is reserved for low-income students.
NSLDS:
National Student Loan Data System. This U.S. Department of Education database
allows students to access their Title IV student loan and grant information.
Parent
Contribution: This is the amount of money parents are expected to be able
to contribute to their child's education.
Pell Grant: This
federal program provides need-based educational grants for low-income students.
Because they are grants, they do not have to be repaid.
Perkins Loan
Program: This federally funded, need-based loan program provides low-interest
loans to both undergraduate and graduate students.
PLUS: Parent
Loan for Undergraduate Students. These federal guaranteed loans are available
for parents of undergraduates.
PSAT/NMSQT: The Preliminary SAT/National
Merit Scholarship Qualifying Test. Students hoping to receive a National Merit
Scholarship must take and pass this test.
ROTC: Reserve Officers
Training Corps. In this program, the military pays a student's tuition or
other expenses. The student takes part in summer training while in college,
and commits to military service after college.
SAR: Student Aid
Report. This report summarizes the information entered on your FAFSA form,
and shows the amount of your Expected Family Contribution.
Scholarships:
These funds are given to, or earned by, students, and are to be used for tuition.
There are numerous public and private sources for scholarships. Some are given
based on need, some on merit or skill. Others have very specific stipulations
on who can receive the scholarship.
Student Contribution: This
is the amount a student is expected to contribute to his or her educational
expenses.
SUB: Subsidized Federal Stafford Loan. (See Federal
Stafford Loan, above)
Title IV Institution Code: (See Federal
School Code, above)
UNSUB: Unsubsidized Federal Stafford Loan.
(See Federal Stafford Loan, above)
Work-Study: This program allows
students to defray part of their tuition and school expenses by working part
time on campus.