Scholarship and Financial Aid Glossary

Academic Year

One year period between July 1 and June 30

Accrual Date

The date on which interest loan interest begins.

Adjusted Available Income

The Federal methodology of calculating available income. Involves subtracting living expenses and taxes from total income.


Cash in bank accounts, trusts, stocks, bonds, securities, income-producing property, real estate (not including home), business equipment, and business inventory. Used to determine expected family contribution (EFC).

Asset Protection Allowance

Parent’s assets that do not count toward EFC.


Usually a student teaching or research position, used to earn money to cover school expenses.

Award Letter

Official letter from a school’s financial aid office, containing all of the aid awarded to the student for the academic year.

Bursar’s Office

Office at a university that is responsible for billing and collection of other expenses included in school tuition bill.

Campus-Based Programs

Federal student aid programs administered by colleges and universities. Includes Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS).

Cost of Attendance

Total cost of attendance the financial aid representative estimates a student will incur throughout their college education, subtract all financial aid.


Property which can be seized if a borrower defaults on a loan.

Commercial Lender

A commercial institution which offers lending options. Includes banks, savings and loan associations, credit unions, stock, trust company, or mutual savings bank.

Consolidation Loan

A loan which combines original loans into one loan in order to lower monthly payments. Consolidation loans typically have greater interest and repayment periods.

Cooperative Education (Co-op)

An opportunity for students to work and gain professional experience in their field of study, while earning money for tuition- usually offered by a college or university.


Individual who is ultimately responsible for a loan repayment.

Cost of Attendance

Total of all college expenses. Includes tuition, books, transportation, room and board, etc.

Custodial Parent

In unique family situations, the custodial parent is the parent with whom the student lived with over the past 12 months.


Occurs after 6 months, when a borrower fails to pay or meet other loan conditions. Can lead to bad credit, loss of future financial aid, withholding of tax refunds, etc.

Deferment of Loan

Suspension of loan repayment due to certain eligibility requirements, including being enrolled in college part-time.


Failure to pay a loan on-time.

Dependency Status

Determined by how much a student has access to a parents financial resources. Qualifications include having 24 years of age, being married, is a graduate or professional student, etc.

Direct Loans

Loans which are managed directly through the school, but which are obtained by the school through a lending agency. This is a new program which is only offered by select schools.


Refers to process by which students receive financial aid to cover school and living expenses. Aid may be disbursed through a tuition account or be sent to the student directly.

Enrollment Status

Explains if a student is enrolled full-time, part time, or in just a few classes. In most cases, students only qualify for financial aid if they’re enrolled on a part-time status.

Expected Family Contribution (EFC)

Amount a family is expected to contribute to a student’s education. EFC is based on family earnings, assets, amount of family members in college, and family size.

Extended Repayment

This new option for Federal loan borrowers, allows students with over $25,000 in Federal loans to extend their payment period longer than 10 years- to 25 or 30 years.


See Free Application for Federal Student Aid.

Federal Direct Student Loan Program (FDSLP)

Loans provided by the U.S. government, sent directly to student or their parents.

Federal Methodology

Formula by which financial need is determined b y the government. The Federal Methodology considers family size, the number of family members in college, taxable and nontaxable income and assets.

Federal Stafford Loan

Loans issued by the government, guaranteed by the government, and that have low-interest rates for students. The two types include subsidized (need-based) and unsubsidized (non –need-based). Both allow deferment until the student leaves school.

Federal Supplemental Educational Opportunity Grant (FSEOG)

Government grants issued to students with high financial need.

Federal Work-Study

The federally sponsored work-study program (FWS) provides students with part-time employment during the school year. Part of the student’s salary is paid for by the federal government, and eligibility is based on financial need.


Involves coverage of tuition and living expenses in return for graduate research or other work. Offered only to graduate students and does require repayment.

Financial Aid Administrator

Also known as a Financial Aid Officer, this is a university employee who is responsible for preparing and communicating information about student aid. He/She is also responsible for advising, counseling, and supervising financial aid office functions.

Financial Aid Package

Total amount of financial aid a student receives for the academic year. Unsubsidized Stafford loans and PLUS loans are not considered part of the package.

Financial Aid Transcript

A record of all financial aid awards a student has received.

Financial Need

A students educational costs, subtract the expected family contribution.

Fixed Interest Loans

Loans on which there is a fixed interest rate.


The approved temporary suspension of loan payments due to a financial hardship (interest continues to accrue).

Free Application for Federal Student Aid (FAFSA)

The application students must first complete to apply for virtually all forms of financial aid. Available at high schools and colleges or by calling 1-800-4-FED-AID, and on the Web by following the links at

Gift Aid

Financial aid awarded that does not have to be repaid.

Grace Period

A period of typically six to nine months after a student graduates or leaves school, where he/she does not have to begin paying back financial aid loans.


Financial aid that does not have to be paid back – typically based on financial need.

Guarantee Fee

A percentage of the loan that is paid to the guarantor to insure the loan against default. The fee is usually one percent of the loan amount.


A state agency or private, nonprofit organization that administers a student loan insurance program.

Home Equity

The current market value of the home, subtract the mortgage’s unpaid principal.

Income Contingent Repayment

Amount of monthly payments in correlation with amount of borrower income. As borrower’s income increases, so do monthly payments.


Financial Aid that a student (or a parent/guardian) borrows from a lender. Loans must be repaid by the borrower


A financial institution that provides funds to the student or parent for an educational loan.

Merit-based Aid

Financial aid which is not based on financial need, but rather abilities, grades, or talent.

Need Analysis

Review of an applicant’s financial resources, in order to determine how much the student or family can pay toward the cost of education.

Need-Blind Admissions

Acceptance to a school without reviewing need for financial aid. This admissions process is conducted by most colleges and universities.

Need-Sensitive Admissions

Process of taking into account a student’s financial situation prior to acceptance into a college or university. This is common practice at some schools for borderline students.

Origination Fee

The fee a borrower pays the lender for originating a student loan. These are most commonly used with PLUS, Federal Stafford, and Federal Direct student loans. They cannot exceed 3% of the loans principal balance.

Parents’ Contribution

An estimate conducted by the federal government, as to the contributions parents can make to a student’s postsecondary educational expenses.

Pell Grant

Federal grant program for undergraduate students who demonstrate financial need and have not yet completed a baccalaureate degree.

Perkins Loan

Subsidized federal loan for students who demonstrate financial need (as determined by the school).

PLUS Loans (Parent Loans for Undergraduate Students)

Federal loans available to parents. Parents can borrow total cost of a student’s education, subtract any financial aid he/she receives.

Prepaid Tuition Plan

A college savings plan which allows you to prepay college tuition, locking-in the current tuition rate until the students attends college- regardless of inflation.


The total amount borrowed or owed on a loan.

Professional Judgment

Financial aid administrators can exercise professional judgment and adjust the expected family contribution (EFC) to meet special family circumstances (a parent becomes disabled, unemployed, etc.).

Promissory Note

A legally binding contract explaining loan terms and obligations, which a student is required to sign before receiving any aid.

Satisfactory Academic Progress

Requirements necessary for a student to receive financial aid- Including minimum number of courses, GPA, and time frame.


Financial assistance which does not require repayment of employment- usually merit-based or determined by special circumstances (ethnicity, religion, etc.).


An organization that is paid by a lender to administer their student loan portfolio.

State Student Incentive Grants

Funds issued by the federal government to match state funding, to provide financial aid for state residents.

Student Aid Report (SAR)

Official results of eligibility of financial aid after students submit the FAFSA. Students may be required to submit this document to the college’s financial aid office.

Subsidized Loan

A student loan that does not require repayment until after graduation and a six to nine month grace period.

Supplemental Education Opportunity Grant (SEOG)

Federal grants awarded to students with exceptional financial need. Limited to $4000 per semester.

Title IV Programs

Federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended. Includes Federal Pell Grants, Federal Supplemental Educational Opportunity Grant, Federal Work Study, Federal Perkins Loan, Federal Stafford Loan, Federal PLUS Loan, Direct Loan, Direct PLUS Loan and SSIG.

Undergraduate Student

A student who is working toward his/her Bachelor’s degree.

Unmet Need

The gap between a students total available resources, including financial aid, and the amount of financial aid received.

Unsubsidized Loan

A non-need-based loan, on which borrowers must pay full interest while enrolled in school.


Process through which a financial aid applicant is asked to provide specific documentation to verify accuracy of an application.


See Federal Work-Study.