Glossary of Financial Aid Terms

when determining financial need, anything that is owned, such as cash, real estate, investments or savings accounts

letter sent to students outlining the financial aid package offered; the student needs to sign and return this letter to accept the aid.

one of the services on which the government and colleges rely when figuring out a family's expected contribution (see Estimated Family Contribution [EFC]).

standard formula developed by Congress under the Higher Education Amendment of 1986, which is used to evaluate parents' income and assets, taking into consideration the number of college-aged children and associated, anticipated college costs. This evaluation helps determine the Estimated Family Contribution (EFC) and the student's eligibility for financial aid.

payment option for students with multiple loan debts that allows borrowers to combine the principals and pay back loans in monthly installments for up to 25 years.

postponement of a loan's repayment, offered by many federal loan programs.

student who relies on his or her parents for financial support.

a payment from scholarships, grants or other sources

degree to which a student qualifies for financial aid

amount of money a student's family can contribute to the cost of college, determined with a standard formula called the Congressional Methodology and used in determining a student's eligibility for financial aid

program through which students work part time and earn money to help pay for college

total aid given to a student, from all sources. The financial aid package is explained in the award letter

difference between a college's total cost of attendance and a family's EFC

commercial services that supplement federally and state-funded loans

federal form used to apply for state and federal aid

financial gift that does not need to be paid back

student who does not rely on his or her parents for financial support

the charge for money that is borrowed; usually a percentage of the principal amount

money that is borrowed from the government, a bank, credit union or other lender that must be paid back

loans given by the same financial institutions that give Stafford Loans

need-based federal financial aid that does not need to be paid back; only available to undergraduate students

low-interest, need-based loan awarded by individual colleges. Students begin paying back Perkins Loans nine months after graduation or leaving school

amount of money borrowed, not including interest charges

money awarded that does not need to be paid back; criteria might include academic excellence, talent, race, religion, group affiliations, state of residence or need

loan given by banks, credit unions, loan associations or individual colleges; sometimes called Guaranteed Student Loan, or GSL

loan that does not accrue interest until the student leaves school

used in determining a student's eligibility for financial aid, the total amount estimated for all college costs; includes tuition, fees, books, supplies, housing, meal plan, personal expenses and travel expenses

loan that accrues interest while a student is still in school