TERMS AND DEFINITIONS
Award Letter - The official document, issued by the financial aid office, which notifies and lists all the financial aid offered to the applicant. You may still have to satisfy specific instructions or requirements before funds can be received.
Alternative Loan - A private educational loan, which allows students to help cover their remaining cost of attendance. Requirements for these loans vary but generally, the borrower must not have an adverse credit history and/or have a co-borrower sign for the loan.
Budget - The estimated amount you will incur as expenses over the course of the academic year including tuition, books, fees, living, and traveling expenses. The school uses guidelines established by federal regulations to determine the budget. Also known as the Cost of Attendance (COA).
Cost of Attendance (COA) – see Budget.
Default - Failure to make loan payments or otherwise honor a loan’s terms. You will be reported to credit bureaus and there are several legal and economic ramifications of being in default.
Dependent Student – A student who does not meet any of the criteria listed for an independent student as defined by the US Department of Education (see Independent Student). Federal guidelines are used to determine dependency status and eligible parent. The IRS definition of custodial parent is used to define eligible parent for dependent students.
Disbursement – the process by which financial aid funds are made available to students for use in meeting tuition, fees, room and board, and other school charges. Funds are applied directly to the student's account and any excess funds are then made available to the student as a refund via check.
Expected Family Contribution (EFC) - The amount of money that a family is expected to contribute to the student's education. The EFC is determined by the Federal Processor and consists of the parent and student contribution, the student's dependency status, family size, number of family members in school, taxable and nontaxable income, and assets. It is used to determine a student’s eligibility for need-based financial aid and is located on the Student Aid Report (SAR).
Federal Processor - The federal government’s computer system that analyzes the information on the FAFSA, calculates the official Expected Family Contribution (EFC), and sends out the Student Aid Report.
Financial Need – the gap between the cost of attending the school and the student's resources. The financial aid package is based on the amount of financial need. The process of determining a student's financial need is computed by subtracting the EFC from the Cost of Attendance.
Cost of Attendance – Expected Family Contribution = Financial Need
First-time Borrower - Any student or parent who is borrowing a federal loan through a federal loan program for the first time.
Free Application for Federal Student Aid (FAFSA) - The FAFSA is used to apply for federal student financial aid, including grants, loans, and work-study. It is also used to award non-federal student financial aid, which may include other grants and/or scholarships. The FAFSA is a snapshot of your family's financial situation including income, debt, assets, etc., for both the parents and the student. You will have to fill out the FAFSA every year that you are in college.
Full-time Student – a student who is enrolled in 12 or more hours per academic term.
Independent Student – A student who reports only his or her own income (and that of a spouse, if relevant) when applying for federal financial aid. Students will be considered independent if they are one of the following:
Origination Fee - A processing fee charged to a borrower by a lender to make a loan. This fee, like the guarantee or insurance fee, is usually subtracted from the gross amount of a loan.
Over-award - a situation in which the student's financial aid exceeds the budget. Federal student aid programs do not allow over-awards.
Part-time Student - a student who is enrolled in at least 6 hours but no more than 12 hours per academic term.
Promissory Note - The binding legal document that must be signed by the student borrower and/or parent before loan funds are disbursed by the lender. It states all of the terms and conditions of a loan, including the amount, the interest rate, and repayment obligations. The student should keep this document until the loan has been repaid.
Satisfactory Academic Progress - The minimum academic progress required by federal and institutional regulations a student must maintain toward a degree to receive financial aid. Click here for more information.
Selective Service – an independent federal agency that administers obligatory military service. Males born on or after January 1, 1960, who are at least 18 years old, citizens/eligible non-citizens, and not currently on active duty in the Armed Forces must register, or arrange to register, with the Selective Service to receive federal student aid. For more information and/or to register, please visit www.sss.gov.
– Report that summarizes the information submitted on the FAFSA, which will indicate the EFC, if there are any unresolved issues concerning the FAFSA, and/or if a student has been selected for verification. The applicant should receive a copy of the SAR four to six weeks after filing the paper FAFSA or it can be viewed immediately if the FAFSA is submitted on-line. Review the SAR and correct any errors by resubmitting it. Keep a photocopy of the SAR for your records.
Verification - A procedure whereby the school verifies the information reported on the FAFSA, usually by requesting a copy of the tax returns filed by the student, and if applicable, the student's spouse or parent(s). FAFSA applications are randomly selected for verification by the federal processor and identified with an asterisk printed next to the EFC on the Student Aid Report.