Financial Aid Glossary of Terms
You may come across some unfamiliar terms as you start looking into and applying for financial aid. Here’s a glossary to help you make sense of it all.
Award Letter
Also known as a financial aid offer. It’s the communication you receive from a college that shares the types and amounts of financial aid the college is offering you. The financial aid offer or award letter should also include what you’re expected to do to keep the award, and a deadline for accepting the award. Colleges will send this via mail, email, or college portal.
Bursar, Student Accounts, or Student Financial Services
The college office that’s responsible for handling billing and payments for tuition, fees, housing, and other related expenses.
Cost of Attendance
The total amount of college expenses including tuition and fees, room and board, books and supplies, and living expenses.
CSS Profile®
A financial aid application used by hundreds of colleges, universities, and private scholarship programs to award non-federal financial aid funds. College Board offers this service.
Deferment
A deferment is a temporary postponement of payment on a loan that is allowed under certain conditions and during which interest doesn’t accrue on subsidized loans.
Demonstrated Need
The difference between the total cost of attendance for a particular college and your student aid index (SAI).
Direct Plus Loan
Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students use to help pay for education expenses.
Direct Subsidized Loan
A Direct Subsidized Loan is a federal student loan where a borrower isn’t generally responsible for paying interest while in an in-school, grace, or deferment period.
Discretionary Income
Discretionary income is a factor used in determining a borrower’s payment amount for certain loan repayment plans and/or loan rehabilitation. It’s the difference between annual income and a percentage of the poverty guideline for the borrower’s family size and state of residence.
Emancipated Minor
An emancipated minor is someone who has been legally deemed an adult by a court in their state of residence. If you are an emancipated minor, you are considered an independent student and will not provide information about your parents on the FAFSA® form.
Enrollment Status
A classification based on the number of credit hours you're taking; for example, your enrollment status may be full-time or half-time. Some loans or aid may be available only to students with a certain enrollment status, usually half-time or more.
FAFSA (Free Application for Federal Student Aid)
The free application form you submit to apply for federal financial aid. It is required for all students seeking federal student grants, work-study programs, and loans. Most colleges require it as well. The FAFSA may also qualify you for state-sponsored financial aid.
FAFSA Submission Summary
A summary of all the information that was submitted on your FAFSA (Free Application for Federal Student Aid). It’s available after your FAFSA has been processed and will provide your student aid index (SAI), estimated federal aid eligibility, next steps, and other information.
Federal Supplemental Educational Opportunity Grant
The Federal Supplemental Educational Opportunity Grant (FSEOG) is a grant that is awarded to an undergraduate student who demonstrates exceptional financial need to help pay for their education. Awards can range from $100–$4000 and don’t need to be repaid.
Financial Aid
Money given or loaned to you to help pay for college. It can include grants, scholarships, loans, or work-study. Financial aid can come from federal and state governments, colleges, and private and social organizations. Learn about financial aid options.
Financial Aid Office
A college office that serves as a resource for students who need help paying for college costs. Financial aid officers can answer any financial aid questions you have and help you apply for grants, loans, scholarships, and work-study employment. The financial aid office may also offer programs to help you manage your money.
Financial Aid Officer
College employees trained to help students and families apply for grants, loans, scholarships and work-study employment. They can answer questions about ways to make college more affordable.
529 Savings Plans
A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. Legally known as “qualified tuition plans,” 529 plans are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. There are two types of 529 plans: education savings plans and prepaid tuition plans.
FSA ID
An FSA ID consists of an account username and password that give you access to the U.S. Department of Education’s online systems and can serve as your legal signature when completing electronic documents.
Grant
A kind of "gift aid" — financial aid that doesn’t have to be paid back. Grants are usually awarded based on need.
Loan
Money you borrow from the government, a bank, your college, or another source. Loans need to be paid back, usually over an agreed period of time. You will most likely also have to pay interest on a loan—a fee for borrowing the money.
Merit Aid
Financial aid given to students based on their personal achievements. Most scholarships are considered merit aid, as they are generally awarded for success in school, the arts, athletics, or another area.
Need-Based Financial Aid
Financial aid (grants, scholarships, loans, and work-study opportunities) given to students because they and their families are not able to pay the full cost of attending a certain college. This is the most common type of financial aid.
Need-Blind Admission
Need-blind admission means that applicants' ability to pay for their education will not be a determining factor in the admission decision.
Net Price
Net price is the true amount a student will pay for a college. The “net price” is the full cost of attendance at a college (including room and board, supplies, and other expenses) minus grants and scholarships.
Net Price Calculator
An online tool that gives you a personalized estimate of what it will cost to attend a specific college. Most colleges are required by law to post a net price calculator on their websites.
Outside Scholarship
Also called “private scholarship.” A scholarship offered by an organization or a college. Outside scholarships are offered by all kinds of individuals, groups, corporations, and nonprofit organizations.
Pell Grant
The Pell Grant is the largest federal grant program offered to undergraduates. It is designed to assist students from low-income households. To qualify for a Pell Grant, a student must demonstrate financial need by completing and submitting the FAFSA® form.
Priority Date
The date by which your application—whether it’s for college admission, student housing, or financial aid—must be received to be given the strongest consideration. Since financial aid is often limited, meeting the priority date or deadline is important to be eligible to receive funds.
Reserve Officers' Training Corps (ROTC)
A program offered by the military and available at some colleges. ROTC offers scholarships to students who agree to serve in the military after they graduate. Some ROTC four-year scholarships cover full tuition and fees. The program combines a military education along with college study leading to a bachelor’s degree.
Residency Requirements
The amount of time a student has to live in a state before he or she is eligible for in-state tuition prices and state aid.
Scholarship
A kind of "gift aid"—financial aid that doesn’t have to be paid back. Scholarships may be awarded based on merit or partial merit. That means they’re given to students with certain qualities, such as proven academic or athletic ability.
Stafford Loans
The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. Some people refer to these loans as Stafford Loans or Direct Stafford Loans.
State Aid
State aid is financial assistance that a state offers to eligible residents,as opposed to aid provided by the federal government.
Student Aid Index (SAI)
An eligibility index number that a college's or career school's financial aid office uses to determine how much federal student aid you may be able to receive. The SAI is calculated using information from your FAFSA form.
Unsubsidized Loan
An unsubsidized loan through the Direct Loan Program offers students a low, fixed interest rate and flexible repayment terms. It’s not based on financial need.
Work-Study
A program that allows students to work a part-time campus job and earn money as part of their financial aid package. To qualify for the Federal Work-Study Program, which is funded by the government, you must complete the Free Application for Federal Student Aid (FAFSA). Some colleges have their own work-study programs.