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Financial Aid

Assisting students in receiving a college education

terms

Financial Aid Terms to know

 

MoneyAbility-to-benefit test: one of the ways to determine eligibility for federal aid for students who aren't high school graduates or don't have a GED certificate.

 

Assets: an item of value, such as real estate property other than the home you reside in, stocks, bonds, cash savings, trust funds, money market funds, college savings plans, retirement plans and prepaid tuition plans (the FAFSA does not ask you to report home equity or retirement plan assets).

 

California Aid Report (CAR): the report from the California Student Aid Commission summarizing the information you provide on your FAFSA; estimates your Cal Grant award.

 

California residency: you're considered a California resident if you're an unmarried student, under 18, and your parents have been legal California residents for one year prior to the year in which you are applying for state financial aid; if you've lived for two years with a legal California resident, other than a parent; or if a parent is in the U.S. Armed Forces, stationed in California and on active duty when you enroll. All married students, regardless of age, and unmarried students 18 or older, must establish their own residency. Please see Admissions and Records residency policy for more information.

 

Campus-based aid: federal programs administered by colleges: Federal Supplemental

Educational Opportunity Grant and Federal Work-Study.

 

Capitalization: when interest is added to the principal balance of a loan rather than being paid as it accrues; any future interest is based on the higher loan amount.

 

Citizen/national: U.S. citizens - those born in one of the 50 states, the District of Columbia, or abroad to a U.S. citizen - and nationals - citizens of Puerto Rico, the U.S. Virgin Islands, Guam and the Northern Mariana Islands and natives of American Samoa and Swain's Island - are eligible for most federal aid; citizens of the Federated States of Micronesia and the republics of Palau and the Marshall Islands are eligible only for Pell Grants, Federal Supplemental Educational Opportunity Grants and Federal Work-Study.

 

Cost of attendance: the total cost of college for the school year as calculated by colleges, including tuition, fees, books, supplies, transportation, food, housing, personal expenses, and sometimes the rental or purchase of a computer; also known as the student budget.

 

Data Release Number (DRN): the four-digit number assigned to your FAFSA by the federal processor. You'll need the DRN to make corrections to your mailing address or the schools you listed on your FAFSA.

 

Default: failure to make loan payments or otherwise honor a loan's terms.

 

Deferment: temporary postponement of payment on your student loan. Interest accrues unless your loan is subsidized by the federal government. Common reasons for deferment include attending school at least half time, and economic hardship/unemployment.

 

Delinquency: the state of being behind on your loan payments.

 

Eligible non-citizen: a U.S. permanent resident who has a Permanent Resident Card (I-551 or I-151); a conditional permanent resident (I-551C); or a non-citizen who has an Arrival-Departure Record (I-94) from the Department of Homeland Security's U.S. Citizenship and Immigration Services with one of the following designations: Refugee (including non-citizen victims of human trafficking), Asylum Granted, Parolee (the I-94 confirms paroled for a minimum of one year and status has not expired), or Cuban-Haitian Entrant. Those in the U.S. on an F1 or F2 student visa, a J1 or J2 exchange visitor visa, or a G series visa (pertaining to international organizations) are not U.S. citizens or eligible non-citizens and so are ineligible for federal aid.

 

Expected family contribution (EFC): the portion of your own and your family's financial resources that should be available to pay for college, based on a federal formula using the information on your FAFSA.

 

FAFSA: the Free Application for Federal Student Aid, the primary application for applying for financial aid from the federal government, states and colleges.

 

Federal methodology: the formula the federal government uses to determine a family's ability to contribute toward a college education using the information submitted on the FAFSA to calculate the expected family contribution (doesn't count home equity and certain other assets); also used by states and some colleges.

 

Federal processor: the federal government's computer system that analyzes the information on your FAFSA, calculates your expected family contribution (EFC) and sends out the Student Aid Report; also called the central processing system.

 

Financial aid eligibility: the difference between your expected family contribution and the college's cost of attendance; also known as your financial need.

 

Financial aid package: the total amount of financial aid offered, usually a combination of grants, scholarships, and/or loans and work-study.

 

Forbearance: temporary postponement or reduction of your monthly payment; often extends the repayment term. Interest continues to accrue, increasing the loan balance. Forbearance must be approved by your lender.

 

GED: General Education Development test/certificate used to measure academic achievement at the high school graduate level.

 

GPA: grade point average.

 

Grant: financial aid that doesn't need to be repaid; usually based on financial need.

 

Interest: the money lenders charge you for borrowing their money.

 

ISIR: Institutional Student Information Record: Electronic Student Aid report sent to schools from the Central Processing Center (CPS).

 

Master promissory note (MPN): a legally binding contract between a borrower and lender listing all terms and conditions of a loan; federal student loans require an MPN.

 

Merit-based aid: financial aid that is based on merit - grades, test scores, athletic ability, talents or other criteria and not on income or assets.

 

Need-based aid: financial aid that is based on your own or your family's income and assets; most financial aid offered by states and the federal government is need-based.

 

PIN: personal identification number from the U.S. Department of Education that serves as your e-signature on the electronic FAFSA; you can also use your PIN to check the status of your FAFSA, correct or print your Student Aid Report, sign your master promissory note, and view your financial aid records at www.nslds.ed.gov.

 

Principal (loan): the amount you borrowed, not including interest.

 

Promissory note: a legally binding contract between a borrower and lender listing all terms and conditions of a loan; federal loans have a master promissory note.

 

Satisfactory Academic Progress: as established by your college, the progress you must maintain toward obtaining a degree or certificate to continue receiving financial aid, and the GPA you must maintain.

 

Scholarship: money for college you don't have to repay, awarded based on grades, test scores, major, heritage or other criteria, but usually not financial need.

 

Selective Service registration: most males (citizens and eligible non-citizens) age 18-25 who are not currently on active duty in the Armed Forces must register with the Selective Service for military draft to receive federal student aid.

 

Student Aid Report (SAR): the report summarizing the information you provide on the FAFSA. It is either mailed or emailed to you once you have completed your FAFSA and it has been processed by the Department of Education.

 

Student budget: the total costs of attending a college; also known as the cost of attendance (COA).

 

Undocumented students: students who live in the United States and are not U.S. citizens or legal permanent residents and who don't have an Alien Registration Card, visa or other legal documentation; includes students or their families who entered the country legally on tourist or work visas and chose to stay after their visas expired.

 

Unmet Need: Cost of attendance minus the Expected Family Contribution minus the Estimated Financial Aid for the student.

 

Untaxed income: all income you receive that's not taxed or may not be reported to the IRS, including the untaxed portions of pensions or IRA distributions, interest on tax-free bonds, clergy and military food and living allowances, and others (see FAFSA ).

 

Verification: the procedure by which a college checks the information reported on the FAFSA, usually by requesting a copy of you (or your parents') signed federal tax return and other documentation.

 

Veteran: a person who has engaged in active duty in the U.S. Armed Forces or is a National Guard or Reserve enlistee called to active duty for purposes other than training, or who was a cadet or midshipman at one of the service academies, and who was released under a condition other than dishonorable; or who'll be a veteran by June 30, 2012.

 

Vocational school: a school that offers a course of study beyond high school to teach specific job skills; also called a technical or trade school.