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Financial Aid Glossary

 
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Academic Period:  A measured term of enrollment (such as a semester, quarter, trimester, or clock or credit hour).

Accrued Interest: Interest that accumulates on the unpaid principal balance of a loan.

Adjusted Gross Income (AGI): All taxable income less IRS allowable adjustments to income. This figure is drawn from an individual's federal tax return.

Advanced Placement (AP): Earned credit and/or advanced standing in certain course sequences that postsecondary institutions may offer to high school students who have taken high-level courses and passed certain examinations.

Agreement to Serve (ATS):  The binding agreement that must be signed by the student to receive a TEACH Grant. By signing the ATS, the student agrees to teach (1) full-time (2) in a high-need field (3) at a low-income school or educational service agency that serves certain low-income schools, and (4) for at least four complete academic years within eight years after completing (or ceasing enrollment in) the course of study for which the student received the grant. If the teaching service agreement is not completed, the amounts of the TEACH Grants received will be converted to a Direct Unsubsidized Loan that the student must repay with interest charges from the date of each TEACH Grant disbursement.

Annual Loan Limit:  The maximum amount that a student may borrow at a particular grade level in one academic year.

Assets: Cash on hand in checking and/or savings accounts; trusts, stocks, bonds, other securities; real estate (excluding the home), income-producing property, business equipment, and business inventory. Assets are considered in calculating the EFC.

Associate of Arts Degree: A degree given for successful completion of some courses of study at a two-year institution.

Award Letter Notification:  A method of notifying financial aid applicants of the assistance being offered by an institution. The award letter usually provides information on the types and amounts of aid offered, as well as specific program information, student responsibilities, and the conditions which govern the award.

Award Package:  A list of various types of student aid (grants, loans, scholarships, and employment) combined to attempt to meet the full amount of student’s need. 

Award Year: The school or academic year (Fall, Spring and Summer terms) for which financial aid is used to fund your education.

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Bachelor’s Degree: The degree given for successful completion of the undergraduate curriculum at a four-year college or a university. It is also called a baccalaureate degree.

Borrower:  The person who receives loan funds and is legally obligated to repay those proceeds with interest at a future date per the conditions established in a promissory note.

Borrower Based Academic Year (BBAY):  One of two types of academic years a school can use in determining a period of enrollment or when another year will begin for the student. It is an academic year that is individualized per borrower and depends on the borrower’s attendance and progress in his/her degree or eligible certificate program.

Budget: See Cost of Attendance.
Business Assets: Property that is used in the operation of a trade or business, including real estate, inventories, buildings, machinery and other equipment, patents, franchise rights, and copyrights. Business assets are considered in the calculation of the EFC under the regular formula
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Campus-Based Programs: The term commonly applied to those federal student aid programs administered directly by institutions of postsecondary education. Campus-based programs include: Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant (FSEOG), and Federal Work-Study (FWS)

Cancellation (Loan):  Releasing a borrower from the obligation to repay all or a portion of his or her loan.

Capitalization (of interest): The arrangement between borrower and lender whereby interest payments are deferred as they come due and are added to the principal amount of the loan.  Capitalizing interest increases the principal amount of the loan and, therefore, the total cost of the loan.

Central Processing System (CPS): The CPS processes information from the Free Application for Federal Student Aid (FAFSA), calculates the Expected Family Contribution (EFC) for each applicant, prints the Student Aid Report (SAR) that is sent to the student, and transmits the Institutional Student Information Record (ISIR) data electronically to the school(s) listed on the FAFSA. Data from the CPS system is used to verify eligible students.

Certificate: The formal acknowledgment of successful completion of a particular certificate program or course of study at a higher education institution, particularly at a vocational school, trade school, or junior college

CLEP: See College-Level Examination Program.

COA: See Cost of Attendance.

Cohort Default Rate:  A measurement of the percentage of a school's borrowers who enter repayment in a federal fiscal year and default on their loans before the end of the next federal fiscal year.

Collection:  The activities and/or actions by lenders, guarantors, servicers, and collection agencies to obtain payment on unpaid loan principal and interest from a borrower after that borrower defaults on the loan.

Collection Agency:  A business organization that receives delinquent or defaulted loan accounts from lenders and attempts to collect on those accounts. A fee is charged for the service.

College Level Examination Program (CLEP): A series of examinations demonstrating a student’s proficiency in a subject area, for which some postsecondary institutions offer credit.

Community Service:  A service identified by an institution of higher education, through formal or informal consultation with local nonprofit, governmental, and community-based organizations that is designed to improve the quality of life for community residents, particularly low-income individuals, or to solve particular problems related to their needs.

Commuter Student: A student who does not live on campus; typically, “commuter” refers to a student living at home with his or her parents, but can also mean any student who lives off campus.

Conflicting Information: Any information obtained by the school that is different from information previously available to the school and that impacts a student's eligibility for aid

Consolidation Loan: A loan made to enable a borrower with different types of loans or multiple loans to obtain a single loan with one interest rate and one repayment schedule. Federal Perkins Loans, Direct Subsidized and Direct Unsubsidized Loans, and other eligible loans may be combined for purposes of consolidation, subject to certain eligibility requirements. A consolidation loan pays off the existing loans; the borrower then repays the consolidated loan.

Consortium Agreement:  A written agreement between Title IV-eligible schools allowing a student to receive federal student aid for study at a school other than his or her "home" school.

Cooperative Education: A program through which a college student alternates periods of classroom instruction with periods of related employment.

Cosigner:  A person who signs the loan promissory note in addition to the borrower and is responsible for the obligation if the borrower does not pay.

Cost of Attendance (COA): Generally, this includes the tuition and fees normally assessed to a student, together with the institution’s estimate of the cost of room and board, transportation and commuting costs, books and supplies, and miscellaneous personal expenses. In addition, student loan fees, dependent care, reasonable costs for a study abroad or cooperative education program, and/or costs related to a disability may be included on case by case basis or when appropriate. It is also referred to as “cost of education” or “budget.”

CPS: See Central Processing System.

Credit (or Credit Hour): The unit of measurement some institutions give for fulfilling course requirements.

Custodial Parent: The parent with whom a dependent student lives, and whose financial information is used in need analysis when parents are divorced or separated.

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Data Matches:  When a federal student aid application is processed, the Central Processing System (CPS) compares (or matches) the application data with records at other federal agencies (the Social Security Administration, the Department of Homeland Security, the Department of Veterans Affairs, and the Selective Service System) and ED's internal databases (such as the National Student Loan Data System).

Data Release Number (DRN):  The four-digit number assigned to a student’s FAFSA that allows the student to release his/her FAFSA data to schools that was not listed on the student’s original FAFSA. This number is needed to contact the Federal Student Aid Information Center to make corrections to the mailing address or the schools listed on the FAFSA. The number is found below the confirmation number on your FAFSA submission confirmation page or in the top right-hand corner of the Student Aid Report (SAR).

Default:  Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, the default occurs when a payment has not been made in more than 270 days.

Default Rate: The default rate is the percentage of students who took out federal student loans to help pay their expenses but did not repay them properly.

Deferment (of loan repayments):  For federal student loans, a period of time in which loan payments do not have to be made and interest does not accrue. Depending on the loan program, students may be granted deferments for many reasons, such as returning to school, economic hardship, or disability.

Delinquency:  Failure to make monthly loan payments when due. Delinquency begins with the first missed payment.

Department of Education, U.S. (ED or DOE): The federal government agency that administers financial assistance to students enrolled in postsecondary educational programs under the following programs: Federal Pell Grant, Iraq and Afghanistan Service Grant (IASG); Teacher Education Assistance for College and Higher Education (TEACH) Grant, Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and William D. Ford Federal Direct Loan (Direct Loan) Program.

Department of Homeland Security (DHS):  The federal agency that has oversight of Immigration. The CPS conducts a match of FAFSA data against this agency's database to confirm immigrant student identification and eligibility for federal student financial aid.

Departmental Scholarship: An award of gift assistance that is specifically designated for a recipient in a particular academic department within the institution.

Dependency Override:   In documented unusual circumstances, a financial aid administrator can use professional judgment to classify a dependent student as independent for the purposes of determining student aid eligibility.

Dependent Student: A student who does not qualify as an independent student and whose parental income and asset information is used in calculating the EFC (see Independent Student).

Direct Loan (DL):  A federal program, also called the William D. Ford Federal Direct Loan Program, through which the U.S. Government rather than a commercial lender provides four types of education loans to student and parent borrowers: Subsidized and Unsubsidized Stafford Loans for students, PLUS Loans for parents, and Consolidation Loans for all borrowers.

Direct PLUS Loan: Long-term loans made available to parents of dependent students and graduate/professional students. Interest rates are fixed at 7.9 %. May be used to replace EFC; amount borrowed is limited to the cost of attendance minus estimated financial assistance.

Direct Subsidized Loan:  Long term, low-interest loan administered by the Department of Education and institutions. This Loan carries a fixed interest rate and can NOT be used to replace EFC.

Direct Unsubsidized Loan: Long term, low-interest loan administered by the Department of Education and institutions. This Loan carries a fixed interest rate and can be used to replace EFC.

Disbursement of Financial Aid:  The process by which Title IV program funds are paid to a student or parent borrower.

Discharge:  The release of a borrower from the obligation to repay their loan. See also Cancellation.

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Educational Benefits: Funds, primarily federal, awarded to certain categories of students (veterans, children of deceased veterans or other deceased wage earners, and students with physical disabilities) to help finance their postsecondary education regardless of their ability to demonstrate need in the traditional sense.

Educational Expenses: See Cost of Attendance.

EFC: See Expected Family Contribution.

Eligible Applicant/Student:  An eligible applicant is a student who has submitted a Free Application for Federal Student Aid (FAFSA) and who meets the eligibility requirements of the FSA programs. The student must be currently enrolled or be a prospective student at a postsecondary school eligible to participate in the FSA programs.

Eligible Noncitizen: Someone who is not a US citizen but is nevertheless eligible for Federal student aid. Eligible noncitizens include US permanent residents who are holders of valid green cards, US nationals, holders of form I-94 who have been granted refugee or asylum status and certain other noncitizens. Noncitizens who hold a student visa or an exchange visitor visa are not eligible for Federal student aid.  

Employment (student): With reference to financial aid, the opportunity for students to earn money to help pay for their education. Federal Work–Study (FWS) is one program by which students with sufficient need can work to help pay their educational expenses.

Employment Allowance: An allowance to meet expenses related to employment when both parents (or a married independent student and spouse) are employed or when one parent (or independent student) qualifies as a surviving spouse or as head of a household. It is used in the need analysis formula for parents and student, if eligible.

Endorser:  An endorser is someone who does not have an adverse credit history and agrees to repay the loan if the borrower does not repay it.

Enrollment Status: An indication of whether you are a full-time or part-time student. Generally you must be enrolled at least half-time (and in some cases full-time) to qualify for financial aid.

Entitlement: Entitlement programs award funds to all qualified applicants. The Pell Grant is an example of such a program.

Entrance Counseling:  First-year, first-time students borrowing federal educational loans are required to receive counseling before they receive their first loan disbursement, during which the borrower's rights and responsibilities and loan terms and conditions are reviewed. 

Estimated Financial Assistance (EFA): The school's estimate of the amount of financial assistance that a student has been or will be awarded for the enrollment period for which a loan is sought. The EFA includes assistance from federal, state, institutional, scholarship, grant, financial need-based employment, or other sources.

Exit Counseling:  Title IV institutions must offer loan counseling to federal student loan borrowers who are leaving school or dropping below half-time enrollment. Exit counseling covers the borrower's rights and responsibilities, loan repayment, and the consequences of default. During the exit counseling, borrowers are also required to provide updated personal information, such as address, telephone number, and employer.  For Federal Perkins Loan borrowers, the interview must take place before the borrower leaves school. In the case of FFELP and Direct Loan student borrowers, the interview must take place shortly before the borrower ceases to be enrolled at least half time.

Expected Family Contribution (EFC):  A calculated amount, based on a formula established by Congress, of how much the student's family can be expected to contribute toward the cost of the student's education in an award year. The EFC is calculated when the CPS successfully processes a student's FAFSA information and is one component schools use to determine the amount and type of aid the student can receive. 

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Family Education Rights and Privacy Act of 1974 (FERPA):  Federal law that protects the privacy of student education records.

FAFSA:  See Free Application for Federal Student Aid.

FAFSA4Caster: Allows students and families to input financial information and receive an estimate of their federal aid eligibility before filing the FAFSA.

FAFSA on the Web (FOTW):  Allows students to complete and file a FAFSA on-line at www.fafsa.gov.

Federal Direct Student Loan (Direct Loan) Program: The collective name for the Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation Loan Programs. Loan funds for these programs are provided by the federal government to students and parents through postsecondary institutions.

Federal Interest Subsidy:  Assistance given by the federal government in which it pays the interest on a student's loan while the student is in school and during the grace period before loan repayment begins.

Federal Methodology (FM): A standardized method for determining a student’s (and family’s) ability to pay for postsecondary education expenses. The single formula for determining an EFC for Federal Pell Grants, campus-based programs, and Direct Loan programs; the formula is defined by law.

Federal Pell Grant: A federal grant program for needy postsecondary students who have not yet received a baccalaureate or first professional degree; administered by the U.S. Department of Education.

Federal Pell Grant Payment Schedule:  The schedule of Federal Pell Grant Awards. The Schedule is based on the EFC, the enrollment status, and the school COA. The schedule is usually posted in January on the IFAP website for the upcoming award year.

Federal Perkins Loan: One of the campus-based programs; a long term, low interest loan program for both undergraduate and graduate students at a current interest rate of 5%. At one time it was known as the Carl D. Perkins National Direct Student Loan Program (NDSL).

Federal Supplemental Educational Opportunity Grant (FSEOG): A federal Campus-Based grant program that provides grant assistance to undergraduate students who have not earned their first bachelor degree or first professional degree. Priority in awarding Federal Supplemental Educational Opportunity Grant (FSEOG) funds is given to students who have exceptional financial need and are Federal Pell Grant recipients.

Federal School Code:  A six-character number that ED assigns to each school that is eligible to participate in the FSA programs. A Federal School Code begins with 0 (zero), G, B or E and ends with a five digit number. When applying for federal student financial aid, students may list up to six Federal School Codes on their FAFSA to indicate which schools should receive their processed application data. The list of Federal School Codes is updated each year and is available online at: www.fafsa.ed.gov.

Federal Work-Study (FWS) Program: One of the campus-based programs; a part-time employment program which provides jobs for undergraduate and graduate students who are in need of earnings to meet a portion of their educational expenses.

Federal Student Aid (FSA):  The office within the U.S. Department of Education (ED) responsible for the overall management and administration of most of the Title IV programs and their operating systems.

Fees: These are charges that cover costs not associated with the student's course load, such as costs of some athletic activities, clubs, and special events.

Financial Aid: General term that describes any source of student assistance outside of the student or the student’s family. Funds awarded to a student to help meet postsecondary educational expenses. These funds are generally awarded on the basis of financial need and include scholarships, grants, loans, and employment.

Financial Aid Administrator: An individual who is responsible for preparing and communicating information pertaining to student loans, grants or scholarships, and employment programs, and for advising, awarding, reporting, counseling, and supervising office functions related to student financial aid. A financial aid administrator is accountable to the various federal, state, and institutional entities that provide aid and interprets and implements federal, state, and institutional policies and regulations, and is capable of analyzing student and employee needs and making changes where necessary.

Financial Aid Award: An offer of financial or in-kind assistance to a student attending a postsecondary educational institution. This award may be in the form of one or more of the following types of financial aid: repayable loan, a non-repayable grant and/or scholarship, and/or student employment.

Financial Aid Notification: The letter from a postsecondary institution that lets the student know whether or not aid has been awarded. If the student will be receiving assistance, the notification also describes the financial aid package. State agencies and private organizations may send students financial aid notifications separately from the postsecondary institution.

Financial Aid Package: A financial aid award to a student that can be comprised of a combination of forms of financial aid (loans, grants and/or scholarships, and employment).

Financial Need: The difference between the institution’s cost of attendance and the family’s ability to pay (i.e., EFC). Ability to pay is represented by the EFC for federal need-based aid and for many state and institutional programs.

Financial Need Equation: Cost of attendance minus expected family contribution equals financial need (COA - EFC = Need).

First-Time Borrower: A first-time borrower is one who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan on
July 1, 2013.

Fixed Interest:  On a fixed interest loan, the interest rate remains the same for the life of the loan.

FM: See Federal Methodology.

Forbearance: A temporary delay or reduction of loan payments agreed to by the lender and borrower. Interest continues to accrue during forbearance.

Free Application for Federal Student Aid (FAFSA): The financial aid application completed by the student, and the student’s parents if applicable, that collects household and financial information. The FAFSA is the foundation document for all federal need analysis computations and database matches performed for a student.

FSEOG: See Federal Supplemental Educational Opportunity Grant.

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Gift Aid: Educational funds such as grants or scholarships that do not require repayment from present or future earnings. See Grant.

Grace Period: The period of time that begins when a loan recipient ceases to be enrolled at least half time and ends when the repayment period starts. Loan principal need not be paid and, depending on the loan, interest does not accrue during this period.

Graduation Rate: The percentage of students who graduate from an institution. This shows students who began their studies as first-time, full-time degree- or certificate-seeking students and completed their degree or certificate within 150 percent of "normal time." For example, for a four-year school, the graduation rate would be the percentage of students who completed that program within six years or less.

Grant: A type of financial aid that does not have to be repaid; usually awarded on the basis of need, possibly combined with some skills or characteristics the student possesses. Also see Gift Aid.

Gross Income:  Income before taxes, deductions, and allowances have been subtracted.

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Higher Education Act (HEA):  Federal legislation passed in 1965, and its subsequent amendments and reauthorizations (most recently in 1998), authorizing the majority of Federal postsecondary student financial aid programs and mandating that the programs be regulated and administered by the Secretary of Education.

Homeless:  An individual is considered homeless if he or she lacks fixed, regular and adequate housing. A student may be homeless if he/she is living in a shelter, park, motel or car, or temporarily living with other people because they have nowhere else to go.

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Income: Amount of money received from any or all of the following: wages, interest, dividends, sales or rental of property or services, business or farm profits, and subsistence allowances such as taxable Social Security benefits and child support.

Income Protection Allowance (IPA): An allowance against income for the basic costs of maintaining family members in the home. The allowance is based upon consumption and other cost estimates of the Bureau of Labor Statistics for a family at the low standard of living.

Independent Student: A student who: (a) will be 24 years of age by December 31 of the award year; (b) is an orphan or in foster care, or a ward of the court, at any time when the student was 13 years of age or older; (c) is an emancipated minor or is in legal guardianship as determined by a court in the student’s state of legal residence; (d) is an unaccompanied youth who is homeless or who is at risk of homelessness and is self-supporting, as documented during the school year; (e) is a veteran; (f) is serving on active duty in the U.S. Armed Forces for purposes other than training; (g) is married; (h) is a graduate or professional student; (i) has legal dependents other than a spouse; (j) has dependent children; or (k) presents documentation of other unusual circumstances demonstrating independence to the financial aid administrator.

Institutional Student Information Record (ISIR):   An electronic output document transmitted to the schools the student specified on the application and to state agencies. Sent by FSA's Central Processing System (CPS), the ISIR summarizes information submitted on a student's Free Application for Federal Student Aid (FAFSA) and provides the student's Expected Family Contribution (EFC).

Interest:  A fee charged to the borrower for use of a lender's money.

Interest Rate: The percentage of a sum of money charged to a borrower for its use.

Investment Plans: Coverdell Educational Savings Accounts and or state 529 plans are examples of educational investment plans that can be used to assist with higher education expenses, usually sponsored by commercial banking institutions.

Iraq and Afghanistan Service Grant (IASG): A non-need-based federal grant program for students whose parent or guardian died as the result of military service in Iraq or Afghanistan after September 11, 2001. If a student is eligible for a Federal Pell Grant, he or she cannot receive an IASG.

IRS Data Retrieval Tool:  Available on  the FAFSA on the Web (FOTW), to enable financial aid applicants and their parents to retrieve their income tax information electronically and directly from the Internal Revenue Service (IRS) data base. 

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Job Placement Rate:  The percentage of graduating students who obtained employment either in the recognized occupation for which they were trained or in a related comparable recognized occupation within a determined timeframe after receiving their degree or certificate.

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Legal Dependent (of Applicant): A biological or adopted child, or a person for whom the applicant has been appointed legal guardian, and for whom the applicant provides more than half support. In addition, a legal dependent is a person who lives with and receives at least half support from the applicant and will continue to receive that support during the award year. For purposes of determining dependency status, a spouse is not considered a legal dependent.

Lifetime Eligibility Used (LEU):  The amount of all Federal Pell Grant aid (in percentage) awarded divided by the amount of Pell Grant aid a student would have been eligible to receive based on full-time enrollment. The amount of Federal Pell Grant funds a student may receive over his or her lifetime is limited by federal law to be the equivalent of six years of Pell Grant funding.

Loan:  An advance of funds guaranteed by a signed promissory note in which the recipient of the funds promises to repay a specified amount under prescribed conditions. A financial source that is available to students and their parents through student loan programs with varying interest rates and repayment provisions to supplement the family's financial resources, scholarships, and grants.

Loan Default Rate: The percentage of student borrowers – undergraduate and graduate – who have failed to repay their federal loans within three years of leaving a particular school. A low loan default rate could mean that the institution’s students are earning enough income after leaving school to successfully repay their loans.

Loan Disclosure Statement:  A statement sent to a loan borrower by the lender before or at the time a loan is disbursed, as well as before the start of the repayment period. The purpose of the disclosure statement is to provide the borrower with thorough and accurate information about the loan terms and the consequences of default.

Loan Forgiveness:  The cancellation of all or some portion of a student’s remaining federal student loan balance. If the loan is forgiven, the student is no longer responsible for repaying that remaining portion of the loan.

Loan Period:  The period of enrollment for which a loan application is certified. Also known as period of enrollment.

Loan Servicer:  A company that collects payments on a loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a loan on behalf of a lender.  The name of a student’s federal student loan servicer can be found on the National Student Loan Data System at  www.nslds.ed.gov.
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Master Promissory Note (MPN): A promissory note for the Federal Perkins Loan and Direct Loan programs that allows borrowers to apply for multiple loans during a student’s attendance at a postsecondary institution.

Median Borrowing: The amount in federal loans the typical undergraduate student takes out at a particular institution. It also indicates the monthly payments that an average student would pay on that amount using a 10-year repayment plan.

Merit-based Aid:  Financial aid awarded because of a student’s achievement or talent in a particular area, such as academics, athletics, music, etc.

Methodology:  Refers to the system used to calculate the expected family contribution, see Federal Methodology.

Military Scholarships:  Reserve Officer Training Corps (ROTC) scholarships available for the Army, Navy, and Air Force at many colleges and universities throughout the United States. These scholarships cover tuition and fees, books and supplies, and include a subsistence allowance.

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National Health Service Corps Scholarship (NHSC):  Scholarship program for students who pursue full-time courses of study in certain health professions disciplines, and are willing to serve as primary care practitioners in underserved areas after completing their education.

National and Community Service:  A program established through the National and Community Service Trust Act of 1993 designed to reward individuals who provide community service with educational benefits and/or loan forgiveness or cancellation.

National Student Loan Data System (NSLDS):  An ED integrated system that collects and reports information about the financial aid history of students who receive federal student aid and maintains that information in an online database available to the financial aid community. The database stores information about loans, grants, students, borrowers, lenders, guaranty agencies (GAs), schools and loan servicers. The CPS conducts a match of FAFSA data against this database to confirm the student’s identification and eligibility for federal student financial aid. A user ID and Password are required to access the database.

Need:  The difference between the Cost of Attendance (COA) and the Expected Family Contribution (EFC) is the student's financial need. It is the gap between the cost of attending the school and the student's resources.

Need Analysis:  A system by which an applicant’s ability to pay for educational expenses is evaluated and calculated. Need analysis consists of two primary components: (a) determination of an estimate of the applicant’s and/or family’s ability to contribute to educational expenses; and (b) determination of an accurate estimate of the educational expenses themselves.

Need Analysis Formula:  Defines the data elements used to calculate the EFC; there are two distinct formulas: regular and simplified. The formula determines the EFC under the Federal Methodology.

Need-based Aid:  Student assistance awarded because a student’s financial circumstances would not permit him or her to afford the cost of a postsecondary education.

Net Costs: An estimate of the actual costs that a student/family will need to pay during the school year to cover education expenses at a particular school. Net costs are determined by taking the institution's cost of attendance and subtracting your grants and scholarships.

Net Price: An estimate of the actual cost that a student and his family need to pay in a given year to cover education expenses for the student to attend a particular school.  Net price is determined by taking the institution's cost of attendance and subtracting any grants and scholarships for which the student may be eligible.

Net Price Calculator:  A tool that allows current and prospective students, families, and other consumers to estimate the net price of attending a particular college or career school.

Non-Need-based Aid:  Aid based on criteria other than need, such as academic, musical, or athletic ability. Also, refers to federal student aid programs where the EFC is not part of the need equation.

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Office of the Inspector General (OIG/IG):  An office within each federal department that investigates fraud, abuse, and misrepresentation. School officials are required to report suspected cases to the IG and to cooperate with the OIG in any investigations it conducts.

Origination:  When a school creates a new Pell Grant or Direct Loan in the COD system.

Origination Fee:  A fee paid by a borrower to help defray the cost of making a loan.

Overpayment:  Any federal student aid paid in excess of the amount the student is eligible to receive. Except for Federal Work-Study funds (which are earned) the student must repay an overpayment unless adjustments can be made to eliminate the overpayment within the same award year.

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Packaging:  The process of determining the types and amounts of financial aid awards (loans, grants, scholarships, and employment) and offering those awards to a student.

Parent Contribution:  A quantitative estimate of the parents’ ability to contribute to the postsecondary educational expenses of a dependent student.

PDF FAFSA:  A version of the FAFSA viewed using Adobe Acrobat which may be completed and filed like a paper FAFSA.

Personal Identification Number (PIN):  An identifier that allows students and parents to access their personal information in ED systems, The PIN is also used to electronically sign the FAFSA and make corrections electronically to data submitted. A PIN should always be protected, and never provided to anyone other than the person for whom it was created.

PLUS: See Direct PLUS Loan. 

Postsecondary Institution:  An institution providing education beyond the high school level. The term refers to trade and technical schools, two-year colleges, community colleges, and four-year colleges and universities.

Prepaid Tuition Plan:  A qualified tuition program through which one buys tuition credits of certificates for a future date at current prices.

Principal (of a loan): The amount of money borrowed through a loan; does not include interest or other charges, unless they are capitalized.

Priority Deadline:   The latest date a school recommends that students apply for financial aid for the award year to be able to receive maximum consideration for institutional funds. Many schools award the bulk of their institutional financial aid to students who apply by this deadline.

Professional Judgment (PJ): The financial aid administrator’s discretion, based on the documented special circumstances of the student, to change the data elements used in determining eligibility for federal student aid or adjust a student’s costs.

Promissory Note: The legal document which binds a borrower to the repayment obligations and other terms and conditions which govern a loan program.
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Reauthorization:  The process of continuing and changing current legislation because the existing law has expired and has to be reenacted. It is conducted every five to seven years in the case of the Higher Education Act (HEA). The most recent HEA reauthorization was in 1998.

Refund Policy:  A school policy that determines the conditions under which a student is entitled to a refund of payments made to the school, or whether the student owes the school for outstanding charges.

Reinstatement (of borrower FSA eligibility): A process by which a borrower with a defaulted FSA loan may regain eligibility for FSA aid by adhering to strict repayment requirements.

Renewal FAFSA:  A FAFSA that is pre-populated with the student's prior year data and used for updating for the upcoming (next) award year. To use the Renewal FAFSA, the student must have an eligible FAFSA transaction for the preceding award year. The student may access the Renewal FAFSA via the Web.

Repayment Schedule: A plan that is provided to the borrower at the time he or she ceases at least half-time enrollment. The plan sets forth the principal and interest due on each installment and the number of payments required to pay the loan in full. Additionally, it includes the interest rate, the due date of the first payment, and the frequency of payments.

Reserve Officers Training Corps Scholarship Program: See ROTC Scholarship Program.

Retention Rate:  Measures the percentage of first-time students who are seeking bachelor's degrees who return to the institution to continue their studies the following fall.

Return of Title IV Funds (R2T4):  When a student withdraws from school without completing a payment period or period of enrollment, the school must determine the amount of Title IV funds "earned" for the portion of the payment period or period of enrollment the student attended. Unearned federal student aid must be returned to each affected program, as applicable.

ROTC Scholarship Program: Competitive scholarship that pays for tuition, fees, books, and a monthly living stipend and other benefits in exchange for participating in drills and classes during the academic year, military camp during the summer, and, upon graduation, full-time active duty in the military for at least four years.

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SAR: See Student Aid Report.

SAR Acknowledgment: A non-correctable one-page Student Aid Report. Students who file a FAFSA on the Web (FOTW) or submit on-line corrections without providing a valid e-mail address receive this acknowledgment.

Scheduled Award:  The maximum grant amount a student is eligible to receive for the award year if they are enrolled full-time for the full school year.  This amount is calculated from the information provided by the student (and family) when the FAFSA was filed. 

Scholarship: A form of financial assistance that does not require repayment or employment and is usually made to students who demonstrate or show potential for distinction, usually in academic performance.

Section 529 Plans:  Prepaid tuition plans and college savings plans, named for the section of the IRS code that authorizes them. Also known as Qualified Tuition Programs (QTPs).

Self-Help Aid:  Financial aid in the form of loans or student employment.

Service Academy: The five postsecondary institutions administered by branches of the military [U.S. Military Academy, U.S. Air Force Academy, U.S. Naval Academy, U.S. Coast Guard Academy, and U.S. Merchant Marine Academy].

Service Obligation:  The teaching service requirement set out in the Agreement to Serve (ATS) that a student must sign to receive a TEACH Grant. By signing the ATS, the student agrees to teach (1) full-time (2) in a high-need field (3) at a low-income school or educational service agency that serves certain low-income schools, and (4) for at least four complete academic years within eight years after completing (or ceasing enrollment in) the course of study for which the student received the grant. If the teaching service agreement is not completed, the amount of the TEACH Grants received will be converted to a Direct Unsubsidized Loan that the student must repay with interest charges from the date of each TEACH Grant disbursement

Shopping Sheet: The Financial Aid Shopping Sheet (previously referred to as “Know Before You Owe” and the “Model Financial Aid Offer Form”) is a consumer tool that is designed to simplify information that prospective students receive about costs and financial aid so that they can make informed decisions about which postsecondary institution to attend.

Short Term Advance for Books:  The Short Term Advance for Books is available to assist students with books and supplies expenses by “advancing” up to $600 of their financial aid to them.  For details refer to our website: www.finaid.ucf.edu under > Receiving Aid > Funds for Books.  

Simplified Needs Test (SNT): An alternate method of calculating the EFC for families with incomes of less than $50,000, and who meet one of the following conditions: filed, or are eligible to file, an IRS Form 1040A or 1040EZ, are not required to file an income tax return, who have a household member who received benefits through a federal means-tested benefit program, or is a dislocated worker. The SNT excludes all assets from consideration in the calculation of the EFC.

Social Security Number (SSN):  The nine-digit number assigned to an individual by the Social Security Administration. The SSN is used as a student identifier in all the federal student aid programs.

Student Aid Report (SAR): The official notification sent to a student as a result of the CPS receiving an applicant record (FAFSA) for a student. The SAR summarizes applicant information, provides the EFC for a student, and displays other special messages related to the student’s application. In some instances the SAR may need to be submitted to the financial aid office at the school the student plans to attend, but only if the school requests it. Depending on how the student submits the FAFSA, the SAR is either a paper or electronic document.

Student Contribution: A quantitative estimate of the student’s ability to contribute to postsecondary expenses for a given year.

Subsidy: The money the federal government uses to help underwrite student aid programs.
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Taxable Income: Income earned from wages, salaries, and tips, as well as interest income, dividend income, business or farm profits, and rental or property income.

Teacher Education Assistance for College and Higher Education (TEACH) Grants: A federal grant awarded to undergraduate and graduate students who want to pursue a teaching career in a high-need field and who agree to teach in a school serving low-income students (Title I schools) after graduating. If a recipient does not fulfill the service requirement, funds convert into a Direct Unsubsidized Loan.

Textbook Purchase Program:  For consideration, students must “opt-in” each semester on their myUCF Student Center.  Eligible students can then purchase up to $600 on required books and supplies at the on-campus UCF Bookstores by simply presenting their UCF ID Card.  For details refer to our website: www.finaid.ucf.edu under > Receiving Aid > Funds for Books.   

Title IV Programs: Those federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended. Includes the: Federal Pell Grant, Iraq and Afghanistan Service Grant (IASG), Teacher Education Assistance for College and Higher Education (TEACH) Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, Federal Perkins Loan, Direct Loan, and Direct PLUS.

Transfer Rate:  The percentage of the full-time, first-time students who transferred to another institution.

Transfer Student Monitoring Process:  The four-step process FAAs use to automatically receive information from the National Student Loan Data System (NSLDS) database pertaining to the federal student aid eligibility of midyear transfer students. The four steps to the process are: Inform, Monitor, Alert and Review.

Tuition:  The amount of money charged for instruction and use of educational facilities such as libraries.

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Unaccompanied: means the individual is not living in the physical custody of his/her parent or guardian.

Undergraduate Student:  A degree-seeking student at a college or university who has not earned a first bachelor's degree.

Unearned Aid:  In a Return calculation, the difference between Title IV aid that was disbursed or could have been disbursed for the payment period or period of enrollment and the amount of Title IV aid that was earned when a student withdrew.

Unemployment Benefits:  Temporary and partial wage replacement to workers who have become unemployed.

Unmet Need: The difference between a student’s total cost of attendance at a specific institution and the student’s total available resources.

Untaxed Income: All income received that is not reported to the Internal Revenue Service (IRS) or is reported but excluded from taxation. Such income would include but not be limited to untaxed capital gains, interest on tax-free bonds, dividend exclusion, and military and other subsistence and living allowances.

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Variable Interest Rate:  An interest rate that is recalculated on a periodic basis, usually based on the prime rate or the T-bill rate. For FSA loans, this rate changes yearly on July 1.

Verification:  The process a school follows to check the accuracy of the information reported by the student on the FAFSA. The information reported is compared against documents, such as the IRS Tax Return Transcripts and signed Verification Worksheets, the student provides to the school.

Veteran:  For FSA purposes, such as determining dependency status, a veteran is a former member of the U.S. Armed Forces who served on active duty (other than for training purposes) and was discharged other than dishonorably.

Veterans Educational Benefits: Assistance programs for eligible veterans and/or their dependents for education or training.  For details, contact Veteran Services at UCF.

Vocational Rehabilitation: Programs administered by state departments of vocational rehabilitation services to assist individuals who have a physical or mental disability which is a substantial handicap to employment.

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Work-Study Program (Federal):  See Federal Work-Study (FWS) Program.

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Youth: means the individual is 21 years of age or younger or still enrolled in high school as of the day of the FAFSA application is being signed.

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