Take a few minutes to get to know these Financial aid terms – The application process will be easier and quicker as a result
The college admissions and financial aid process is full of terminology that can be somewhat intimidating to families applying for the first time.
That’s why our Education Team put together the following glossary full of financial aid terms that you’ll often see when applying for colleges and applying for financial aid.
Your Need-to-Know Terms
Academic Year – An academic year is one complete school year at the same school, or two complete, half years at different schools. For schools that have a year-round program of instruction, nine months is considered an academic year.
Award Year – School year for which financial aid is used to fund a student’s education. This is typically the 12-month period that begins on July 1 of one year and ends on June 30 of the following year.
Cost of Attendance (COA) – The overall cost of attendance at a school including tuition, fees and an estimate of living expenses. Each school determines its COA by using federal regulations.
College Scholarship Service (CSS) Profile – The CSS Profile is a comprehensive report of a students’ family financial information. It allows colleges to determine which prospective students have the most need for financial assistance. Many private colleges require all applicants to complete a CSS Profile.
Custodial Parent – The parent that lives with and cares for their minor child for all (sole physical custody) or most (primary physical custody) of the time.
Data Release Number (DRN) – The DRN is a number assigned to your Federal Student Aid application. It is also listed on your Student Aid Report and your confirmation page. The DRN is provided to you as a password to allow changes to be made to your Free Application for Federal Student Aid (FAFSA).
Dependent Student – A student who is assumed to have the support of parents. In this case, the parents’ information has to be assessed along with the student’s.
Direct Cost – Items that will appear on your University bills if you live on campus. Examples include tuition, fees, and room and board.
Emancipated Minor – 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.
Entrance Counseling – makes certain that you understand the terms and conditions of your loan and your rights and responsibilities.
Expected Family Contribution (EFC) – The EFC is the amount of money that students and their parents can be expected to pay toward the cost of college. A student’s need for assistance is established by subtracting EFC from the total cost of attendance (COA).
Fees – A monetary amount charged to students at a school, college, university or other place of learning that is in addition to any matriculation and/or tuition fees.
Financial Aid – Money to assist in paying for college or career school. Grants, work-study, loans, and scholarships help make college or career school affordable.
Financial Need – Difference between the cost of attendance and your Expected Family Contribution.
Financial Need Based Aid – Financial aid that you can receive if you have financial need and meet other eligibility criteria.
Free Application for Federal Student Aid (FAFSA) – FAFSA is exactly what it stands for, a free application for federal student aid. The application is the number one most important document to secure financial aid. Within the FAFSA are many of the terms this glossary defines.
FSA ID (Federal Student Aid ID) – You must get a PIN (fafsa.ed.gov) to apply online for federal financial aid and access your federal student aid records. Your PIN is considered your signature when you apply online for federal aid.
Gift Aid – Money received that does not have to be repaid.
Grant – A grant is financial aid that is not repaid by the student. It is often awarded based on financial need or merit.
Independent Student – A student who will not receive any financial support for their education from their parents or guardians.
Indirect Cost – All portions of the total cost of attendance except tuition and fees.
Institutional Documentation Service (IDOC) – IDOC is a service by the College Board that colleges use to collect information such as federal tax returns of students and their families.
In-State Student – Students who live in a state pay the in-state level of tuition at a state school.
Internal Revenue Service Data Retrieval Tool (IRS DRT) – Allows students and parents who filed a U.S tax return with the Internal Revenue Service (IRS) to access the tax return information needed to complete the Free Application for Federal Student Aid (FAFSA).
Merit Based Aid – Financial aid offered in recognition of student achievements (e.g. academic, athletic, artistic, etc.).
Non-Custiodial Parent – A parent who might have their child on a limited basis or only have visitation rights.
Out-Of-State Student – The rate that students coming from outside the state, including international students, pay to attend a public state school.
Promissory Note – The promissory note is the legal document that lays out the terms and conditions (i.e. interest rate, length of loan) for an education loan.
Parent Plus Loan – federal loans that the parents of dependent undergraduate students can use to help pay for school.
Pell Grant – Pell grants range from about $500 to $5,500 and are awarded to undergraduate students seeking their first baccalaureate degree. Typically, higher grant amounts are awarded to students who are enrolled full-time.
Room & Board – Refers to the student housing accompanied by a meal plan.
Self-Help – Aid that an individual takes responsibility for, work studies, loans, etc.
State Aid – Financial assistance that a state offers to eligible residents to help reduce their educational costs.
Scholarship – A grant-in-aid to a student (as by a college or foundation).
Student Aid Index – The number that the financial aid staff uses to determine how much financial aid you would receive if you were to attend their school.
Student Aid Report (SAR) – You receive your student aid report after the completion of FAFSA. It details your EFC and answers to possible FAFSA questions.
Subsidized Loan – Subsidized loans are loans by which the government pays the interest while the student is enrolled and for six months after the student leaves school. Interest is also paid by the government during periods of deferment. Subsidized loans are awarded based on financial need.
Tuition – The amount of money you owe for receiving instruction, materials, and/or supplies, or for the rental or purchase of equipment, for a course of study at your institution.
Unsubsidized Loan – Unsubsidized loans are loans in which the government does not pay interest. Payments do not begin until six months after graduation or six months after the student drops under the half-time enrollment threshold. These loans are not based on financial need.
Work Study – A part-time on-campus or off campus job to pay for school.
Visit our website for more information like this, and reach out to our financial aid and college affordability experts at 610-422-3530 to start your college planning journey today.
