American College Testing Program (ACT): Service agency that analyzes family need and family contribution.
Associate's Degree: An award that normally requires at least 2 but less than 4 years of full-time equivalent college-level work.
Bachelor's Degree: An award (baccalaureate or equivalent degree, as determined by the Secretary, U.S Department of Education) that normally requires at least 4 but NOT more than 5 years full-time equivalent college-level work.
Campus-based programs: The following federal programs are considered campus based programs: Supplemental Education Opportunity Grant Program (SEOG), Federal College Work-Study Programs (CWSP), and the Federal Perkins Loan Program. Funds for these programs are awarded by the college's financial aid director and are based upon the school's allocation of funds.
Consolidation: Combining loans; transferring all loans to one lender.
Cost of attendance: Total amount it will cost a student to attend a particular school. The expenses considered as part of the cost of attendance under the Pell Grant Program include: tuition and fees, room and board, books supplies, transportation, childcare, handicapped allowance, and miscellaneous costs. The expenses considered as part of the cost of attendance under the campus-based programs and Stafford Student Loan Program includes: tuition and fees, books, supplies, transportation, room and board, personal expenses, dependent care allowance, handicapped allowance.
Debt burden: The portion of a college graduate's earnings that will be needed to repay student loans. Debt burden is usually the highest during the first years of employment, decreasing as earnings increase.
Default: Failure of the borrower to meet the payments due on a loan. Defaults are recorded on a person's permanent credit record and may prevent the individual from obtaining loans in the future.
Doctoral Degree: The highest award a student can earn for graduate study. The doctoral degree classification includes such degrees as Doctor of Education, Doctor of Juridical Science, Doctor of Public Health, and the Doctor of Philosophy degree in any field such as agronomy, food technology, education, engineering, public administration, ophthalmology, or radiology.
Expected Family Contribution: Figure determined by the need analysis services using a federally approved formula. The figure is the total amount the student and family are expected to contribute to the student's education. Income assets, savings and the net value of all real estate are included in computing expected family contribution.
Federal Application for Federal Student Aid (FAFSA): Form used to apply for a Pell grant and other federal scholarship programs.
Federal Methodology: Need analysis method developed by Congress and used to determine eligibility for federal student aid programs.
Financial Aid Form: Federal Application form used to determine a family's financial contribution and financial need. The college Scholarship Service of the College Board processes this form and sends the results to colleges and universities. This form may be used to apply for a Pell Grant, a state award, a Stafford Student Loan, and other types of financial aid.
Financial Aid Package: Total amount of financial assistance a student receives as listed in the school's financial aid award letter. Grants, loans, and work programs are included in a student's financial aid package. Financial aid from the college or university, as well as any other outside scholarship or loan programs, are also included in the financial aid package.
Financial Need: Difference between two numbers: (1) the expected family contribution to a student and (2) the total cost of attendance at a school.
First Professional Student: A student enrolled in any of the following degree programs: Chiropractic (D.C); Osteopathic Medicine (D.O); Dentistry (D.D.S. or D.M.D); Pharmacy (Pharmacy (Pharm.D.); Law (L.L.B., J.D.); Podiatry (D.P.M., D.P, or Pod .D); Medicine (M.D.); Theology(M.Div., M.H.L., B.D., or Ordination); Optometry (O.D); Veterinary Medicine (D.V.M.).
First Professional Degree: An award that requires completion of a program that meets all of the following criteria: (1) completion of the academic requirements to begin practice in the profession; (2) at least 2 years of college work prior to entering the program; and (3) a total of at least 6 academic years of college work to complete the degree program, including prior required college work plus the length of the professional program itself. First -professional degrees may be awarded in the following fields: Chiropractic; Osteopathic Medicine; Dentistry; Pharmacy; Podiatry; Medicine; Theology; Optometry; Veterinary Medicine.
Guarantee agency: State agency that administers the Stafford Student Loan Program, the Parent Loan for Undergraduate Students (PLUS), and the Supplemental Loans for Students (SLS) Program. There are guarantee agencies for all students.
Independent student: To be classified as an independent student, a person must meet at least one of the following criteria:
Student is at least 24 years old.
Student is enrolled in graduate or professional school.
Student has legal dependents other than a spouse.
Student is a ward or orphan of the court.
Student is a veteran of the Armed Forces.
Student is married.
Interest subsidy: Payment of interest on certain loans made by the federal government while the student is enrolled in school.
Institutional Grants (Funded): these are institutional resources restricted for student aid, such as scholarships and fellowships.
Institutional Grants (Unfunded): these are scholarships and fellowships awarded to students from unrestricted institutional resources.
Master's Degree: An award that requires the successful completion of a program of study of at least the full time equivalent of 1 but not more than 2 academic years of work beyond the bachelor's degree.
Merit-Based Aid: Financial aid that looks at a student's financial need and depends on a student's academic, artistic or athletic merit or some other criteria to determine his or her eligibility for the award.
Need Analysis: Process that determines a student's eligibility to receive financial aid. The parents' and student's income and assets are analyzed to determine the amount of money the family is expected to contribute to meeting the student's educational expenses. Need analysis computation formulas are approved by Congress and are adjusted annually. Two of the most commonly used undergraduate need analysis forms are the Financial Aid Form (FAF) of the College Scholarship Service and the Family Financial Statement (FFS) of the American College Testing Program.
Need-Based Aid: Financial Aid that depends on a student's financial need.
Need/Merit-Based Aid: Financial aid that looks at a student's financial need and depends on a student's academic, artistic or athletic merit or some other criteria to determine his or her eligibility for this award.
Non Need/Non-Merit-based Aid: Financial aid that has special qualifying conditions other than need or merit.
Origination Fee: Amount charged by a bank to process a student loan. The amount of the fee is deducted from the dollar amount of the loan.
Principal: Amount of the loan requested and approved upon which interest will be charged.
Promissory Note: Binding document a student signs before receiving a loan check. The promissory note included information about the terms of the loan.
Repayment Schedule: List of monthly loan payments outlining principle and interest charges.
Simplified Need Test Formula: Formula that uses a limited number of data to calculate a student's expected family contribution. To qualify for a simplified need test a family's adjusted gross income must be $50,000 or less, and the family members must file the appropriate tax returns.
Unsecured debt: Terms of the loan repayment that do not require collateral or other types of security.
Variable interest: Rate of interest that fluctuates according to the ups and downs of some interest rate index. The initial rate on a variable interest loan is lower than on a loan with a fixed interest rate because the lender is protected from potentially damaging changes in the overall interest rate.