Adjusted Gross Income (AGI)  –  You and/or your family’s total gross income minus specific deductions.

Award Package – Package provided by your prospective school that includes the total amount of federal and non-federal financial awards for the year. Additionally, it will show your projected out of pocket expense for the academic year.


Borrower – A person who borrows money under an agreement that it will be paid back.


Cost of Attendance (COA) – The estimated total costs of college for one single year, which includes direct and indirect expenses: tuition, books, room & board, and travel etc. Cost of Attendance plays a major role in your award package given by the institution as it determines how much aid you may be eligible for.


Deferment – A period where your payments are temporarily postponed.

Dependency Status – To qualify for federal and state aid, you must know whose information you will report on your FAFSA. As a dependent student you must report your earnings as well as your parents/guardians, where as an independent student will only report their own information (if married include their spouses) on the FAFSA. Dependency status will be based off your answers to questions 46 – 58 on the FAFSA.

Disbursement – Funds that are paid out.


Endorser – Someone who agrees to pay the loan if the borrower does not.

Entrance Counseling  –  A requirement given to first-time borrowers to understand the terms and conditions of the Direct Loan Program.

Exit Counseling  –  A requirement administered when students drop below half-time and/or leave school that provides important information for repaying back federal loans.

Expected Family Contribution (EFC) – The information submitted on the FAFSA determines your Expected Family Contribution; where the government determines how much you should contribute to you or your child’s education. It takes into account adjusted gross income, household size, and assets to determine if you are eligible for need-based aid.


Federal Work Study (FWS) –  Provides part-time employment through the institution for financially needy students.

Financial Aid – Money given to offset educational expenses. Financial aid comes in various forms: scholarships, grants, loans, and work-study.

Forbearance – The period where your monthly payments are temporarily reduced or suspended. To qualify for a forbearance, you must show the lender proof of financial hardship. Additionally, the interests that accrues during this time period will be added to the overall principle balance even though payments are postponed.

Free Application for Federal Student Aid (FAFSA) – Helps determine the awarding federal and state aid. The FAFSA is the first step in seeking a post-secondary education and requires you and/or your family to provide their financial information. This information will determine how much aid the student may qualify for.


Grace Period – A six-month period of time where you do not have to make a payment to the loan servicer when you leave school or drop below halftime status.

Grant – Free money given by federal, state, organizations, and institutions to offset college expenses. Some grants maybe based on financial need, while others maybe based off other criteria


Interest – Fee charged from the lender to the borrower for the life of the loan.

IRS Data Retrieval Tool (DRT) – Allows students and parents to electronically link their tax information to the FAFSA. It is recommended to utilize this tool for accuracy to ensure that your Expected Family Contribution (EFC) is accurate.


Loans – Money borrowed by federal and private lenders that must be paid back with interest.


Master Promissory Note (MPN) – A legal document where you agree to repay your loans, interests, and fees to the US Department of Education.

Merit-based Aid – Financial award that is based off of academic performance, athletic ability, special skills, and/or interests. Families who do not qualify for need-based aid, may be eligible to qualify for merit-based aid.


National Student Loan Data System (NSLDS) – A database operated by the U.S. Department of Education to keeps track of your federal student loan history.

Need-based Aid –  Aid that is determined by you or your family’s annual income; the annual income your family makes and members within the household will determine if you are eligible for need-based aid.


Pell Grant – Grant given by the federal government for students with a strong financial need, which is determined by the family’s income, size, and assets.


Refund – When your financial aid exceeds the charges on your student account, it will generate a refund.

Repayment – The amount of funds borrowed that must be repaid to the lender.


Satisfactory Academic Progress (SAP) –The established grade point average you must maintain to continue to be eligible for federal, state, and institutional aid. As an undergrad you must maintain a minimum of a 2.0 GPA or 3.0 GPA if you are graduate student.

Scholarship – A grant awarded to a student based on academic performance, athletic ability, special skills, and/or interests that does not need to be repaid.

Student Aid Report (SAR) – A summary of the information you provided that breaks down your financial aid eligibility. Upon completion of the FAFSA, you will receive a Student Aid Report. It summarizes the information you provided and breaks down your financial aid eligibility.

Subsidized loans – Loans awarded based on financial need where the federal government pays the interest on the loan while the student is enrolled at least part-time.


Unsubsidized loans – Non-need-based loans where interests accrues once the loan is disbursed to the student’s account.


Click here to learn more financial aid terms.

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