Financial Aid Glossary
year - If your college is on a semester calendar, the
academic year is divided into two terms (usually fall and spring).
If your college is on a tri-mester calendar, the academic year is
divided into three terms. The academic year is divided into four
periods of about 12 weeks each if your college is on a quarter
system. You will be offered financial aid based on your college's
academic year and your enrollment status.
AGI - Adjusted Gross
Income. Most financial aid forms require parents or students to
state their taxable AGI based on income minus maximum allowable
Loans - These private student loans from banks or
other lending institutions are not federally supported or
guaranteed. Students must be enrolled to apply for these loans.
Assets include cash on hand, in checking and savings accounts,
trusts, stocks, bonds and other securities, real estate holdings
(other than the family home), income-producing property, business
equipment and business inventory. You will need to report your own
and/or your parents' assets on the Free Application for Federal
Student Aid (FAFSA). Assets are considered in determining your
Expected Family Contribution (EFC).
Award Letter or Notice - See Financial Aid
Supplies - Estimate of costs for books and supplies.
Your actual cost may be different from the estimate based on the
classes you take and whether you buy new or used books or even
share them with a classmate to save money.
The person who signs the promissory note to take out a loan. The
borrower is the person responsible for repaying that loan.
Capitalization - When
you borrow money through an unsubsidized loan and do not make
interest payments while you are in school or during your grace
period, the interest that accumulates during those periods is added
to the principal balance of your loan. This is called
capitalization. Capitalization increases the amount of your monthly
payments and the total amount you will have to repay on that
COA - See Cost of Attendance
Colorado Commission on Higher
Education (CCHE) - The State of Colorado commission
that administers state financial aid programs and establishes other
criteria for public institutions of higher education.
Colorado Department of Higher
Education (CDHE) - The mission of the Department of
Higher Education is to improve the quality of, ensure the
affordability of, and promote access to, post-secondary education
for the people of Colorado. In pursuing its mission, the Department
of Higher Education will act as an advocate for the students and
institutions of post-secondary education and will coordinate and,
as needed, regulate the activities of the state's post-secondary
Collateral - An item of
value (such as a house or a car) that is pledged as security for a
loan. The lender can repossess the collateral if the loan is not
Assist™ - The designated guarantor of student loans
for the State of Colorado, College Assist™ is a division of the
Colorado Department of Higher Education.
Consolidation - The
action of combining several loans or liabilities into one loan. Put
another way, debt consolidation is the process of taking out a new
loan to pay off a number of other debts.
Contract or binding
contract - A contract is a legally binding exchange of
promises or agreement between parties that the legal system will
An individual or entity that signs a legal document on an equal
basis with the signer. On a promissory note, all cosigners are
individually and jointly liable for repayment of the full debt.
Cost of attendance
(COA) - COA is an estimate of the amount it will cost
you to attend college for one academic year. COA varies by college
and/or by program within a college. Your COA may be different than
a friend's COA even if you are both going to the same college. COA
includes: Tuition & Fees + Room & Board + Books &
Supplies + Miscellaneous Expenses = Cost of Attendance (COA). In
addition, child care and costs related to a disability may be
included when appropriate.
bureau - A credit bureau is an organization that
maintains information on your credit history. If you default on a
student loan it will be reported to all credit bureaus and that
default will appear on your credit report. Credit bureaus report
your credit history to companies and organizations that wish to
know about your financial history when making a decision whether to
lend you money. For example, if you wish to obtain a loan to
purchase an expensive item like a car or home or when you apply for
a credit card, lenders will request your credit report. A poor
credit rating will negatively affect your ability to borrow
CollegeInvest - Created
by the State of Colorado in 1979 as a division of the Colorado
Department of Higher Education, CollegeInvest is Colorado's leading
education financing resource. CollegeInvest provides expert
information, simple financial planning tools, scholarships and
tax-advantaged college savings.
Profile - The College Scholarship Service Profile is a
financial aid form that many colleges and universities use to
determine how much non-federal financial aid a student may be
Sometimes also called two-year college, students can take classes
to earn certificates, diplomas or associate's degrees and/or earn
credits toward a degree at a four-year school. If a student intends
to transfer to a four-year school, check with each school to find
out which credits will transfer (be accepted) from the community
college by the four-year school.
Hour - Credit hours are units of value given to
classes, with a specified total of credits required to attain a
degree or other credential. Classes are usually worth two or three
credits each. Credits vary by class and by school. Many schools
base tuition costs on the number of credit hours taken. Some charge
a specific dollar amount per credit hour.
Default - If
you fail to repay the money you borrowed as promised when you
signed a promissory note or Master Promissory Note (MPN), your
loans will go into default. Student loan default has serious
- Default will be reported to credit bureaus which will damage
your credit rating
- You will lose any options to defer future monthly payments
- Your federal and state tax refunds can be seized
- You can be sued by
- Your wages can be garnished
- You will not be eligible for other federal and state student
aid until you make arrangements to repay your loans
Deferment - A period of time
that you can suspend (defer) the monthly payments on your loan. To
do this, you must first contact your lender and be approved for the
deferment. For subsidized loans the federal government will pay the
interest during a period of deferment. However, on unsubsidized
loans the interest will continue to accrue and will be added
(capitalized) to your principal loan amount. The repayment period
for the loan will be extended by the length of the deferment
Delinquent - Loans go into a
delinquent status if you fail to make a payment when it is due.
Determining Your Dependency Status
Dependent student -
In general, if you are an undergraduate student under the age of
24, you are considered a dependent student for financial aid
purposes. See the definition of Independent Student for exceptions
to this rule.
Loan - A low-interest federal loan for both
undergraduate and graduate students. Federal Direct Loans can be
subsidized or unsubsidized. The amount you can borrow each year is
determined by your grade level, dependency status and total amount
borrowed to date. If you have a subsidized Federal Direct Loan, the
federal government will pay the interest while you're in school at
least half-time and during a grace period. If you have an
unsubsidized loan, you are responsible for interest payments while
you are in college and during your grace period. You must fill out
the FAFSA to determine eligibility.
EFA - Estimated
Financial Aid. This is the amount of financial aid for which a
student is likely eligible. The figure is calculated based on all
required financial aid forms.
EFC - See Expected Family Contribution
Non-citizen - You are an eligible non-citizen for
federal financial aid purposes if you are:
- A permanent U.S. resident who has a Permanent Resident Card
- A conditional permanent resident (I-551C); or
- The holder of an Arrival-Departure Record (I-94) from the
Department of Homeland Security showing one of the following
- Asylum granted
- Parolee (paroled for a minimum of one year and your status has
- Conditional entrant (valid only if issued before April 1,
- Cuban-Haitian entrant
Session - A session you must attend, either in person
or online, if you borrow through a Federal Stafford Loan. You will
learn your rights and responsibilities as a borrower, how to manage
your loans while you are in college as well as after you graduate
and begin repayment. Your loan proceeds will not be disbursed until
you complete this counseling session. You will be advised by your
financial aid office how to fulfill this requirement.
Equity - In
real estate, equity is the difference between the fair market value
of a property and the amount of any mortgage debt or liens against
the property that are still outstanding. In business, equity is the
excess of a firm's assets over its liabilities. The term is also
used to refer to the ownership interest of stockholders in a
company and to the value of the investments raised by the stock
Estimate of Your Total
School Charges, Books & Supplies and Living Expenses for Going
to College - The total estimated amount of school
charges, books & supplies and living expenses that are allowed
as part of the Cost of Attendance (COA) calculation. Your actual
expenses may be different.
Session - A session you must attend, either in person
or online, when you graduate from college if you borrowed through a
Federal Stafford. You will be reminded of your rights and
responsibilities as a borrower and will receive information on how
to manage repayment of your loans after college. You will be
advised by your financial aid office how to fulfill this
Expected Family Contribution
(EFC) - An EFC is the amount a student and his or her
family may reasonably be expected to contribute toward the
student's postsecondary education costs for purposes of determining
financial aid eligibility. No matter what college you attend, your
EFC is the same. Colleges often offer students an unsubsidized loan
and parents a Parent Loan for Undergraduate Students (PLUS) loan to
replace the EFC.
FAA - Financial Aid
Administrator. An FAA is a college or university employee involved
in the administration of financial aid. Also known as financial aid
advisors, officers or counselors.
FAFSA - See Free Application for Federal
FAFSA ID - See FSA ID
FAT - Financial Aid
Transcript. This transcript logs all financial aid a student has
Federal Direct Loan (was Federal
Stafford Loan) - These student financial aid loans are
obtained through banks, lending institutions or colleges. To
qualify, students must be enrolled in a college degree program at
least part-time. The loans may be subsidized (need-based, typically
for low-income students), or unsubsidized (not need-based so any
student can apply). Students apply by filling out the FAFSA.
Formerly called the Guaranteed Student Loan.
Federal Parent Loan for Undergraduate Student (PLUS)
Loan - See PLUS Loan
Federal Pell Grant - See Pell Grant
Federal Stafford Loan - See Federal Direct
Educational Opportunity Grant (FSEOG) - A federal
grant for undergraduate students with exceptional financial need
who have not completed their first baccalaureate degree. If you
receive a Pell Grant, you will be given priority to receive a
FSEOG. Awards must be given to Pell Grant recipients. Eligibility
is determined by the college from the information on your FAFSA and
how much funding is available.
FDL Program - Prior
to July 2010, there were two programs that offer federal loans to
students and parents. Federal Direct Loan Program (FDL Program) and
Federal Family Education Loan (FFEL) Program. Due to federal
legislation, only the FDL continues to offer federal Stafford Loans
to undergraduate students, PLUS loans to parents of undergraduate
students and Graduate PLUS loans to graduate students. Under the
FDL Program loans are borrowed directly from the federal
government. When you borrow a federal loan under the FDL Program
you will repay the federal government through the U.S. Department
of Education's loan servicer.
Federal School Code (also, Title
IV Institution Code) - Each college, campus or program
has a six-character institution code. You must include the code
related to each of your college applications when filling out a
FAFSA. These codes are available by contacting the school or
checking an online listing.
FFEL Program -
Discontinued. Prior to July 2010, there were two programs that
offer federal loans to students and parents. Federal Direct Loan
Program (FDL Program) and Federal Family Education Loan (FFEL)
Program. Due to federal legislation, only the FDL continues to
offer federal Stafford Loans to undergraduate students, PLUS loans
to parents of undergraduate students and Graduate PLUS loans to
aid - Money awarded to you from a college based on
financial need, or other criteria. Types of financial aid are
scholarships, grants, work-study programs and student and parent
loans. You are offered financial aid based on the information you
submit on the FAFSA, your COA and EFC, applications submitted and
your enrollment status.
Award Letter - Notification from the financial aid
office of a college regarding the amount and types of financial aid
you have been offered to allow you to attend a particular college
for an academic year. The financial aid award letter you receive
from your college may not include scholarships you have been
awarded from an outside organization. Your financial aid award
(sometimes called a financial aid package) is based on the
information you submitted on the FAFSA, your EFC and COA and your
Office - The best source for financial aid information
at the college you plan to attend. The financial aid office at your
college is available to answer your financial aid questions and can
make adjustments to your financial aid award if you have unusual
Financial need -
The difference between your cost of attendance (COA) at a college
and your expected family contribution (EFC). In other words: COA -
EFC = Financial Need.
(interest rate) - An interest rate that will remain at
a predetermined rate for the entire term of the loan.
Forbearance - If you are
unable to make monthly payments on a student loan after you
graduate, you may be granted a forbearance. During the forbearance
period, you may not have to make any principal or interest payments
on your loan; however, the interest will continue to accrue and
will be added (capitalized) to your loan balance. To request a
forbearance, you must contact your lender in writing.
Free Application for Federal
Student Aid (FAFSA) - This is the application you must
complete to be considered for federal student aid including student
loans, state funding and most institutional awards. Most colleges
require students to complete the FAFSA. The financial aid office at
your college will use the information in the FAFSA to determine the
types of financial aid for which you are eligible.
FSA ID (FAFSA
ID) - The username and password that is used by
students, parents and loan borrowers to access their federal
student aid information. The FSA ID replaces the formerly used PIN
FSEOG - See Federal Supplemental Educational
Full-Time Enrollment (or
Attendance) - In general, full-time enrollment means
taking a minimum of 12 semester or quarter hours per academic term
at a traditional college or 24 clock hours per week at colleges
that use clock hours to measure progress.
wages - When wages are garnished, money to make
payments on defaulted loans is automatically taken from your
paycheck every time you are paid.
Gift aid -
Grants and scholarships are types of financial aid that are
considered gift aid because they do not have to be paid back.
period - When you graduate or if you drop below
half-time enrollment at your college, you have a period of time
called the grace period, before you must begin making monthly
payments on federal loans money you borrowed. If you borrowed
through a Federal Direct loan, the grace period is 6 months.
professional student - A graduate or professional
student is someone working on a degree beyond a Bachelor's degree,
for example, a Master's, Law or Doctorate degree.
Grant -- A type
of financial aid that is considered gift aid because it does not
have to be repaid. Grants are also considered need-based because
they are awarded to students who do not have the financial means to
attend college. Your eligibility for a grant is determined by your
EFC (calculated from the information provided on your FAFSA) and
the amount of funding available at your college.
GSL -- Guaranteed Student Loan. See the Federal
Direct Loan (was Federal Stafford Loan).
Half-time Enrollment (or
Attendance) - In general, this means attending at
least six, but less than 12, semester or quarter hours per academic
term at a traditional school and 12 clock hours per week for
institutions that use clock hours to measure progress.
- You are considered an independent student for financial aid
purposes if you will be 24 years old by December 31 of the
financial aid award year for which you wish to receive funding or
you are not yet 24 but meet at least one of the following
- A graduate or professional student
- A veteran
- Have legal dependents
- You are an orphan or ward of the court
- Have unusual circumstances that can be documented to a
financial aid counselor
Interest or interest
payments - When you borrow a loan you are charged an
amount for use of that money. The percentage of interest you are
charged and when interest begins to accrue on your federal loan is
determined by the type of loan you use.
College - Typically a two-year college, junior
colleges offer certificates, associates degrees and other programs.
Unlike community colleges, junior colleges usually have on-campus
student housing and resident-related facilities and activities.
Loan - Borrowed
money. This type of financial aid is considered self-help because
loans must be repaid under the terms and conditions of the
promissory note you sign when you request the loan.
Master Promissory Note
(MPN) - The promissory note you sign when you borrow
money through a Federal Stafford. The MPN is a legal document by
which you promise to pay back loans as dictated by its terms and
conditions. A MPN simplifies the borrowing process because you may
be able to receive additional loans without signing a new
promissory note each academic year.
Merit-Based Aid -
Financial Aid for which you may be eligible based on a particular
skill, achievement, talent or characteristic. Merit aid is usually
given in the form of scholarships. The most common scholarships are
based upon academic or athletic achievement. You must apply for
most scholarships by completing an application and often writing an
essay about yourself.
Merit Scholarship Program - Students who do well on
the PSAT/NMSQT may qualify for scholarships under this program. A
few students receive full scholarships.
Aid - This type of financial aid is based upon
financial need. You will be offered need-based financial aid if you
cannot afford to go to college using only your own or your family's
financial resources. Financial need is determined by subtracting
your expected family contribution (EFC) from your cost of
attendance (COA) at a college. The most common forms of need-based
financial aid are grants, work-study, subsidized Federal Stafford
Non-need-based aid -
You are offered non-need based financial aid when: (1) your EFC is
equal to or greater than your COA; or (2) when you have been
offered as much need-based financial aid as the college can offer
(based on your EFC and its funding levels), but there is still a
gap between your COA and the amount of need-based financial aid you
have been offered. Non-need based aid is almost always an
unsubsidized Federal Stafford loan and/or a PLUS Loan.
NSLDS - National
Student Loan Data System. This U.S. Department of Education
database allows students to access their Title IV student loan and
- This is the amount of money parents are expected to be able to
contribute to their child's education.
Parent Loan for Undergraduate
Student (PLUS) Loan - A loan available to parents of
dependent undergraduate students. This loan is need-based and it
may be used to replace your expected family contribution. Parents
must be credit-worthy to receive money through this loan.
Grant - A federal grant awarded if you have high
financial need (determined by completing the FAFSA). If you qualify
for the Pell Grant the federal government ensures you will receive
it when you attend an institution of higher education.
Personal Expenses -
Estimate of costs for clothing, hair cuts, entertainment and other
miscellaneous expenses. What you actually spend on these types of
items may be higher or lower depending on your own lifestyle.
PIN (or FAFSA PIN) -
See FSA ID
PLUS Loan - See Parent Loan for Undergraduate
principal balance - The amount of money you borrow
under a loan is called the principal. When you begin making
payments on this loan, you will repay the principal balance of the
loan plus interest.
Promissory Note -
The legal document a borrower signs before receiving money from a
loan. The promissory note is called the Master Promissory Note
(MPN) if you are borrowing money through a Federal Stafford loan or
if your parent is borrowing through a PLUS loan. The promissory
note is a legal document in which you promise to pay back the money
received through loan according to its terms and conditions.
PSAT/NMSQT - The
Preliminary SAT/National Merit Scholarship Qualifying Test.
Students hoping to receive a National Merit Scholarship must take
and pass this test.
Refinance - Replacing an
older loan with a new loan offering better terms or when a business
or person revises their payment schedule for repaying a debt.
Terms - The criteria that you must follow regarding
how your educational loan will be paid back. Terms include the
amount of payments (normally paid on a monthly basis), interest
rate and number of years to repay. There are various repayment
plans available to help manage your loans. Contact your lender if
you are having problems making monthly payments.
Fees - Estimate of the mandatory fees you will pay to
the college such as student government, health and laboratory
Board - Estimate of the room and board (dining)
charges you will pay to the college if you live on campus or an
estimate of these expenses if you live off campus or with your
ROTC - Reserve
Officers Training Corps. In this program, the military pays a
student's tuition or other expenses. The student takes part in
summer training while in college, and commits to military service
Scholarship - A type of
financial aid for which the money received does not have to be paid
back. Scholarships are considered merit-based aid because they are
awarded to students who are eligible based on certain criteria. The
most common scholarships are academic and athletic scholarships.
You must apply for each scholarship separately by completing an
application (supplied by the scholarship donor) and in many cases,
by writing an essay about yourself. Scholarships come from a
variety of sources including federal and state governments, the
college you are attending, churches, professional organizations and
aid - A type of financial aid that may or may not be
need-based. Self-help financial aid includes work-study (you work
for the money received) and loans (money which you borrow and must
Student Aid Report
(SAR) - Your copy of the information you submitted on
the FAFSA. If you complete a paper FAFSA, the SAR will be mailed to
you. If you complete the FAFSA on-line, you will receive an
electronic copy of your SAR.
Subsidized Stafford Loan - See Direct Loan
Terms (or Loan Terms) - see Repayment Terms
Title IV Institution Code - See Federal School
Estimate of costs for local bus or train passes or gas and
maintenance for a car. What you actually spend on transportation
may be different. There are no allowances included for making car
payments or paying car insurance.
Estimate of the charge you will pay to the college for classes.
(Note: depending on where you see tuition listed, it may not
reflect the College Opportunity
Fund stipend deduction for eligible Colorado students. The
stipend pays a portion of total in-state tuition at Colorado public institutions or participating private institutions.
Unsubsidized Direct Loan - See Direct Loan
(interest) Rate - Any interest rate or dividend that
changes on a periodic basis. Variable rates are often used for
convertibles, mortgages, and certain other kinds of loans.
Verification - The process
a college financial aid office will use to verify the information
you submitted on the FAFSA. If your FAFSA is selected for
verification, the financial aid office must verify that all
information is correct before awarding financial aid. Thirty
percent of FAFSAs submitted each year are randomly selected for
this process, but note that some colleges verify every FAFSA from
Work-Study - A part-time
employment program that provides jobs for undergraduate and
graduate students to assist them to meet a portion of their
education expenses. Work-study funding comes from federal and state
governments as well as from the college. The results of your FAFSA
and funding at your college determine your eligibility.