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Financial Aid Terms and Acronyms

Award Letter - This is the letter from the Financial Aid Office at colleges where student has been admitted. It lists all the financial aid awarded to the student. These letters vary among institutions and can include the expected family contribution, cost of attendance and the terms of the aid awarded. These letters can be confusing and families are encouraged to call the financial aid office to ask any questions as it is essential to completely understand all parts of the aid that is offered.


◦ Cost of Attendance (COA) – the full cost (includes tuition, fees, room, board, books, travel, estimated incidental expenses) for one year of college (aka – “sticker price”)

◦ CSS Profile – Another financial aid form required by approximately 400 colleges to determine institutional aid (meaning financial aid provided by the college).

◦ Student Aid Index (SAI) used to be called Expected Family Contribution (EFC) – A number based on the information submitted on your FAFSA (i.e. your income, assets and the number of children in a family attending college). The number is based on the government’s formula and represents the amount a family is expected to pay for one year of college.

Federal Pell Grant - a federal government grant for undergraduate students who have financial need. It will be called out on the award letter.

Federal Methodology – Method used by the federal government to determine a family’s EFC and the amount of federal financial aid a student is awarded.

Federal Perkins Loan - A federal student loan made by the recipient's school for undergraduate and graduate students who demonstrate financial need.

Financial Aid Package - the total financial aid a student receives. It includes an y federal and non-federal aid such as grants, loans, work-study, and scholarships.

Free Application for Federal Student Aid (FAFSA) – the Federal Government’s financial aid form required by virtually every college (and graduate school). Families must fill out the FAFSA every year the student is in school to determine a family’s EFC and their eligibility for Pell Grants or Subsidized loans.

Federal Student Aid Identification (FSAID) - needed by student and one parent to submit the FAFSA.

Gift Aid - Financial aid that does not need to be paid back such as scholarships and grants.

Grant - A type of financial aid award based on need or merit that does not have to be repaid.

◦ Institutional Methodology – Method used by a college to determine how the school’s financial aid funds will be awarded.

◦ IRS Data Retrieval Tool (DRT) – Connected to the FAFSA, allows you to automatically download information from your tax returns.

Loan - Borrowed money to pay for college that must be repaid with interest. These can be private loans made by a bank, credit union, state agency or school, or a federal loan made by the federal government. (see "Subsidized Loans" and "Unsubsidized Loans" below for additional information.)  

Merit Aid - Financial aid awarded by a college based on a student's academic, leadership, artistic skill, or other criteria determined to be important to the college.

◦ Need – The difference between the Cost of Attendance (COA) and Expected Family Contribution (EFC).

Need-based Financial Aid - Financial aid awarded based on a student's financial circumstances. Need-based aid can be awarded in the form of grants, loans or work-study.

Net Price - The actual cost that a student and family will pay for college in a given year. Net price is the difference between the institution's total cost of attendance minus any need-based or merit-based aid awarded to the student.

◦ Net Price Calculator – Each college is required to have an NPC on their website, although some may be more worthwhile and accurate than others. Families provide extensive information about finances and student’s academic history to get an estimate of the aid that might be forthcoming and the net amount a family will need to pay.

Room and Board - the cost of housing and food while attending college.

Subsidized Loans - Subsidized Loans are loans for undergraduate students with financial need, as determined by your cost of attendance minus expected family contribution and other financial aid (such as grants or scholarships). Subsidized Loans do not accrue interest while you are in school at least half-time or during deferment periods.

◦ Student Aid Report (SAR) - The report sent to the student after the FAFSA is filed (usually SAR arrives within 5 days). It includes the Expected Family Contribution (EFC).

◦ Stafford Loans, Parent PLUS Loans – these are LOANS and will need to be paid back.

◦ Tuition Discount – Any financial aid or scholarship that reduces the total cost of attendance.

Unsubsidized Loans - Unsubsidized Loans are loans for both undergraduate and graduate students that are not based on financial need. Eligibility is determined by your cost of attendance minus other financial aid (such as grants or scholarships). Interest is charged during in-school, deferment, and grace periods. Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it’s paid in full.

Work-Study - A federal student aid program that provides an opportunity for a student to work part-time and attend college. Work-study jobs are usually on-campus jobs and are designed to help students fund their educational expenses. 

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