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A one-year
period between July 1 and June 30. |
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Award
Letter |
A notice
from a financial aid office to a financial aid applicant that
specifies the financial aid programs and dollar amount of
a each financial aid award. |
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You must
be one of the following to receive federal student aid:
- U.S. citizen
- U.S. national (includes natives of American
Samoa or Swain's Island)
- U.S. permanent resident who has an I-151,
I-551, or I-551C (Alien Registration Receipt Card)
If you're not in one of these categories,
you must have an Arrival-Departure Record (I-94) from the
U.S. Immigration and Naturalization Service (INS) showing
one of the following designations in order to be eligible:
- "Refugee"
- "Asylum Granted"
- "Indefinite Parole" and/or "Humanitarian
Parole"
- "Cuban-Haitian Entrant, Status Pending"
- "Conditional Entrant" (valid only if
issued before April 1, 1980)
If you have only a Notice of Approval to
Apply for Permanent Residence (I-171 or I-464), you aren't
eligible for federal student aid.
If you're in the United States on an F1
or F2 student visa only, or on a J1 or J2 exchange visitor
visa only, you can't get federal student aid. Also, persons
with G series visas (pertaining to international organizations)
are not eligible for federal student aid.
NOTE: Citizens and eligible non citizens
may also receive loans from the FFEL and Direct Loan programs
at participating foreign schools (see: http://www.staffordloan.com/ ).
Citizens of the Federated States of Micronesia,
the Republic of the Marshall Islands, and the Republic of
Palau are eligible only for Federal Pell Grants, Federal
Supplemental Educational Opportunity Grants (FSEOGs), or
Federal Work-Study. These applicants should check with their
financial aid administrators for more information. |
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Cost
Less Aid Amount |
The difference
between the total cost of education and the financial aid
package offered to you by the school, including scholarships,
grants, work-study and Stafford Loans. This amount is what
you are expected to pay out of pocket or through supplemental
loan programs (see PLUS and Alternative Loans) |
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Cost
of Attendance (COA) |
The total
amount it will cost a student to go to school-usually expressed
as a yearly figure. It is determined using rules established
by the U.S. Congress. The COA includes tuition and fees; on-campus
room and board (or a housing and food allowance for off-campus
students); and allowances for books, supplies, transportation,
loan fees, and, if applicable, dependent care, costs related
to a disability, and miscellaneous expenses, including an
allowance for the rental or purchase of a personal computer.
Also included are reasonable costs for eligible study-abroad
programs. An allowance (determined by the school) is included
for reasonable costs connected with a student's employment
as part of a cooperative education program. For students attending
less than half time,* the COA includes only tuition and fees
and an allowance for books, supplies, transportation, and
dependent-care expenses. Talk to the financial aid administrator
at the school you're planning to attend if you have any unusual
expenses that might affect your cost of attendance. |
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The percentage
of a loan applicant's (monthly) income that is used to meet
debt obligations. Many alternative loan programs use this
calculation to determine an applicant's eligibility for a
loan program. |
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Default
|
Failure
to repay a loan according to the terms agreed to when you
signed a promissory note. Default also may result from failure
to submit requests for deferment or cancellation on time.
The consequences of default are severe. |
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Deferment
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A temporary
period during which a borrower is not required to make payments.
Deferments are more common in Federal loan programs rather
than alternative loans.
For Subsidized Stafford Loan borrowers (and Perkins Loan borrowers),
many deferments are subsidized, meaning the interest that
accrues on the loan during the deferment is paid by the federal
government.
Some deferments are unsubsidized, meaning the interest that
accrues must be paid by the borrower.
(Resources on the web from the department) |
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Department
of Education |
The federal
agency that establishes financial aid programs and processes
financial aid applications. |
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Direct
Costs |
Costs
that the college or university directly bills to the student.
Tuition and fees are direct costs. |
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An educational
session that first time Stafford borrowers must fulfill before
the loan's proceeds can be disbursed. The Exit Counseling
sessions provides these first time borrowers basic information
about student loans and the terms and conditions of the Stafford
Loan program. |
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Eligible
Program |
A course
of study that leads to a degree or certificate and meets the
U.S. Department of Education's requirements for an eligible
program. To get federal financial aid, you must be enrolled
in an eligible program, with two exceptions:
- If a school has told you that you must
take certain coursework to qualify for admission into
one of its eligible programs, you can get a Direct Loan
or a FFEL Program Loan (or your parents can get a PLUS
Loan) for up to 12 consecutive months while you're completing
that coursework. You must be enrolled at least half time,
and you must meet the usual student aid eligibility requirements.
- If you're enrolled at least half time
in a program to obtain a professional credential or certification
required by a state for employment as an elementary or
secondary school teacher, you can get a Federal Perkins
Loan, Federal Work-Study, a Direct or FFEL Stafford loan,
(or your parents can get a PLUS Loan) while you're enrolled
in that program.
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Exit
Counseling |
An educational
session that Stafford loan borrowers must fulfill around the
time of graduate or separation from a college. The Exit Counseling
session provides the borrower detailed information about the
loans he/she borrower, the company that will collect the payment
and the repayment alternatives that are available. |
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Expected
Family Contribution (EFC) |
The amount
that a student and family can be expected to contribute towards
educational expenses over a year's time. The EFC is calculated
when the student submits a financial aid application. |
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Extended
Repayment |
A new
option to recent federal loan borrowers. This option allows
borrowers with high balances (greater than $25,000 in federal
loans) to extend the repayment term from its standard 10 year
term to 25 or 30 years.
While extending the repayment term reduces the loan's monthly
payment, it also increases the total amount of interest paid
on the loan. |
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The program
name for loans that are both guaranteed and funded by the
federal government. If your school is a "Direct Lending School",
your Stafford Loan is administered by the Federal Direct Student
Loan Program (FDSLP). Funds for "direct loans" are provided
by the US government directly to students and their parents
through their schools. Applications can be obtained from your
school. Banks and guarantee agencies are not involved in the
process. |
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Federal
Family Education Loan Program (FFELP) |
The collective
name for the Federal Stafford and PLUS loan programs. FFELP
loans are funded by private lenders. |
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Federal
Methodology Expected Family Contribution (FM EFC) |
The specific
EFC calculated by the federal government based on information
submitted on the FAFSA. The FM EFC calculation is set each
year by the U.S. Department of Education and determines eligibility
for federal aid programs. |
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Federal
Pell Grant |
A need
based financial aid program funded by the federal government.
Students with an EFC less than $x are eligible for the Pell
Grant. The amount of the award is based on the student's enrollment
level (full time, three-quarter time, etc.) and the cost of
Federal Supplemental Education Opportunity Grant (SEOG) --
a need based financial aid program funded by the federal government.
Colleges receive an annual allocation of SEOG and, within
certain guidelines, develop an awarding policy for this fund.
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Federal
PLUS Loan |
A federally
guaranteed loan program that allows parents to borrow funds
to help pay educational expenses. The program does require
the borrower to pass a simple credit check. The loan's interest
rate is variable, but new loans have a maximum interest rate
of 9%. |
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Federal
Stafford Loan |
A federally
guaranteed loan program that allows students to borrow funds
from lenders. Stafford loans allow the student to defer payments
while he/she is in school. The interest rate for new Stafford
Loans is variable but will not exceed 8.25%. |
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Federal
Work Study (FWS) |
Federally
funded program that allows colleges and universities to create
campus based employment programs for financial aid recipients.
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Financial
Aid Package |
The total
amount of financial aid (federal and nonfederal) a student
receives. |
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Financial
Need |
The difference
between a student's Cost of Attendance and Expected Family
Contribution. It is the amount of financial aid the student
"needs" to afford attendance at a particular college. |
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Free
Application for Federal Student Aid (FAFSA) |
The official
application form for all federal financial aid programs. |
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A certificate students
receive if they've passed a specific, approved high school
equivalency test. Students who don't have a high school diploma
but who have a GED may still qualify for federal student aid.
A school that admits students without a high school diploma
must make a GED program in the vicinity of the school available
to these students and must inform them about the program.
Students who pass an approved ability-to-benefit (ATB) test
may also be qualified. An applicant without a high school
diploma or its recognized equivalent can be eligible for funds
if he or she 1) passes an independently administered test,
ATB, approved by the Department of Education and used for
determining the student's ability to benefit from post secondary
education or 2) enrolls in a school that participates in a
process that has been both prescribed by the state in which
the school is located and approved by the Department. |
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Graduated
Repayment |
This option
is available for federal loans, and even some alternative
loan providers offer graduated repayment.
Under graduated repayment, payments are low (usually just
enough to cover the loan's accruing interest) when the borrower
first enters repayment. Periodically, the payments increase
to pay off the loan in the standard 10 year repayment term.
The idea of graduated repayment is to have low payments while
a borrower is first entering the working world. Then, as income
increases, the student loan payments also increase. |
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Grants
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A type
of financial aid award that does not have to be repaid. Grants
are often made based on an applicant's financial need or EFC.
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Guarantee
Agency (Guarantor) |
One of
approximately forty companies throughout the country that
financially guarantee that loans made by lenders under the
FFELP will be repaid. Guarantee agencies typically retain
a percentage of each student loan to maintain a fund to cover
unpaid loans. A list of existing guarantee agencies is available
at the following link (DOE Link) |
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Guarantee
Fee |
A type
of fee a borrower pays to a lender. Guarantee fees are collected
as a financial reserve to protect the loan program in cases
of student default. Federal Stafford, PLUS and Federal Direct
Student loans guarantee fee is a maximum of 1% of the loan's
principal balance. |
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At schools
measuring progress by credit hours and semesters, trimesters,
or quarters, half-time enrollment is at least six semester
hours or quarter hours per term. At schools measuring progress
by credit hours but not using semesters, trimesters, or quarters,
half-time enrollment is at least 12 semester hours or 18 quarter
hours per year. At schools measuring progress by clock hours,
half-time enrollment is at least 12 hours per week. Note that
schools may choose to set higher minimums than these. |
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This repayment
alternative is available to some federal loan borrowers (check
with your lender or servicer to learn if your loans qualify
for this alternative). Income sensitive repayments bases the
monthly payment on the borrower's income in relation to total
federal loan indebtedness.
Under this option, monthly payments can drop to as low as
the amount of interest that accrues on the loan's principal
balance. Borrowers must apply for this option annually and
must provide documentation of income - usually in the form
of a federal tax return. |
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Indirect
Costs |
Costs
associated with a student's enrollment that are not billed
by or incurred through the College. Transportation and miscellaneous
costs are indirect costs. |
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Institutional
Methodology Expected Family Contribution (IM EFC) |
A variation
of the FM EFC calculated by a college or university. This
EFC calculation can incorporate different items than the FM
EFC calculation and is used by colleges to allocate institutionally
sponsored aid programs. |
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Interest
Rate |
Stafford
Loan interest is variable, adjusted annually and set by the
Department of Education. It is currently 4.86% for the 7/1/02-6/30/03
loan period.
You must be attending school at least half time to be eligible
to receive Direct or FFEL Program loans. Half-time enrollment
is not a requirement to receive aid from the Federal Pell
Grant, Federal Supplemental Educational Opportunity Grant
(FSEOG), Federal Work-Study, and Federal Perkins Loan programs.
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Financial
aid awards that the student (or other party like a parent,
for example) borrows from a lender, the school or other third
party. Loans must be repaid by the borrower according to the
terms of a promissory note, usually with interest. |
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Loan
Servicer |
Once a
loan has been approved and disbursed, by the lender or the
guarantee agency, it is usually transferred to a servicing
company. This is a company that is responsible for managing
your account while you are in school and during repayment.
You will repay the servicing company until the loan is paid
in full. Any questions or repayment issue should be addressed
to the servicing company. However, if you are having problems
with the servicer, you should contact your lender for additional
assistance. |
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A fee
the borrower pays to the lender for originating a student
loan. Origination fees are most often associated with Federal
Stafford, PLUS and Federal Direct Student loans. The maximum
origination fee for these federal loans is 3% of the loan's
principal balance. |
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The binding
legal document you sign when you get a student loan. It lists
the conditions under which you're borrowing and the terms
under which you agree to pay back the loan. It will include
information about your interest rate and about deferment and
cancellation provisions. It's very important to read and save
this document because you'll need to refer to it later when
you begin repaying your loan. |
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One who
is enrolled in an institution to obtain a degree or certificate.
Generally, to receive aid from the programs discussed in this
booklet, you must be a regular student. (For some programs,
there are exceptions to this requirement. See the definition
of eligible program.) |
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To be
eligible to receive federal student aid, you must maintain
satisfactory academic progress toward a degree or certificate.
You must meet your school's written standard of satisfactory
progress. Check with your school to find out its standard.
If you're enrolled in a program that's longer than two
years, the following definition of satisfactory progress
also applies to you: You must have a C average by the end
of your second academic year of study or have an academic
standing consistent with your school's graduation requirements.
You must continue to maintain satisfactory academic progress
for the rest of your course of study.
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Scholarships
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A financial
aid award that does not have to be repaid. Scholarships are
generally made based on an applicant meeting certain eligibility
criteria. |
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Selective
Service Registration |
If required
by law, you must register, or arrange to register, with the
Selective Service to receive federal student aid. The requirement
to register applies to males who were born on or after January
1, 1960, are at least 18 years old, and are not currently
on active duty in the U.S. Armed Forces. (Citizens of the
Federated States of Micronesia, the Marshall Islands, or Palau
are exempt from registering. |
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Standard
Repayment |
A repayment
alternative in which a borrower pays a set amount monthly
over the entire repayment term. Also called "Simple Repayment".
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Subsidized
Stafford Loan |
This is
a need-based student loan. Interest that accrues on Subsidized
Stafford loans while the student is in school (at least half
time) is paid by the federal government on the student's behalf.
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The Unsubsidized
Stafford Loan is a non-need based loan program, so students
with no financial need can even qualify for this aid program.
Interest that accrues on Unsubsidized loans must be paid by
the borrower, even while he/she is in school. The borrower
may make periodic payments (monthly or quarterly, depending
on the lender's policy) or allow the interest to accrue throughout
enrollment and have the interest "capitalized" (added to the
loan's principle balance). While capitalization eliminates
having to make payments while in school but increases the
total cost of a loan. |
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See Federal
Work Study |
