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401(k), 403(b): The names of two of the more popular tax-deferred retirement plans in which employees elect to defer part of their earnings until a later date.
529 Plan: A qualified tuition program (QTP) set up to allow you to either prepay, or contribute to an account established for paying a student's qualified education expenses at an eligible educational institution. For further detail, see IRS Publication 970 re Tax Benefits for Education at www.irs.gov.
% Need Met: The percentage of demonstrated need offered by a college in the financial aid package, including both gift aid and self-help aid.


Ability-to-Benefit: One of the criteria used to establish student eligibility in order to receive Title IV program assistance is that a student must have earned a high school diploma or its equivalent. Students who are not high school graduates (or who have not earned a General Educational Development [GED] Certificate*) can demonstrate that they have the "ability to benefit" from the education or training being offered by passing an approved ability-to-benefit (ATB) test.
Academic Year: A period of time schools use to measure a quantity of study. For example, a school's academic year may consist of a fall and spring semester during which a full-time undergraduate student must complete 24 semester hours. Academic years vary from school to school and even from educational program to educational program at the same school. 
Access Group: An educational and financing organization that distributes and processes the Needs Access financial aid application.
Accreditation: The school must have accreditation from an accrediting body recognized by the U.S. Department of Education to be eligible to participate in the administration of federal student aid programs. Accreditation means that the school meets certain minimum academic standards, as defined by the accrediting body.
Admissions Yield: The percentage of accepted students who chose to enroll at a given school.
Admit Deny: Process of ranking students who have already been accepted to the college. For example, a college wants 500 freshmen; it sends 1500 acceptance letters, using aid to entice the 500 most desirable students. The middle and bottom thirds are generally offered less and typically don't receive enough funding to make their attendance possible.
AGI: Adjusted gross income. In 2008, the AGI will be listed on line 37 of the IRS 1040; line 21 of the IRS 1040A and line 4 of the IRS 1040EZ.
Agreement to Serve: An agreement under which a student receiving a TEACH Grant commits to the specific obligation to teach for four complete years in a designated high need field at a low-income elementary or secondary school within eight years of completing or ceasing enrollment in a TEACH Grant-eligible program.
American College Testing Program (ACT): The administrator of a group of standardized tests in English, mathematics, reading, and science reasoning.
Application Score: A scoring system used (in differing formats) by every college.  It's how they rank their applicants.  Some colleges use a number system or letter system to sort.  Most colleges will have an applicant's package read by 2 admissions officers.  If your student's score is above the cutoff mark: Admit. Below: Reject. Between the two marks, a committee decides your student's fate.
Award Letter: An award letter from a school states the type and amount of financial aid the school is willing to provide if you accept admission and register to take classes at that school.

Award Year: The time beginning on July 1 of one year and extending to June 30 of the next year. Funding for federal grants and campus-based programs is provided on the basis of the award year--for example, a student is paid out of funds designated for a particular award year, such as the 2010-11 award year. 
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Base Year (also known as the base income year): For analyzing student financial need, the base year is the calendar year proceeding the award year. For instance, 2009is the base year used for the 2010-11 award year. The Free Application for Federal Student Aid (FAFSA) uses family income from the base year because it is more accurate and easier to verify than projected-year income.
Business/Farm Supplement: A supplemental aid application required by ~100 colleges for aid applicants whose parents own businesses or farms or who are self-employed. The individual school's aid policy will determine if this form must be completed.
Buying Freshmen: The students who are most attractive to a college get the best financial aid package, or more grants and free money and less loans and work-study. Can also take the form of large tuition discounts, or giving more aid than the student's need.
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Campus-Based Programs: Three federal student aid programs that are administered directly by the school's financial aid office (Federal Supplemental Educational Opportunity Grant (FSEOG) Program, Federal Perkins Loan Program, and Federal Work-Study (FWS) Program.).

Capitalized: With certain loans, such as subsidized Direct and FFEL Loans, the U.S. Department of Education pays the interest that accrues on these loans while the student is enrolled at least half-time* and during periods of deferment. However, with subsidized loans in forbearance, unsubsidized loans or PLUS Loans, the student or the student's parents are responsible for paying interest as it accrues on these loans. When the interest is not paid, it is capitalized or added to the principal* balance, which increases the outstanding principal* amount due on this loan. Interest that is capitalized and, therefore, has been added to the original amount of the loan subsequently accrues interest, adding an additional expense to the loan.

Central Processing System (CPS): The processing facility for the Free Application for Federal Student Aid (FAFSA). The CPS  receives student information, calculates a student's official Expected Family Contribution (EFC), performs several eligibility database matches, produces Student Aid Reports (SARs) and SAR Acknowledgements, and produces Institutional Student Information Records (ISIRs). 

Citizen/Eligible Noncitizen: To receive federal student aid, a student must be a U.S. citizen, U.S. national (includes natives of American Samoa or Swain's Island), or U.S. permanent resident who has an I-151, I-551 or I-551C (Alien Registration Receipt Card). If a student is not in one of these categories, he or she must have an Arrival-Departure Record (I-94) from the U.S. Department of Homeland Security DHS) indicating "Refugee," "Asylum Granted," "Cuban-Haitian Entrant (Status Pending),"  "Conditional Entrant" (valid only if issued before April 1, 1980), or "Paroled" (must be paroled for at least one year). A student also may qualify as an eligible noncitizen if he or she holds a T-visa (for victims of human trafficking), or if his or her parent holds a T-1 visa. Please inform the student that the school he or she plans to attend will ask to see the visa and/or certification letter from the U.S. Department of Health and Human Services.  If a student has only a "Notice of Approval to Apply for Permanent Residence" (I-171 or I-464), he or she is not eligible for federal student aid. If a student is in the U.S. on an F-1 or F-2 student visa, or on a J-1 or J-2 exchange-visitor visa only, he or she can't get federal student aid. Also, persons with G series visas (pertaining to international organizations) are not eligible for federal student aid. Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau are eligible only for certain federal student aid programs. These applicants should check with their schools' financial aid administrators for more information.  For more information about eligible noncitizen status, contact a college financial aid administrator or refer to the Student Eligibility volume of the Federal Student Aid Handbook at www.ifap.ed.gov.

NOTE: A student must be a U.S. citizen to receive an Academic Competitiveness Grant or a National Science and Mathematics Access to Retain Talent Grant.
College Board: A nonprofit association that writes and processes the CSS Financial Aid PROFILE® form.

Consolidation Loan: A loan that combines multiple federal student loans into a single loan with one monthly payment. Consolidation loans are available through the Federal Family Education Loan (FFEL) Program and the Direct Loan Program. Both allow the borrower to combine different types and amounts of federal student loans to simplify repayment. A consolidation loan pays off the existing loans; the borrower then repays the consolidation loan.

Cooperative Education: A college program offered at many schools that combines periods of academic study with periods of paid employment related to the student's field of study. In most cases, participation will extend the time required to obtain a bachelor's degree to five years.

Cost of Attendance (COA): The total amount it will cost you to go to a post-secondary institution--usually expressed as a yearly figure. The COA is determined by the school using rules established by Federal law. The COA includes:
  • tuition;
  • fees;
  • on campus room and board (or a housing and food allowance for off-campus students);
  • allowances for books and supplies;
  • allowance for the rental or purchase of a personal computer;
  • transportation;
  • miscellaneous and personal expenses;
  • loan fees for Federal student loans (if applicable);
  •  dependent care costs (if applicable);
  • costs related to a disability (if applicable);
  • reasonable costs for eligible study-abroad programs (if applicable);
  • costs associated with a student's employment as part of a cooperative education program (if applicable).
For students attending less than half-time, the COA includes tuition and fees and an allowance for books, supplies, transportation and dependent care expenses; and can also include room and board for up to three semesters or the equivalent at the institution. But no more than two of those semesters, or the equivalent, may be consecutive. 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. The COA is compared to a student's Expected Family Contribution (EFC) to determine the student's need for aid (COA EFC = student's financial need).

Coverdell Education Savings Account (ESA): A savings account this is set up to pay the qualified education expenses of a designated beneficiary.  Contributions are not tax-deductible, but grow tax-free until distributed.  See IRS Publication 970 (Tax Benefits for Education) for further detail at www.irs.gov.
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Default: Failure to repay a loan according to the terms agreed to when you signed a promissory note. For the FFEL and Direct Loan programs, default is more specific--it occurs if you fail to make a payment for 270 days if you repay monthly (or 330 days if your payments are due less frequently). The consequences of default are severe. Your school, the lender or agency that holds your loan, the state and the federal government may all take action to recover the money, including notifying national credit bureaus of your default. This may affect your credit rating for as long as seven years. For example, you might find it difficult to borrow money from a bank to buy a car or a house. In addition, the Internal Revenue Service can withhold your U.S. individual income tax refund and apply it to the amount you owe, or the agency holding your loan might ask your employer to deduct payments from your paycheck. Also, you may be liable for loan collection expenses. If you return to school, you're not entitled to receive additional federal student financial aid. Legal action also might be taken against you. In many cases, default can be avoided by submitting a request for a deferment, forbearance, discharge or cancellation and by providing the required documentation.

Default Rate: A percentage calculated each year for a postsecondary school on the basis of the number of former students who have defaulted on Federal Family Education Loan (FFEL) Program or Direct Loan Program loans received while attending that school.

Demonstrated Need: The amount of aid a student is eligible to receive. This figure is calculated by subtracting the Expected Family Contribution from the Cost of Attendance.
Dependent Student: A classification for aid purposes for a student who is considered to be dependent upon his or her parent(s) for financial support.  Both the parents' and the student's income and assets are evaluated when determining how much a family can contribute towards college costs. 

Direct Loan: William D. Ford Federal Direct Loan (Direct Loan) Program. Loans made through this program are referred to as Direct Loans. Eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Loans include subsidized and unsubsidized Direct Stafford Loans (also known as Direct Subsidized Loans and Direct Unsubsidized Loans), Direct PLUS Loans, and Direct Consolidation Loans. You repay these loans directly to the U.S. Department of Education.
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Early Action (EA): Early admissions programs which do not ask applicants to commit to attending if they are accepted are generally known as Early Action (EA) programs. A student may apply to multiple schools via EA, but not Early Decision (ED). Acceptance notification is early, typically mid-December, the largest benefit is that the student is not locked into the financial aid package and negotiation/appeals are possible. They give students the benefits of early notification without the obligations of Early Decision (ED). Even if accepted, students are free to apply to other schools and to compare financial aid offers. 

Single Choice Early Action (SCEA) programs specifically require students not to make EA applications to other schools, although they are free to apply elsewhere under the regular admissions round.

Early Decision: An early application program where the results are typically binding is called Early Decision (ED). Acceptance notification is early, typically mid-December. 'Binding' means that the student applicant promises from the start that they will attend the school if their application is accepted and agree to the financial aid package. Students can seek release from an early decision obligation on the grounds of financial hardship, if the family cannot afford the offer.

Early decision applicants are expected to submit only one Early Decision application to one school. They can submit applications to other schools under regular application procedures, but agree that they will withdraw all those applications if they are accepted to the early decision school.

Educational Testing Survey: The organization that writes the SAT exam.

Eligible Noncitizen: 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 (Permanent Resident Card). If you're not in one of these categories, you must have an Arrival-Departure Record (I-94) from U.S. Citizenship and Immigration Services (USCIS) showing one of the following designations: 
  • "Refugee" 
  • "Asylum Granted" 
  • "Cuban-Haitian Entrant, Status Pending" 
  • "Conditional Entrant" (valid only if issued before April 1, 1980) 
  • Victims of human trafficking, T-visa holder or if the student's parent is the holder of a T-1 visa. 
  • "Parolee" (You must be paroled into the United States for at least one year and you must be able to provide evidence from the USCIS that you are in the United States for other than a temporary purpose and that you intend to become a U.S. citizen or permanent resident.) 
If you only have a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), you're not eligible for federal student financial aid. If you're in the United States on certain visas, including an F1 or F2 student visa, or a J1 or J2 exchange visitor visa, you're not eligible for federal student financial aid. Also, people with G series visas (pertaining to international organizations) are not eligible for federal student financial aid. For more information about other types of visas that are not acceptable, check with your school's financial aid office. Citizens and eligible noncitizens may receive loans from the FFEL Program at participating foreign schools. Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau are eligible only for certain types of federal student aid. These applicants should check with their schools' financial aid office for more information.

Eligible Program: A course of study that requires a certain minimum number of hours of instruction and period of time that leads to an academic, professional or vocational degree or certificate, or other recognized educational credential. To receive federal student financial aid, you must be enrolled in an eligible program, with two exceptions:
  • If a school has told you that you must take certain course work to qualify for admission into one of its eligible programs, you can get a Stafford Loan for up to 12 consecutive months while you're completing that preparatory course work. You must be enrolled at least half-time*, and you must meet the usual federal student financial 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 Stafford Loan, or your parents can get a PLUS Loan, while you're enrolled in that program. 
Employment Allowance: A deduction against income in the federal and institutional methodologies for two-parent families in which both parents work or a single-parent family in which that parent works.

Enrollment Management: In post-secondary education, enrollment management is the strategic and selective use of offers of financial aid to shape the composition of the incoming class in furtherance of the institution's goals. It is to be distinguished from the allocation of financial aid based on student needs or academic merit.

Expected Family Contribution (EFC): The amount of money a student and his/her family are expected to contribute for the year toward the student's cost of attendance (COA) according to a formula created by Congress. It appears on the Student Aid Report (SAR), SAR Acknowledgement, and Institutional Student Information Record (ISIR). This figure is compared to the Cost of Attendance (COA) to determine a student's financial aid eligibility. The contribution remains constant no matter where the student plans to attend college.
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FAFSA: See Free Application for Federal Student Aid.

Family Contribution: Another name used to refer to the Expected Family Contribution (EFC).

FAO: See Financial Aid Officer.

Federal Family Education Loan (FFEL) Program--The Federal Stafford Loan (subsidized and unsubsidized), Federal PLUS Loan (for parents or graduate or professional students), and Federal Consolidation loan programs. Funds for these programs are provided by private lenders; the loans are guaranteed by the federal government. You repay these loans to the bank or private lender that made you the loan.

Federal Methodology: The generally accepted method used to calculate the family's expected contribution to college costs for federal aid purposes. Depending on the individual college's policy, the federal methodology may also be used to determine eligibility for money under the school's control.

Federal Student Aid Programs: Programs administered by the U.S. Department of Education:
  • Federal Pell Grants
  • Academic Competitiveness Grants (ACG)
  • National Science and Mathematics Access to Retain Talent Grants (National SMART Grants)
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Federal Work-Study (FWS)
  • Federal Perkins Loans
  • Federal Direct Stafford Loans (both subsidized and unsubsidized)
  • Federal Direct PLUS Loans (for parents or graduate /professional students)
  • Federal Direct Consolidation Loans
  • Federal Stafford Loans (both subsidized and unsubsidized)
  • Federal PLUS Loans (for parents or graduate/professional students)
  • Federal Consolidation Loans
  • Leveraging Educational Assistance Partnership (LEAP) Program grants
  • Robert C. Byrd Honors Scholarship Program (Byrd Program) scholarships
Federal Work-Study (FWS): A federally funded aid program that provides jobs for students. Eligibility is based on need. It is money that does not have to be repaid and the college will provide the student with the job.  Work/study jobs pay minimum wage. The work commitment is fulfilled once the student has earned the amount of the work/study awarded.

Financial Aid: A general term used to refer to a variety of programs funded by the federal and state governments as well as the individual schools to assist students with their educational costs. While the names may vary, financial aid comes in three basic forms: (1) gift aid (grants and scholarships) that does not have to be paid back (2) student loans, and (3) work-study jobs.

Financial Aid Leveraging: The practice of cutting the sticker price to specifically targeted groups of applicants.  The goal is to maximize the financial aid dollar and admit larger numbers of students with the same dollars.  Or, the school may artificially depress the amount of aid given in a given year, to see if that level of aid can become the new "baseline".

Financial Aid Officer (FAO): An individual who works at a college or career school and is responsible for preparing and communicating information, including eligibility, on student loans, grants or scholarships and employment programs. The FAO and staff help students apply for and receive student aid. The FAO is also capable of analyzing student needs and making professional judgment changes when necessary.

Financial Aid Package: The total amount of financial aid (federal and nonfederal) a student is offered by the school. The financial aid officer at a postsecondary institution combines various forms of aid into a "package" to help meet a student's education costs. Using available resources to give each student the best possible package of aid is one of the aid officer's major responsibilities. Because funds are often limited, an aid package might fall short of the amount a student needs to cover the full cost of attendance. Also, the amount of federal student aid in a package is affected by other sources of aid received (scholarships, state aid, etc.).

Financial Aid PROFILE® (FAP) Form: See PROFILE® form.

Financial Need: The difference between a student's cost of attendance (COA) at a school and the Expected Family Contribution (EFC). (COA EFC = student's financial need.). Sometimes referred to as Demonstrated Need.

Flag: A student's record that has been marked for special consideration.  For example, children of alumni may get a flag, students with special talents, or under-represented minorities. These applications usually are separated from the common pool and considered separately.

Free Application for Federal Student Aid (FAFSA): An application completed and filed by a student who wishes to receive federal student aid, including the unsubsidized Stafford loan. The application collects household and financial information used by the U.S. Department of Education to calculate the Expected Family Contribution (EFC) to postsecondary education.

Full Time Student: Students must take a minimum of 12 credit hours per term to be considered a full-time student. 
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Gap Year: A gap year is a chance to spend some time, typically after graduating from high school and before entering college, to recharge and grow/mature while participating in experiential educational opportunities that might include work, travel, internships and community service, or even academic programs in new settings.

Gender-Balance: Some universities require a student body to be comprised of certain ratios of men-women. Admissions and financial aid offices then attempt to build a class with these pre-determined characteristics.

General Educational Development (GED) Certificate: This is a certificate students receive if they've passed a specific, approved high school equivalency test. Students who have a GED may still qualify for federal student aid. A school that admits students without a high school diploma must make available a GED program in the vicinity of the school and must inform students about the program.

Gift Aid: Financial aid, usually a grant or scholarship, that does not have to be paid back and that does not involve employment.

Grad PLUS Loans: A federally sponsored educational loan program in which graduate or professional school students can borrow up to the total cost of attendance minus any financial aid received. Eligibility is not based on need.

Grants: Gift aid that is generally based on need. The programs can be funded by the federal and state governments, as well as the individual schools. Grants do not have to be repaid and are therefore a most desirable form of financial aid.

Guaranteed Student Loans (GSL): See Stafford Student Loan program.

Guaranty Agency: The guaranty agency is an organization that administers the Federal Family Education Loan (FFEL) Program in your state. This agency can give you information on FFEL Loans. For the name, address and telephone number of the agency serving your state, you can contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
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Half-time Status: Refers to students taking at least 6 credits per semester, or the equivalent. Note that schools may choose to set higher minimums than these. You must be attending school at least half-time to be eligible for a Stafford Loan. Half-time enrollment is not a requirement to receive aid from the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loan programs.
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Income Protection Allowance: A deduction against income in both the federal and the institutional methodologies for calculating the family's expected contribution (EFC).

Independent Student: A student who, for financial aid purposes, is not considered dependent on his or her parent(s) for support. Also known as a "self-supporting student". Only the student's income and assets and those of a spouse are evaluated when determining the contribution towards college costs.  Generally, students must be at least 24 years of age by December 31 of the award year to qualify as an independent.  Students with legal dependents also qualify.  Married and graduate students also qualify as independent students. 

Institutional Form: Supplemental financial aid forms required by the individual schools to determine need-based aid eligibility.

Institutional Methodology (IM): An alternative method used to calculate the family's expected contribution (EFC) to college costs. This methodology is generally used by private and a few state schools to determine eligibility for aid funds under the school's direct control. Colleges that use the institutional methodology usually require completion of the PROFILE® or institutional form.

Institutional Student Information Record (ISIR)--An electronic record for schools that contains a student's Expected Family Contribution (EFC), as calculated by the Central Processing System, as well as all the financial and other data submitted by the student on the Free Application for Federal Student Aid (FAFSA). See also Student Aid Report (SAR).  
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Legacy Rating: Children of Alumni are called legacies, and sometimes have an advantage over others in the admissions process (not true in the financial aid process).  The size of the admissions advantage may be determined by the parent's generosity in alumni fund drives.

Lender: The organization that made the loan initially; the lender could be the borrower's school (for Federal Perkins Loans); a bank, credit union, or other lending institution (for FFELs); or the U.S. Department of Education (for Direct Loans).

Loans: These are sums of money that must be repaid. The reason they count as financial aid is that they contain favorable repayment terms and are offered at attractive interest rates below the going commercial rate. 

Long Form: This generally refers to the IRS 1040 form.
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Merit-Based Aid: Merit-based financial aid programs determine eligibility by evaluating a student's ability/potential, based on academic records, or athletic or artistic ability. Individual characteristics, such as ethnicity, are sometimes considered. 
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National Direct Student Loans (NDSL): See Perkins Loan program.

National Student Loan Data System (NSLDS): NSLDS is the Federal database for federal student financial aid where you can find out about the aid you've received. If you've only just applied for aid, you won't find any information on NSLDS yet. NSLDS receives data from schools, guaranty agencies* and U.S. Department of Education programs. The NSLDS Web site is generally available 24 hours a day, seven days a week. By using your PIN, you can get information on federal loan and Pell Grant amounts, outstanding balances, the status of your loans and disbursements made. You can access NSLDS at www.nslds.ed.gov.

Need: See Financial Need.

Need Access Financial Aid Application: A need analysis program operated by the Access Group. It is required by many graduate and professional schools to determine eligibility for institutional aid.

Need Analysis: The process of analyzing household and financial information on a student's financial aid application and calculating an Expected Family Contribution (EFC) to determine the student's need for financial aid for postsecondary education costs.

Need Analysis Forms: Aid applications used to calculate the amount of money the student and parent(s) can be expected to contribute toward educational costs aka expected family contribution (EFC). The most common need analysis forms are: the Free Application for Federal Student Aid (FAFSA) and the Financial Aid PROFILE® form. Consult the individual school's financial aid filing requirements to determine which form(s) are required for that particular school.

Need-Based Aid: Need-based financial aid programs determine eligibility by evaluating the family's financial resources.

Non-Custodial Parent's Statement: A supplemental financial aid application required by ~100 colleges for aid applicants whose parents are separated or divorced or who never married. The individual school's aid policy will determine if this form must be completed. If required, this form will be completed by the non-custodial parent. This is generally the parent with whom the child spent the least amount of time in the preceding 12 months prior to completion of the form.

Non-Custodial PROFILE® (NCP): An on-line form required by some colleges (mostly highly selective, private ones) that is completed by the non-custodial parent. 
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Overaward: Generally, any amount of federal student aid awarded that exceeds a student's financial need.

Overpayment: Any payment of a federal grant or Federal Perkins Loan that exceeds the amount for which a student was eligible. An overpayment may be the result of an overaward, an error in the cost of attendance (COA) or Expected Family Contribution (EFC), or a student not meeting other eligibility criteria, such as citizenship or enrollment in an eligible program.
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Parent Loans for Undergraduate Students (PLUS): A federally sponsored educational loan program in which parents can borrow up to the total cost of attendance minus any financial aid received for each child in an undergraduate program. Eligibility is not based on need.

Parents' Contribution: The amount of money the parent(s) are expected to contribute for the year toward the student's Cost of Attendance.

Part-Time Student: To qualify for most federal student aid programs a student must take six credit hours per term. See also Half-time Status.

Pell Grant: A federally funded need-based grant program for first-time undergraduate students (i.e., the student has not as yet earned a bachelor's or first professional degree). Funds from this program are generally awarded to lower- and lower-middle-income families. Years ago, this program was called the Basic Educational Opportunity Grant (BEOG).

Perkins Loan Program: Formerly known as National Direct Student Loans (NDSL), this federally funded need-based program provides low interest loans to undergraduate and graduate students and is administered by the school's financial aid office. In most cases, repayment does not begin until nine months after the student graduates or leaves school and there are no interest charges while the student is in school. The fixed interest rate is currently 5%.

PLUS Loans: See Parent Loans for Undergraduate Students.

Preferential Packaging: Polite term for buying freshmen.  The situation in which the more desired aid applicants get better aid packages, which are larger in total dollar amount and/or contain a higher percentage of gift aid versus loans. 54 percent of colleges admit to following this practice.

Principal: The amount of money borrowed by the student. Interest is charged on this amount.

PROFILE® Form: A need analysis document written and processed by the College Board to determine eligibility of the institution's funds.

Promissory Note: The binding legal document a borrower signs when they get a student loan. It lists the conditions under which you are borrowing and the terms under which you agree to pay back the loan. It will include information on how interest is calculated, grace periods, and what deferment and cancellation provisions are available to the borrower. It is very important to read and save this document because you will need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearances. 
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Regular Admissions or Regular Decision: A process in which a student applies to a school on or before a specific date and is usually notified in March or April of the senior year. A student may apply to as many schools as he or she chooses via this method, including after having submitted an Early Decision application.

Regular Student: A regular student is one who is enrolled or accepted for enrollment at an institution for the purpose of obtaining a degree, certificate or other recognized education credential offered by that institution. Generally, to receive federal student financial aid, you must be a regular student. There are exceptions to this requirement for some programs.

Retention: The proportion of college freshman who return to school the following fall. This is an objective metric of "freshman happiness".

Rolling Admissions: An application policy where qualified students are accepted on a "first come, first served" basis. This is not a formal early admissions policy, e.g., Early Decision or Early Action, but it is in the best interest of the student to apply as early as possible.

ROTC: The Reserve Officer Training Corps programs that are coordinated at many college campuses by the U.S. Army, Navy, and Air Force. 
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SAR: See Student Aid Report.

SAR Acknowledgement: A federal "output" document, similar to the SAR, that the Central Processing System sends to a student who does not provide a valid e-mail address when he or she files the FAFSA through FAFSA on the Web, files through a postsecondary school, or makes changes at FAFSA on the Web. See also Student Aid Report (SAR).

SAT: A standardized college admissions exam, administered by the College Board, which consists of three (3) 800-point sections for Critical Reading, Math, and Writing.

Satisfactory Academic Progress: To be eligible to receive federal student financial aid, you must meet and maintain your school's standards of satisfactory academic progress toward a degree or certificate offered by that institution. Check with your school to find out its standards.

Scholarships: Gift aid that is usually based on merit or a combination of need and merit. 

Scholarships do not have to be repaid and are therefore a most desirable form of financial aid.

School: A post-secondary educational institution, such as a college, university or career school; not to a high school.

Selective Service Registration: If you are a male born on or after Jan. 1, 1960, are at least 18 years old, and are not currently on active duty in the U.S. Armed Forces, you must register, or arrange to register, with the Selective Service System to receive federal student aid. (Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau are exempt from registering.)

Self-Help: The portion of the aid package relating to student loans and/or work-study.

SEOG: See Supplemental Educational Opportunity Grant.

Short Forms: This generally refers to the IRS 1040A or 1040EZ forms.

Simplified Needs Test: An alternative method used to calculate the family's expected contribution (EFC) to college costs for federal aid purposes, in which all assets are excluded from the formula.  This "exemption" is typically for low- to moderate-income families who file simplified tax returns (1040A, 1040EZ) or receive benefits from any of these programs: Supplemental Security Income, Food Stamps, Free or Reduced-Price Lunch, Temporary Assistance for Needy Families (TANF), Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). 

SLS: See Supplemental Loans for Students.

Stafford Student Loan (SSL) Program: Formerly known as the Guaranteed Student Loan (GSL) program, this federally funded program provides low-interest loans to undergraduate and graduate students and is administered by a bank or other lending institution, which can sometimes be the college itself. In most cases, repayment does not begin until six months after the student graduates or leaves school and there are no interest charges while the student is in school. For new loans disbursed after 30 June 2006, the interest rate is fixed. (Prior loans had variable rates.) There are two types of Stafford loans: subsidized and unsubsidized. The subsidized Stafford loan is need-based and the government pays the interest while the student is in school. The unsubsidized Stafford loan is non-need-based and can be taken out by virtually all students. In many cases, students can elect to let the interest accumulate until after they graduate.

Standardized Forms: The generic term used when referring to any of the need analysis forms that must be sent to a processing service. Every student who wants to apply for any of the federal student aid programs, some of the campus-based student aid programs, and some of the state student aid programs must first complete the federally approved student aid application. The two most commonly used standardized forms are the U.S. Department of Education's Free Application for Federal Student Aid (FAFSA) and the College Board's CSS/Financial Aid PROFILE® form.

Student Aid Application: See Standardized Forms. 

Student Aid Report (SAR): A federal "output" document sent to a student by the Central Processing System. The SAR contains financial and other information reported by the student on the FAFSA. A student receives a paper SAR if he or she files a paper FAFSA and does not provide a valid e-mail address. The student receives a link to online SAR information if he or she provides a valid e-mail address on the FAFSA. If there are no corrections or additional information you must provide, the SAR will contain your Expected Family Contribution (EFC), which is the number that is used to determine your eligibility for federal student aid. All information reported on the SAR also is sent to those schools the student listed on their FAFSA. (See also Institutional Student Information Record and SAR Acknowledgement.)

Student Budget: See Cost of Attendance (COA).

Student's Contribution: The amount of money the student is expected to contribute for the year toward his or her cost of attendance.

Subsidized Loan: Awarded to a student on the basis of financial need. The federal government pays the borrower's accrued interest during some significant periods, such as when the student is in school, thereby "subsidizing" the loan. 

Subsidized Stafford Loan: See Stafford Student Loan (SSL) program.

"Summer Melt": The attrition or loss of committed students between the time the student has sent in their deposit check on May 1 and when classes actually begin. This frequently occurs in times of economic stress.

Supplemental Educational Opportunity Grant: A federally funded need-based grant program for undergraduate students that is awarded by the school's financial aid office.

Supplemental Loans for Students (SLS): A federally subsidized educational loan program for independent undergraduate and graduate students. Eligibility was not based on need. This loan program has been phased into the Stafford Loan Program. Previous borrowing limits under this program are now represented by the mandatory unsubsidized portion of the Stafford Loan.
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Uniform Aid Supplement: A standardized set of supplemental aid questions developed and utilized by a number of highly selective private colleges. On the PROFILE® form, these are known as Section Q questions.

Unmet Need: The amount ($) or percentage of demonstrated need that is not covered in a school's financial aid package. This is informally known as being "gapped" where the financial award is shy of the need.

Unsubsidized Loan: Is not need based; the borrower is responsible for accrued interest throughout the life of the loan, including while still attending school.

Unsubsidized Stafford Loan: See Stafford Student Loan (SSL) program.
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Verification: A procedure through which a school checks the information a student reported on the Free Application for Federal Student Aid (FAFSA), usually by requesting a copy of signed tax returns filed by the student and, if applicable, the student's parent(s) and spouse. Schools must verify information about students selected for verification by the Central Processing System, following procedures established by federal regulations.  The processor places an asterisk next to the Expected Family Contribution (EFC) on SARs and SAR Acknowledgements and flags Institutional Student Information Records (ISIR) to identify students selected for verification. Many schools also select certain other students for verification in addition to those selected by the central processor. Some highly selective private colleges verify 100% of all applicants.
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William D. Ford Federal Direct Loan Program (Direct Loan Program: Federal Direct Stafford Loans (Direct Subsidized Loans), Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans), Federal Direct PLUS Loans (for parents and graduate/professional students), and Federal Direct Consolidation Loans. Funds for these programs are lent to student and parent borrowers by the federal government through schools that participate in the program

Work-Study: See Federal Work-Study (FWS).
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Yield: See Admissions Yield.
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