Financial Aid Index of Terms

Financial Aid

In this section you access information concerning a variety of financial aid options. Also available are several on-line publications describing these options.

The Financial Aid Information Page provides a free, comprehensive, independent, and objective guide to student financial aid.

FastWeb is a searchable database of more than 180,000 private sector scholarships, fellowships, grants, and loans from more than 3,000 sources.

The U. S. Department of Education Student Guide for financial aid is published by the Office of Post Secoondary Education.

The Office of Post Secondary Education provides excellent information concerning financial aid including several on-line publications, one of which is the current Student Guide as well as on-line application capabilities and downloading of financial aid software for DOS or Windows based computers.

The Minority Financial Aid Information Page page focuses on information about scholarships and fellowships for minority students. Many of these entries are duplicated from elsewhere on the Financial Aid Information Page.

A listing of Scholarship Programs (Yahoo).

A listing of finanicial Lenders who make student loans.

SallieMae provdes funds for higher education loans.

A listing of Grants available from different sources (Yahoo).

Contact College Aid Offices directly.

Information for California students from the California Student Aid Commission.

Financial Aid Index of Terms

Accrued Interest: Interest on a loan that accumulates and is to be paid in installments at a later time (usually when the principal becomes due) rather than being paid from the time the loan is made. Accrued interest may be compounded or simple.

Adjusted Gross Income (AGI): Taxable income after all allowable deductions are made, such as IRA deductions, moving expenses, self-employment taxes and health insurance, Keogh retirement plans, and alimony paid.

Asset Protection Allowance: A sum subtracted from a family's total assets when determining the "expected family contribution" to college costs. This provides a safety net for families, and the allowance increases with the age of the parents.

Assets: The amount a family has in savings and investments. This includes savings and checking accounts; a business; a farm or other real estate; and stocks, bonds, and trust funds. Cars are not considered assets, nor are such possessions as stamp collections or jewelry. The net value of the principal home is counted as an asset by some colleges in determining their own awards but is not included in the calculation for eligibility for federal funds.

Base Year : The twelve-month period ending on December 31 preceding the year in which a student will enroll. Applicants seeking aid for 2022-2023 will use 2020 as the base year income.

Billing Servicer: A company that manages the billing and collection of loans for lenders.

Borrower: Any "legal entity" -- a person or group--that obtains funds from a lender for a particular period of time. A borrower signs a "promissory note" as evidence of indebtedness.

Business/Farm Supplement: An additional financial aid form required by some colleges for parents and students who own a business or farm. This form is processed by the College Scholarship Service as a supplement to the Financial Aid PROFILE.

Campus-Based Financial Aid Programs: Three major aid programs are funded by the federal government but the disposition of the funds is handled by colleges' financial aid offices: the Federal Supplemental Educational Opportunity Grant, the Federal Perkins Loan, and Federal Work-Study (FWS).

Citizenship/Eligibility For Aid :
To be eligible to receive federally funded college aid, a student must be one of the following:
1.a United States citizen
2.a non-citizen national
3.a permanent resident with an I-151 or I-551 without conditions
4.a holder of an I-94 showing one of the following designations:
"Refugee"
"Asylum Granted"
"Indefinite Parole" and/or "Humanitarian Parole"
"Cuban-Haitian Entrant, Status Pending"
"Conditional Entrant" (valid if issued before April 1, 1980)
5.a participant in a suspension of deportation case pending before Congress

Individuals in the U.S. on an F1 or F2 visa only or on a J1 or J2 exchange visa only cannot get federal aid.

Collateral: Something of value pledged as security for a loan. Banks do not require collateral for all loans.

The College Board: A nonprofit membership organization of colleges, secondary schools, and education associations that administers the SATs and runs the College Scholarship Service.

College Scholarship Service: The arm of the College Board and one of the agencies that processes financial aid information and applications.

Commercial Bank: An institution whose primary function is making loans to businesses.

Compounded Interest: Interest that is periodically added to a principal sum, resulting in a new principal balance which then triggers a new interest assessment.

Cooperative Education: A program offered by many colleges in which students alternate periods of enrollment with periods of employment, usually paid, and which can lengthen the usual baccalaureate program to five years.

Cosigner: A second creditworthy party who signs a promissory note with a borrower who does not have collateral or good credit history. The second party guarantees that the loan will be repaid if the borrower fails to make payments.

Cost of Education (or Cost of Attendance): The total amount it will cost a student to attend college for a year, including tuition and fees; housing and food for the period of enrollment; books and supplies for education; travel costs directly related to attendance; child care expenses; and costs related to a handicap. Other expenses may be added at the discretion of a college's financial aid administrator. Students are supported for the cost of their own education for the duration of one academic year.

Credit Bureau: An agency that compiles and distributes credit and personal information to creditors. This information may include payment habits, number of credit accounts, balance of accounts, and length and place of employment.
Note: You have the right to examine your credit file and to explain or correct information. There is usually a fee for this, but there is no charge if you have been denied credit because of information in a particular credit bureau's file.

Default: A failure to meet a financial obligation, especially a failure to make a payment on a loan. Defaults are recorded on permanent credit records and may result in prosecution and/or loss of future borrowing possibilities.

Deferred Interest: Interest payments that are delayed while a borrower is not gainfully employed, as, for example, when the borrower is a student. This benefit is generally characteristic of federal and state guaranteed student loans.

Dependent Student: A student claimed as a dependent member of household for federal income tax purposes.

Discretionary Income: Income that is available to a person or family after all financial obligations, including taxes, have been accounted for.

Dividends: Dividends are payments of part of a company's earnings to people who hold stock in the company.

Expected Family Contribution (EFC): An amount, determined by a formula that is specified by law, that indicates how much of a family's financial resources should be available to help pay for school. Factors such as taxable and non-taxable income, assets (such as savings and checking accounts), and benefits (for example, unemployment or Social Security) are all considered in this calculation. The EFC is used in determining eligibility for Federal need-based aid

Federal Direct Student Loans: Under this new program, students may obtain Federal loans directly from their college or university with funds provided by the U.S. Department of Education instead of a bank or other lender.

Fees: These are charges that cover costs not associated with the student's course load, such as costs of some athletic activities, clubs, and special events.

Financial Aid: Financial aid in this handbook refers to money available from various sources to help students pay for college.

Financial Aid Package: The total amount of financial aid a student receives. Federal and non-Federal aid such as grants, loans, or work-study are combined in a "package" to help meet the student's need. Using available resources to give each student the best possible package of aid is one of the major responsibilities of a school's financial aid administrator.

Financial Need: In the context of student financial aid, financial need is equal to the cost of education (estimated costs for college attendance and basic living expenses) minus the expected family contribution (the amount a student's family is expected to pay, which varies according to the family's financial resources).

General Educational Development (GED) Certificate: The certificate students receive if they have passed a high school equivalency test. Students who don't have a high school diploma but who have a GED will still qualify for Federal student aid.

Grant: A grant is a sum of money given to a student for the purposes of paying at least part of the cost of college. A grant does not have to be repaid.

Interest: This refers to the amount that your money earns when it is kept in a savings instrument.
Investment: In this handbook, an investment refers to using your money to invest in something that will enable you to earn interest or dividends over time.

Liquidity: A term that refers to how quickly you can gain access to money that you invest or deposit in some kind of savings instrument.

Loan: A loan is a type of financial aid that is available to students and to the parents of students. An education loan must be repaid. In many cases, however, payments do not begin until the student finishes school.

Merit-based Financial Aid:This kind of financial aid is given to students who meet requirements not related to financial needs. Most merit-based aid is awarded on the basis of academic performance or potential and is given in the form of scholarships or grants.

Need-based Financial Aid: This kind of financial aid is given to students who are determined to be in financial need of assistance based on their income and assets and their families' income and assets, as well as some other factors.

Pell Grants: These are Federal need-based grants that were given to over 4 million students for school year 1992Ü93. In school year 1993Ü94, the maximum Pell Grant was $2,300.

Perkins Loan: This is a Federal financial aid program that consists of low-interest loans for undergraduates and graduate students with exceptional financial need. Loans are awarded by the school.

PLUS Loans: These Federal loans allow parents to borrow money for their children's college education.

Principal: This refers to the face value or the amount of money you place in a savings instrument on which interest is earned.

Proprietary: This is a term used to describe postsecondary schools that are private and are legally permitted to make a profit. Most proprietary schools offer technical and vocational courses.

Return: Return refers to the amount of money you earn through a financial investment or savings instrument. You earn money on investments and savings instruments through interest earnings or dividends.

Risk: In reference to saving money or investing money, risk refers to the danger that the money you set aside in some kind of savings plan or investment could be worth less in the future.

Savings Instrument: In this document, savings instrument refers to any kind of savings plan or mechanism you can use to save money over time. Examples of savings instruments discussed in this handbook are savings accounts, certificates of deposit (CDs), and money market accounts.

Scholarship: A scholarship is a sum of money given to a student for the purpose of paying at least part of the cost of college. Scholarships can be awarded to students based on students' academic achievements or on many other factors.

SEOG (Supplemental Educational Opportunity Grant): This is a Federal award that helps undergraduates with exceptional financial need, and is awarded by the school. The SEOG does not have to be paid back.

Stafford Loans: These are student loans offered by the Federal Government. There are two types of Stafford Loans--one need-based and another non-need-based. Under the Stafford Loan program, students can borrow money to attend school and the Federal Government will guarantee the loan in case of default. Under the Stafford Loan programs, the combined loan limits are $2,625 for the first year, $3,500 for the second year, $5,500 for the third or more years. An undergraduate cannot borrow more than a total of $23,000. Tuition: This is the amount of money that colleges charge for classroom and other instruction and use of some facilities such as libraries. Tuition can range from a few hundred dollars per year to more than $19,000. A few colleges do not charge any tuition.