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Financial Aid: Glossary of Terms

Academic Year

A period of at least 30 weeks of instructional time during which a full-time student is expected to complete at least 24 semester or trimester credit hours, or at least 36 quarter hours, at an institution that measures program length in credit hours; or at least 900 clock hours at an institution that measures program length in clock hours.

Attempted Credits

Attempted Credits refers to the number of credits attempted at the institution. An attempted credit is one for which the student was required to pay for (regardless of whether or not they received financial aid for the credit).

Budget

See Cost of Attendance (COA)

Citizen/Eligible Non-Citizen

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 with an I-151, I-551, or I-551C (Alien Registration Receipt Card)
• Freely Associated States citizen

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:

• Refugee
• Asylum Granted
• Indefinite Parole and/or Humanitarian Parole
• Cuban-Haitian Entrant, Status Pending
• Conditional Entrant (valid only if issued before April 1, 1980)

COA (Cost of Attendance)

The cost of attendance (COA) is the total cost of education for the student, including tuition, fees, room and board, books and supplies, transportation, and miscellaneous expenses. COA is school-specific and is determined by the financial aid offices at each school.

Consolidation Loan

A consolidation loan combines several loans into one bigger loan. This sometimes results in a lower interest rate, as when a consumer loan is used to pay off credit card balances. Such loans often reduce the size of the monthly payment by extending the term of the loan. An extension of the term of the loan may also increase the overall cost of the loan. Consolidation loans also simplify the repayment process by allowing a single payment instead of several.

Default

A loan is in default when the borrower fails to meet the terms and conditions of the loan. If you default on a loan, the university, the holder of the loan, and the government can take legal action to recover the money, including garnishing your wages. Defaulting on a government loan will make you ineligible for future federal financial aid. This ineligibility for financial aid remains in effect until such time as the defaulted loan is paid in full or until you have made at least 6 consecutive on-time reasonable monthly payments as determined by the holder of the loan.

Deferment

Deferment occurs when a borrower is allowed to postpone repayment of a student loan. For example, some federal loan programs allow students to defer their loans while they are in school. Other loan programs allow the student to defer the interest payments by capitalizing the interest. (See also Forbearance.)

Dependency Status

A student's dependency status determines to what degree the student is expected to have access to parental financial resources. An independent student is one who is 24 years old as of January 1, is married, is a graduate or professional student, has legal dependents other than a spouse, is a veteran, or is an orphan or ward of the court. All other students are considered dependent and, as such, must provide parental information on the Free Application for Federal Student Aid (FAFSA).

Disbursement

The date on which the loan funds are released to the university for payment.

EFC (Expected Family Contribution)

The Expected Family Contribution (EFC) is the amount of money the federal government expects the family to be able to contribute to the student's education. The EFC is calculated upon submission of the FAFSA according to a formula established by Congress. The difference between the COA and the EFC is the student's financial need.

EFT (Electronic Funds Transfer)

Electronic Funds Transfer is used by lenders to wire funds directly to participating schools without requiring an intermediate check for the student to endorse.

Entrance Interview

A required session for first time student borrowers during which the terms and conditions of the loan are explained. Student borrowers must attend before their loan checks can be disbursed.

Exit Interview

Students with educational loans are required to meet with a financial aid administrator before they graduate or leave school or stop attending on at least a half-time basis. During this exit interview, the repayment terms of the loan and the repayment schedule are reviewed with the student.

FAA

A FAA is a Financial Aid Administrator, a university/college employee who is involved in the financial aid process.

FAFSA

The FAFSA is the Free Application for Federal Student Aid. This application is the first step in the financial aid application process.

FFELP

The FFELP is the Federal Family Education Loan Program, and includes the Federal Stafford Loans and the Federal PLUS loans.

Financial Aid Package

The financial aid package is the complete collection of grants, fellowships, scholarships, loans, and work-study employment offered to a student to financially enable them to attend the college.

Financial Need

The difference between the Cost of Attendance (COA) and the Expected Family Contribution (EFC) is the student's financial need - the gap between the student's resources and the cost of attending the school. The financial aid package is often based on the amount of financial need. The process of determining a student's need is known as the need analysis and is performed by the federal processor after submission of the FAFSA.

Forbearance

A forbearance is a condition where the lender allows the borrower to postpone repaying the principal of their loan, but requires the borrower to continue paying the interest charges. (See also Deferment.)

(FWS) Federal Work Study)

The Federal Work-Study program is awarded to eligible undergraduate and graduate students on the basis of financial need. Through this program students work part-time on-campus, earning wages paid biweekly, starting at minimum wage per hour, to assist them with their educational expenses.

Grace Period

A short time period after graduation during which the borrower is not required to begin regular repayment of their student loan. The typical grace period is six or nine months depending on the type of loan program.

Grant

A grant is financial aid that the student does not have to repay. Some examples of Grant programs that Mitchell College participates in include; Federal PELL, Federal SEOG, and the CT State Grant programs.

Interest

Interest is an amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. All new Federal Stafford and PLUS loans use capped variable interest rates that are tied to the rates for federal treasury bills.

ISIR (Institutional Student Information Report)

An ISIR is an electronic reproduction of a Student Aid Report, transmitted by the Federal Processor to individual Financial Aid Offices and is just as valid as a regular SAR.

Lender

The bank or lending institution that provides the money to the borrower for the loan.

Origination Fee

The origination fee is an upfront charge deducted from the loan by the bank to pay part of the loan's administrative costs.

Pell Grant

The Pell Grant is a federal grant that provides funds of up to $5,350 (for 2010-2011) based on the student's financial need.

PIN

A US Department of Education personal identification number which is assigned to an individual and allows them to sign FAFSA applications and corrections electronically.

Principal

Principal is the amount of money borrowed under the loan. Interest is charged as a percentage of the principal.

Professional Judgment

In some cases, the Office of Student Financial Aid may adjust your cost of attendance, or the information used to calculate your Expected Family Contribution (EFC) to take into account circumstances that might affect the amount you and/or your family are expected to contribute toward your education. Also, if there are unusual circumstances that would make you independent even though you have been determined to be dependent through the FAFSA process, professional judgement might be applied.

Promissory Note

A promissory note is the binding legal document signed by the borrower before the lender disburses loan funds. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy, and cancellations. The borrower should keep this document until the loan has been repaid.

PLUS Loans

Parent Loans for Undergraduate Students (PLUS) are federal loans available to parents of undergraduate students to help finance the student's education. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received.

SAR (Student Aid Report)

A SAR or Student Aid Report is an acknowledgement sent to the student after filing a FAFSA. The SAR summarizes the information included in the FAFSA and may be requested by your school's Financial Aid Office. The SAR will also indicate Pell Grant eligibility.

Satisfactory Academic Progress (SAP)

A student must be making Satisfactory Academic Progress (SAP) in order to continue receiving federal aid. Please refer to the Policy Manual for information on the Satisfactory Academic Progress Policy.

Scholarship

A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board.

SEOG

The Supplemental Education Opportunity Grant (SEOG) is a federal grant program for undergraduate students with exceptional need. SEOG grants are awarded by the school's financial aid office.

Stafford Loans

Federal Stafford Loans are federally guaranteed student loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on demonstrated financial need; unsubsidized loans are not.

Subsidized Loan

With a subsidized loan, the government pays the interest on the loan while the student is in school at least half time, during the grace period, and during any approved deferment periods.

Unmet Need

The difference between a student's eligibility for financial aid and the amount of financial aid actually received.

Unsubsidized Loan

An unsubsidized loan is a loan for which the government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed. The borrower may be eligible to choose to have the interest deferred and capitalized into the loan principal.

Verification

Verification is a review process in which the Office of Student Financial Aid determines the accuracy of the information provided on the student's financial aid application. During verification the student will be required to submit documentation to support the information listed (or not listed) on the financial aid application.