Financial Aid Terms
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 can demonstrate that they have the "ability to benefit" from the education or
training being offered by passing an approved ability-to-benefit test.
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.
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
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.
With certain loans, such as subsidized FFEL Loans, the U.S. Department of Education pays the
interest that accures 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
student's parents are responsible for paying interest as it accures on these loans. When the interest is not
paid, it is capitalized or added to the principal balance.
Cost of Attendance
The total amount it will cost you to go to school - usually expressed as a yearly figure. It's
determined using rules established by law. The COA includes tuition and fees; on-campus room and board and
allowances for books, supplies, transportation, loan fees, and if applicable, dependent care.
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. In addition the IRS can withhold your income tax refund and apply
it to the amount you owe. Your employer may be requested to withhold the amount that you owe from your
You must be one of the following to receive federal student aid:
- U.S. citizen
- U.S. national
- U.S. permanent resident who has an I-151, I-551, or I-551C (Permanent Resident Card)
A program of organized instruction or study 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.
- 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
Expected Family Contribution
Your Expected Family Contribution (EFC) is the number that's used to determine your eligibility for
federal student financial aid. This number results from the financial information you provided in your FAFSA
application. Your EFC is reported to you on your Student Aid Report.
Financial Aid Package
The total amount of financial aid a student is offered by the school. The financial aid administor
at a postsecondary institution combines various forms of aid into a "package" to help meet a student's education
General Education 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.
The guaranty agency is an organization that administers the Federal Family Education Loan Program
in your state. This agency is the best source of 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
At schools measuring progress in credit hours and semesters, trimesters, or quarters, "half-time"
is at least six semester hours or quarter hours per term for an undergraduate program. At schools measuring
progress by credit hours, but not using semesters, trimesters, or quarters, "half-time" is at least 12 semester
hours or 18 quarter hours per year. You must be attending school of at least half-time to be eligible for a
National Student Loan Data System (NSLDS)
NSLDS is our database for federal student financial aid where you can find out about the aid you've
received. If you've only just applied for the aid, you won't find any information on NSLDS yet. You can access
NSLDS at www.nslds.ed.gov
A promissory note is a 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.
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 educational credential offered by that
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.
Selective Service Registration
To receive federal student financial aid, if you are a male 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, you must register, or
arrange to register, with the Selective Service System.
Student Aid Report
After you apply for federal student financial aid, you'll get your FAFSA results in an e-mail
report within a few days after your FAFSA has been processed or by mail in a few weeks. The Student Aid Report
details all the information that you provided on your FAFSA.