Get familiar with these financial terms
Adjusted Gross Income (AGI)
Your or your family's wages, salaries, interest, dividends, etc., minus certain deductions from income as reported on a federal income tax return.
Amount of aid a school expects to pay a student based on the student’s current grant and loan eligibility, enrollment, Expected Family Contribution (EFC), and the school's cost of attendance.
Expected Family Contribution (EFC)
This is the number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your FAFSA form, the application for federal student aid. Your EFC is reported to you on your Student Aid Report (SAR).
Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days.
A temporary postponement of payment on a loan that is allowed under certain conditions and during which interest generally does not accrue. Some student loans are deferred until six months after you graduate from college.
A federal student loan, made through the William D. Ford Federal Direct Loan Program, that eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans are types of Direct Loans.
Direct PLUS Loan
A loan made by the U.S. Department of Education to graduate or professional students and parents of dependent undergraduate students. The borrower is fully responsible for paying the interest regardless of the loan status. Disbursement
Payment of federal student aid funds to the borrower by the school. Students generally receive their federal student aid in two or more disbursements.
The Free Application for Federal Student Aid — students should reapply each year they are enrolled in college for financial aid consideration.
The difference between the cost of attendance (COA — varies by school) at a school and your Expected Family Contribution (EFC — does not vary).
Financial aid, often based on financial need, that does not need to be repaid (unless, for example, you withdraw from school and owe a refund).
Master Promissory Note
The binding legal document that you must sign when you get a federal student loan. It lists the terms and conditions under which you agree to repay the loan and explains your rights and responsibilities as a borrower. (See step 6 in Financial Aid tab)
Based on a student's skill or ability. Example: A merit-based scholarship might be awarded based on a student's high grades.
Based on a student's financial need. Example: A need-based grant might be awarded based on a student's income level.
A non-federal loan made by a lender such as a bank, credit union, state agency, or school.
Student Aid Report (SAR)
A summary of the information you submitted on your Free Application for Federal Student Aid (FAFSA) form.
A loan based on financial need for which the federal government generally pays the interest that accrues while the borrower is in an in-school, grace, or deferment status, and during certain periods of repayment under certain income-driven repayment plans.
A federal student aid program that provides part-time employment while you are enrolled in school to help pay your education expenses. It's not guaranteed you'll have a position available, however.
A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan. Note that interest payments are made while the student is enrolled in school.
The process the college uses to confirm that the data reported on your FAFSA form is accurate. The college has the authority to contact you for documentation that supports income and other information that you reported.