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Financial Aid Glossary

CSS/Financial Aid PROFILE: A data collection and need analysis service used in awarding private financial aid funds. A fee is required to submit the form. Many private colleges require this form.

COA (Cost of Attendance): This cost is different for each college and is determined by totaling the costs for tuition, fees, room and board, books, supplies, personal expenses and travel.

Demonstrated Need: The amount of financial need calculated after the deduction of the expected family contribution. This will be determined by the financial aid officer using Federal Methodology to calculate need based upon information on the FAFSA, or using Institutional Methodology to calculate based upon the information on the FAFSA, Profile and institution specific financial aid forms.

EFC (Expected Family Contribution): The total amount which a student and her family are expected to pay toward colleges costs from their income and assets. The EFC, when subtracted from the COA, equals a student?s financial need. When used in the calculation of eligibility for government sponsored aid and loans, the EFC is determined by a need analysis using information on the FAFSA and Federal Methodology .

FAFSA (Free Application for Federal Student Aid): A form distributed and processed by the Department of Education. All colleges require this form which determines eligibility for all forms of federal aid and most state scholarship programs. It may be submitted online after receipt of a PIN. The FAFSA must be submitted after January 1 of the year for which a student is seeking aid and before the college's financial aid deadline.

Family Contribution: See EFC. The phrase Family Contribution is sometimes used by private colleges and universities to describe the same concept of family contribution from income and assets. Private institutions use Federal Methodology, Institutional Methodology, or some combination, to calculate family contribution based upon information on the FAFSA, the CSS Profile and college specific financial aid applications.

Federal Methodology: A standard formula used for needs analysis to determine eligibility for federal and state sponsored financial aid.

Full-need: When provided by a college, full-need aid meets all of a student's demonstrated need through grants, loans and work-study; no gap is left. Families should be cautioned that "demonstrated need" is a term of art, referencing need as defined by financial aid methodology, and often varies significantly from the family's perception of their financial need.

Gapping: The increasingly common practice of leaving a gap between the expected family contribution, the financial aid provided by the institution and the full cost of attendance. While many colleges commit to meet demonstrated need based upon need analysis, not all can or do. If a student is "gapped" the family must find the additional money elsewhere to pay the unmet need.

Gift Aid/Grant: Money, often termed scholarships or grants, that does not have to be repaid or require a student's employment.

Institutional Methodology: Another standard formula used for calculation of financial need, IM is based upon information on the FAFSA, CSS Profile and college specific financial aid applications. The IM varies from the FM in several respects, e.g. the IM adjusts the Parents' Gross Income, disallowing losses permitted in the federal tax system, and considers home equity in the calculation of parents' assets.

Merit Scholarship: Money awarded in whole or in part based upon the student?s record and performance.

Needs Analysis: The process determining a family's demonstrated need for financial assistance. Differences in calculation of need may arise from differences in the methodology used to determine family contribution and differences in the costs of colleges.

Need Based Scholarship: A scholarship awarded based solely upon a family's demonstrated financial need.

Need-Blind Admission: Admission without regard to the financial resources of the applicant or the financial aid required by the student to enroll.

Need-Sensitive Admission: Admission which considers the financial resources of the family and the financial aid required by the student to enroll.

Perkins Loan: Available for students who qualify for need-based federal financial assistance, the Perkins Loan is made at a fixed rate of 5%. Repayment does not begin until nine months after graduation or reduction to less than half-time student enrollment. The maximum loan amount is $4,000 and students must borrow the full amount of the Stafford Loan before receiving the Perkins Loan.

Plus Loan Program (PLUS): A federally guaranteed low interest loan program for parents of dependent students. Assuming credit approval, the annual borrowing limit is the estimated cost of attendance minus financial aid. Parents of all income levels can apply. There is no in-school deferment of repayment. The loans, which can be consolidated, are available at banks, credit unions and other lending institutions.

Preferential packaging: Aid packages which provide a larger percentage of grants, generally offered to attract students likely to receive admission and aid elsewhere.

Self-Help: Student financial aid in the form of loans or school term employment.

SAR (Student Aid Report): Provided by the U. S. Department of Education to the student after submission of the FAFSA, the SAR sets forth the federal government's determination of the family?s EFC and lists information submitted on the FAFSA. The SAR is used by colleges to determine eligibility for government and certain institutional financial aid programs.

Stafford Loans (Subsidized): The Subsidized Stafford Loan is a guaranteed student loan for students who qualify for federal financial assistance and is awarded based on financial need. The variable interest rate, set each July, has a cap of 8.25 %. The maximum loan amount differs by grade level, presently starting at $2,625 for freshmen. There is a grace period of six months after graduation or reduction to less than half-time student enrollment.

Stafford Loans (Unsubsidized): A loan available to students who do not qualify for need-based aid, the Unsubsidized Stafford Loan provides the lowest rate and cap of any no-need education loan. The Unsubsidized Loan has the same terms as the Subsidized Loan except that the student must either pay interest, or add accrued interest to the principal, while attending school.