Glossary

A

Academic Competitiveness Grant (ACG) Program
A federal need-based grant for students in their first and second years of secondary education with strong academic backgrounds. Students are not required to pay this grant back.

C

Cancellation
Cancellation of a loan releases you from the obligation to repay all or a part of your student loans. Your loan may be cancelled if you meet certain requirements.
Capitalization
The practice of charging interest on interest that has already accrued. Interest is added to the principal loan balance and interest is subsequently charged on the new higher loan balance.
Consolidation
Combining all of your existing student loans into one, larger loan, often with a fixed interest rate, so that only one large payment needs to be made a month, rather than several smaller payments.
Cost of Attendance (COA)
The total amount of the various costs of attending college, including tuition, fees, books, supplies, room and board (that is, housing and food), and transportation or travel to and from college.
Credit Report
A history of all of your credit card payments, loan payments, and other financial information for the last several years, as reported by the three major credit bureaus, Equifax, Experian, and Transunion.
Credit Score or FICO Score
A part of your credit report that grades your creditworthiness and assigns a score. The FICO score is one type of credit score and uses a range from 500 to 850.

D

Default
Failure to pay a loan as agreed.
Deferment or Forbearance Period
Period of time when a student in not required to make loan payments on his or her student loans. In order to defer your student loans, you must make arrangements for the deferment or forbearance with your lender.
Direct Loans
See Federal Student Loans.
Discharge
your loan may be discharged under certain circumstances. A discharge releases you from the obligation to repay your loan. A loan may be discharged if your school closes, false certification, or if you die or become totally and permanently disabled.

E

Expected Financial Contribution (EFC)
The amount a student and/or the student's family is expected to pay for college, according to the federal government. This is determined by the information the student enters onto his or her FAFSA form.

F

FAFSA (Free Application for Federal Student Aid)
The primary form used to determine a student's eligibility for financial aid. Any student who wishes to be considered for financial aid for any college must complete this form.
Federal Income Tax Forms
The forms that you use to file your yearly taxes. Most commonly used are 1040, 1040EZ, and 1040A forms.
Federal Pell Grant
Need-based financial aid that does not have to be repaid, and this distributed by the federal government.
Federal Student Aid
Assistance from the federal government in paying for college. This includes Pell and FSEOG grants, Stafford Loans, Direct Loans, Perkins Loans, and PLUS Loans. In order to receive federal student aid, you must file a FAFSA form and demonstrate financial need.
Federal Student Loans
Loans that are offered to students and/or their families based on financial need. These loans, which include Perkins Loans, Stafford Loans, Direct Loans, and PLUS Loans, have very low interest rates and must be used to pay for college.
Federal Supplemental Educational Opportunity Grant (FSEOG)
Need-based financial aid that does not have to be repaid and that is distributed by the federal government.
FICO Score
See Credit Score.
Financial Aid
Financial resources geared toward helping students and/or their families cover the costs of attending college.
Financial Aid Package
The amount of federal, state, and college money (in the form of grants, scholarships, loans, and work-study) that is made available by a college or university to help a student pay for attendance at that school.
Financial Aid
The difference between the cost of attending a particular college and what a student and/or his or her family can afford to pay.
Forbearance
See Deferment.

G

Grace Period
The period after you graduate before a student must begin repaying student loans. Typically this period is six months long. For Perkins Loans, the period is nine months.
Grants
Financial aid money that does not have to be repaid. Generally, grants are awarded based on the student's financial need.

L

Loans
Money that is borrowed by the student or the family to pay for college costs. This money must be repaid after the student leaves college.

M

Merit-based aid
Financial aid awarded to students who demonstrate outstanding academic achievement, or special talent in the arts, athletics, or other areas.

N

National SMART Grant Program
A federal need-based grant for students in their third and fourth years of secondary education with strong academic backgrounds in math and science. This does not need to be repaid back.
Need-based aid
Financial aid awarded to students who demonstrate financial need as determined by the college they attend or plan to attend.

P

Perkins Loans
See Federal Student Loans.
Personal Identification Number (PIN)
A unique number that the federal government assigns to a person after he or she applies online (www.pin.ed.gov). This number must used to electronically sign the FAFSA form.
PLUS Loans
See Federal Student Loans.

S

Scholarships
Financial aide money that does not have to be repaid. Generally, scholarships are awarded based on the student's merit.
Stafford Loans
See Federal Student Loans.
Student Aid Report (SAR)
A form sent to a student after his or her FAFSA has been processed that the student can use to verify his or her information and make corrections to the FAFSA, if needed.
Subsidized
When a federal loan is subsidized, the government pays the interest on this loan while the student is in school.

U

Unmet Need
The difference between the student's financial need and the amount of financial aid he or she receives from the college.
Unsubsidized
An unsubsidized loan will continue to collect interest while a student is in school.

W

W-2 Form
A record of all the money you have earned from a particular employer during one year.
Work-Study
Need-based financial aid students earn by working at work-study jobs on campus or in off-campus community organizations. Students can use their paychecks toward living expenses or other costs of college during the school year.