Financial Aid Definitions
Last updated June 7, 2022
Here are some important financial aid definitions you'll likely come across during the college application process!
Budget: A plan for how you spend your money. Your budget should show you how much you make vs. how much you spend in a given week/month, how much you can afford to save, and what expenses you can or should cut out to save money. Your budget should ensure you have enough money to cover your living expenses and in case of emergency.
College expenses: Money used to pay for living on campus, food, books and class fees, personal expenses like laundry, eating out, and more - and transportation.
Cost of attendance (COA): An estimate of what you can expect to pay for one year of college. This includes tuition and fees, room and board, books and supplies, transportation, and more.
Expected family contribution (EFC): A number that a school uses to determine how much financial aid you’re eligible for. Despite its name, it’s not how much your family will have to pay for you to attend.
Federal student loans: Loans from the federal government that need to be repaid with interest over time after graduating. These loans typically offer borrowers lower interest rates and have more flexible repayment options than private loans. A financial aid award letter may also list the amount you can borrow with a credit-based loan (like a federal Direct PLUS Loan or a private student loan). (Source: PSSCN Financial Aid Toolkit Definitions)
Federal work-study: Program at participating colleges in which you can work part-time jobs - both on and off campus - toearn money for fees associated with attending college or living expenses.
Financial aid: Any grant, scholarship, loan or work-study job offered to help you pay for college expenses.
Financial aid award letters: An official letter from a college or university you’ve been accepted to that breaks down the details of your financial aid package. It may include financial aid from a variety of sources including grants, scholarships, work-study and loans.
Financial need: Amount calculated by taking the cost of attendance at a college minus your expected family contribution as calculated by the FAFSA.
Free Application for Federal Student Aid (FAFSA): The online form students must complete to apply for federal, state-based, and campus-based financial assistance for college.
Grants: Amounts of money given to students with financial need by their state or federal government. These never need to be paid back.
Net Price: The amount of money that a student pays to attend an institution in a single academic year AFTER subtracting scholarships and grants they receive.
Parent PLUS loans: A loan your parent or guardian can take on your behalf to pay for your college expenses. They are legally tied to the loan and its repayment.
Private loans: Loans that can come from banks, colleges and private organizations. Typically, they have higher interest rates and less favorable repayment options. Like unsubsidized loans, private loans gain interest as soon as you borrow the money.
Scholarships: Sums of money to help pay for college. These can be need, merit, or interest-based and can be awarded by a school, company, or private organization. These never need to be paid back.
State-based financial aid: Financial assistance for eligible students awarded by the state rather than the federal government. Undocumented students may be eligible for financial aid in certain states. Federal financial aid is unfortunately not available to undocumented students at this time.
Subsidized loans: Loans for college that do not accrue interest while you are attending school.
Unsubsidized Loans: Loans in which you are responsible for the interest from the moment you receive the money.
Any questions about financial aid? Text #Hello to 33-55-77 to speak with one of our College Advisors!