Financial Aid Glossary

From grants and scholarships to FAFSA and federal student aid, there’s a lot for you to know about financial aid. That’s why we’ve compiled an alphabetical list of the most frequently used financial aid terms— check it out below!

Cost of Attendance
Cost of attendance (COA) is the total cost for you to attend a college or university each year, before financial aid. COA includes the following: tuition and fees; room and board (cost of housing and food); books and supplies; and other livings expenses, such as transportation.

CSS/Financial Aid PROFILE
CSS/Financial Aid PROFILE is a financial aid application offered by the College Board, and used by more than 400 colleges, universities, and private scholarship programs to award non-federal financial aid. Learn more at cssprofile.collegeboard.org >

Demonstrated Need
Your demonstrated (or financial) need is the difference between the cost of attendance (COA) and your expected family contribution (EFC).

Expected Family Contribution
Your expected family contribution (EFC) is an estimate of how much your family can afford to pay for you to attend college. Your EFC is determined by the financial information — including income, assets, and family size — you provide on your FAFSA (Free Application for Federal Student Aid). Colleges use your EFC to help determine your eligibility for financial aid.  

FAFSA
FAFSA is the Free Application for Federal Student Aid, which you use to apply for federal student aid, including grants, loans, and work-study funds. And many states and colleges use your FAFSA to determine your eligibility for state and/or school aid. Learn more at fafsa.gov >

Federal Pell Grant
A Federal Pell Grant is for undergraduate students with financial need.

Federal Student Aid
Federal student aid is financial aid provided to you by the federal government, and includes grants, loans, and/or work-study funds. To be eligible, you must complete and submit your FAFSA.

Financial Aid
Financial aid is money given to you (scholarships and/or grants) or loaned to you to help pay for college.

Financial Aid Offer
Your financial aid offer (also known as your financial aid package) is the total amount of financial aid offered by a college or university. It includes both federal and non-federal aid to help pay for your college expenses.

Financial Aid Office
The financial aid office at a college or university is responsible for preparing and communicating information about financial aid, and the staff is there to help you apply for and receive student loans, grants, scholarships, and other types of financial aid.

Financial Need
Your financial (or demonstrated) need is the difference between the cost of attendance (COA) and your expected family contribution (EFC).

Grants
Grants (sometimes referred to as “gift aid”) are a type of financial aid that you do not have to pay back. In general, grants are awarded based on your financial need.

Loan
A loan is money that you borrow from a bank, government, or lending company, and that needs to be paid back over an agreed period of time. You’ll almost always pay interest — or a fee/fees for borrowing the money — on your loan. Loans offered by the federal government often have lower interest rates and more flexible payment options.

Merit-Based Aid
Merit-based aid (also known as non-need-based aid) is based on your skills, abilities, or achievements. For example, a merit-based scholarship may be awarded based on your grades in high school.

Need-Aware Admissions
Need-aware is an admissions policy in which colleges or universities consider your ability to pay when they are making their admissions decisions. 

Need-Based Aid
Need-based aid is based on your financial need, and may come in the form of grants, scholarships, loans, and/or work-study. For example, a need-based grant may be awarded if you are a lower-income student.

Need-Blind Admissions
Need-blind is an admissions policy in which colleges or universities make their admissions decisions without considering your financial need.

Net Price
The net price is the actual cost for you to attend a college. You calculate it by taking the college’s cost of attendance (COA) and subtracting any scholarships and/or grants (“gift aid”) you’ve received.

Net Price Calculator
A net price calculator (also known as a financial aid calculator) helps you figure out the cost of your college education, and if you’ll need financial aid. This useful, online tool is available on every college and university website, and is based on the financial information you provide.

Scholarships
Scholarships (sometimes referred to as “gift aid”) are awarded to you based on certain characteristics or qualities, such as academic achievement, and can be merit-based or need-based. Like grants, scholarships do not need to be repaid.

Student Aid Report (SAR)
Your Student Aid Report (SAR) is a summary of the information you submitted on your FAFSA. You’ll receive your SAR by email or mail, and it will contain your EFC, which is used to determine your eligibility for federal student aid (and in some cases, state and/or school aid).

Subsidized Federal Stafford Loan
Subsidized Federal Stafford Loans (or Direct Subsidized Loans) are available for undergraduate students, and are awarded based on financial need. With this type of loan, the federal government pays the interest while you are enrolled in college.

Unsubsidized Federal Stafford Loan
Unsubsidized Federal Stafford Loans (or Direct Unsubsidized Loans) are available for undergraduate or graduate students, and there is no financial-need requirement. Unsubsidized loans start accruing interest right away.  

Work-Study
Work-study is a federal student aid program that provides you with a part-time job (usually on-campus in the library, dining hall, or administrative office, for example, at the school you’re attending) to help pay for your college expenses.

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