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Financial Aid Glossary

Below is a list of words and definitions concerning the financial aid process. Questions may be directed to our financial aid office or call the Department of Education at (800) 4-FED-AID.

Capitalized—With an unsubsidized loan, the interest will be added to the principal amount of the student's loan and additional interest will be based upon the higher amount. This increases the amount the student has to repay. The student can choose to pay the interest as it accumulates, which will save the student money in the long run.

COA—Cost of Attendance. This is the budgeted amount of attendance for a college or university and includes tuition, fees, room and board, books, and miscellaneous expenses. Generally this estimate is higher than the published cost to attend a school, and is used in conjunction with a student's expected family contribution (EFC) to determine the student's aid eligibility.

Dependent Student - Student who does not meet the criteria to be independent. See Independent Student.

EFC—Expected Family Contribution. When the FAFSA has been processed, the federal government uses a formula to determine the amount a student and his/her family are expected to contribute toward the student's education for an academic year.

FAFSA—Free Application for Federal Student Aid. This is the federal application required for all need-based grants, loans, and work-study, as well as non-need based unsubsidized Federal Stafford loans.

Grants—Financial aid a student does not have to pay back later. This is a gift.

Independent Student—A student who meets one of the following criteria:

  • Was born before January 1, 1989;
  • Is married;
  • Has legal dependents other than a spouse;
  • Is an orphan or ward of the court (or was a ward of the court until age 18);
  • Is a veteran of the U.S. Armed Forces (this does not include students in ROTC);
  • Is serving on active duty in the US Armed Forces for purposes other than training
For more information (and more criteria) call (800) 4-FED-AID.

Loans—With this aid, students borrow money that they later repay with or without interest. Several types of loans exist, and amounts and terms differ.

SAR—Student Aid Report. Four to six weeks after a student sends his/her FAFSA to the government, the student receives this form in the mail. Included in the form is the student's EFC. Copies of the SAR are also sent to the schools the student lists on the FAFSA.

Subsidized Loan—This loan is awarded on the basis of financial need. The student will not be charged any interest before he or she begins repayment, as the federal government pays this interest.

Unsubsidized Loan—This loan is not awarded on the basis of need. The student will be charged interest from the time the loan is disbursed until it is paid in full. If the student allows the interest to accumulate, it will be capitalized.

Verification—When a student completes the FAFSA, sometimes it is randomly selected for a process called verification. In this process, the government asks the student and the student's family to confirm the information that was put on the FAFSA.  In order for the student's financial aid to be processed, a worksheet will need to be completed and returned to our office. Also, approximately 10-14 days after efileing Federal taxes (6-8 weeks after mailing in paper tax returns), the student's family will need to return to the FAFSA website and use the "Link to IRS" to retrieve tax return data directly from the IRS.

Work-Study—This type of aid allows a student to work and earn money to help pay for school. This is need-based.

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