The following are common terms and their definitions in the world of financial aid.

Academic Year -- Time in which a full-time student should complete two semesters (24 hours), two trimesters, or three quarters at a college, university, technical or vocational school. Or it must be at least 36 quarter hours if a program is measured in credit hours.

Cost of Attendance (COA) -- The total amount it will cost a student to go to school, usually expressed as a yearly figure. It is determined using rules established by the U.S. Congress. The COA includes tuition and fees; on-campus room and board (or a housing and food allowance for off-campus students); and allowances for books, supplies, transportation, loan fees, and, if applicable, dependent care, costs related to a disability, and miscellaneous expenses, including an allowance for the rental or purchase of a personal computer. Also included are reasonable costs for eligible study-abroad programs. An allowance (determined by the school) is included for reasonable costs connected with a student's employment as part of a cooperative education program. For students attending less than half time, the COA includes only tuition and fees and an allowance for books, supplies, transportation, and dependent-care expenses. Talk to the financial aid administrator at the school you're planning to attend if you have any unusual expenses that might affect your cost of attendance.

Cost of Education -- In addition to tuition, the cost of education includes room and board (on or off campus), books, supplies, transportation and miscellaneous fees.

Deferment -- A temporary period during which a borrower is not required to make payments. Deferments are more common in Federal loan programs rather than alternative loans.

• For Subsidized Stafford Loan borrowers (and Perkins Loan borrowers), many deferments are subsidized, meaning the interest that accrues on the loan during the deferment is paid by the federal government.
• Some deferments are unsubsidized, meaning the interest that accrues must be paid by the borrower.

Direct Lending -- The Direct Lending Program is another approach to delivering educational loans to eligible student borrowers. The terms and conditions governing Direct Loans are similar to the Federal Family Education Loan Program (FFELP) program. The difference is that the federal government lends funds to eligible borrowers through the school, eliminating the role of lenders and guaranty agencies. Students repay their loans directly to the federal government. Not every school participates in this program. Check with the financial aid officer at your institution. If a school is a direct lender, it will determine how a federal student loan is obtained.

Eligible Program -- A course of study that leads to a degree or certificate and meets the U.S. Department of Education's requirements for an eligible program. To get federal financial aid, you must be enrolled in an eligible program, with two exceptions:

• If a school has told you that you must take certain coursework to qualify for admission into one of its eligible programs, you can get a Direct Loan or a FFEL Program Loan (or your parents can get a PLUS Loan) for up to 12 consecutive months while you're completing that coursework. You must be enrolled at least half time, and you must meet the usual student aid eligibility requirements.
• If you're enrolled at least half time in a program to obtain a professional credential or certification required by a state for employment as an elementary or secondary school teacher, you can get a Federal Perkins Loan, Federal Work-Study, a Direct or FFEL Stafford loan, (or your parents can get a PLUS Loan) while you're enrolled in that program.

Enrollment Status -- The number of credit hours being attempted by a student. Normally, students must be half-time or more to apply for scholarships. Individual programs will list this criteria.

Expected Family Contribution (EFC) -- Using Federal Methodology and individual family size and finances, this figure is established to set an available income that can be used by a family for the student's education.

Federal Direct Student Loan Program (FDSLP) -- The program name for loans that are both guaranteed and funded by the federal government. If your school is a "Direct Lending School", your Stafford Loan is administered by the Federal Direct Student Loan Program (FDSLP). Funds for "direct loans" are provided by the US government directly to students and their parents through their schools. Applications can be obtained from your school. Banks and guarantee agencies are not involved in the process.

Federal Family Education Loan Programs -- The Federal Family Education Loan Program (FFELP) was formerly known as the Guaranteed Student Loan (GSL) Program. The FFELP program includes the Federal Stafford Loans (subsidzied and unsubsidized), Federal PLUS Loans, and Federal Consolidation Loans. Funds for these programs are provided by private lenders and the loans are guaranteed by the federal government.

Federal Pell Grant -- A need based financial aid program funded by the federal government. Students with an EFC less than $x are eligible for the Pell Grant. The amount of the award is based on the student's enrollment level (full time, three-quarter time, etc.) and the cost of attendance.

Federal PLUS Loan -- A federally guaranteed loan program that allows parents to borrow funds to help pay educational expenses. The program does require the borrower to pass a simple credit check. The loan's interest rate is variable, but new loans have a maximum interest rate of 9%.

Federal Stafford Loan -- A federally guaranteed loan program that allows students to borrow funds from lenders. Stafford loans allow the student to defer payments while he/she is in school. The interest rate for new Stafford Loans is variable but will not exceed 8.25%.

Federal Supplemental Education Opportunity Grant (SEOG) -- A need based financial aid program funded by the federal government. Colleges receive an annual allocation of SEOG and, within certain guidelines, develop an awarding policy for this fund.

Federal Work Study (FWS) -- Federally funded program that allows colleges and universities to create campus based employment programs for financial aid recipients.

Free Application for Federal Student Aid (FAFSA) -- The official document used by every college and university to determine eligibility for Federal Student Aid. A copy of this document is often required by a scholarship program.

General Education Development (GED) Certificate -- A certificate students receive if they've passed a specific, approved high school equivalency test. Students who don't have a high school diploma but who have a GED may still qualify for federal student aid. A school that admits students without a high school diploma must make a GED program in the vicinity of the school available to these students and must inform them about the program. Students who pass an approved ability-to-benefit (ATB) test may also be qualified. An applicant without a high school diploma or its recognized equivalent can be eligible for funds if he or she 1) passes an independently administered test, ATB, approved by the Department of Education and used for determining the student's ability to benefit from postsecondary education or 2) enrolls in a school that participates in a process that has been both prescribed by the state in which the school is located and approved by the Department.

Grants -- A type of financial aid award that does not have to be repaid. Grants are often made based on an applicant's financial need or Expected Family Contribution (EFC).

Half Time -- At schools measuring progress by credit hours and semesters, trimesters, or quarters, half-time enrollment is at least six semester hours or quarter hours per term. At schools measuring progress by credit hours but not using semesters, trimesters, or quarters, half-time enrollment is at least 12 semester hours or 18 quarter hours per year. At schools measuring progress by clock hours, half-time enrollment is at least 12 hours per week.

You must be attending school at least half time to be eligible to receive Direct or FFEL Program loans. Half-time enrollment is not a requirement to receive aid from the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study, and Federal Perkins Loan programs.

Independent Student -- Must meet one of the following conditions: twenty-four years of age or older; an orphan; a ward of the court; a veteran of the U.S. Armed Forces; is married; has a child; is a graduate or professional student; has serious family circumstances.

Need Analysis -- The process of analyzing the household and financial information on the student's financial aid application and calculating the amount the family can be expected to contribute to educational costs. For the federal student assistance programs, the need analysis system is defined by law and results in a number known as the Expected Family Contribution.

PLUS Loan -- A loan available through the Federal Family Education Loan (FFEL) Program or the William D. Ford Federal Direct Loan Program (Direct Loan or DL). A Stafford Loan is for parents.

Professional Judgement -- While the method for determining the student's need for federal student aid is defined in the law, it does give the financial aid administrator the flexibility to make individual adjustments based on the administrator's professional judgement. Professional judgement can be used in three areas. The aid administrator can choose to override the student's dependency status to make the student independent, can adjust the components of the student's costs of attendance, and can adjust the data elements used to calculate the student's Expected Family Contribution. These adjustments must be made on a case-by-case basis, and the reasons for the adjustment must be documented in the student's file.

Renewal FAFSA Application -- An application that simplifies the process of reapplying for financial aid. Some of the information from the student's previous year application is preprinted on the Renewal FAFSA application. Students do not have to enter new information if the preprinted information is still correct.

Satisfactory Academic Progress -- Some scholarships can be taken away if a student is not making measurable progress towards the completion of a course of study. In order to qualify for renewal scholarships, satisfactory academic progress must be maintained.

Scholarships -- A financial aid award that does not have to be repaid. Scholarships are generally made based on an applicant meeting certain eligibility criteria.

Stafford Loan -- A loan available through the Federal Family Education Loan (FFEL) Program or the William D. Ford Federal Direct Loan Program (Direct Loan or DL). A Stafford Loan is for students.

Student Aid Report (SAR) -- The federal "output document" printed by a FAFSA processor and mailed to the student. The SAR contains the family's financial and other information reported by the student on the financial aid application. The student's eligibility for aid is indicated by the EFC printed on the front of the SAR. Schools that participate in the Electronic Data Exchange and other services offered by the U.S. Department of Education can receive the information on the SAR through these services.

Subsidized Stafford Loan -- A need-based student loan. Interest that accrues on Subsidized Stafford loans while the student is in school (at least half time) is paid by the federal government on the student's behalf.

Transcript -- All classes taken and all grades received by a student. An official transcript is sent by the school with an original signature of a school official.

Unsubsidized Stafford Loan -- A   non-need based loan program, so students with no financial need can even qualify for this aid program. Interest that accrues on Unsubsidized loans must be paid by the borrower, even while he/she is in school. The borrower may make periodic payments (monthly or quarterly, depending on the lender's policy) or allow the interest to accrue throughout enrollment and have the interest "capitalized" (added to the loan's principle balance). While capitalization eliminates having to make payments while in school but increases the total cost of a loan.

Verification -- A procedure whereby the school checks the information the student reported on the financial aid application, usually by requesting a copy of the tax returns filed by the student, and if applicable, the student's spouse and parent(s). Many schools conduct their own form of verification. In addition, schools must verify students selected through the federal central processing system, following the procedures established by regulation. The FAFSA processor will print an asterisk next to the EFC (on the Student Aid Report) to identify students who have been selected for verification.