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Dictionary of Financial Aid Terms|Student Financial Aid

How are you at languages? Financial aid has a language all of its own. Unfortunately, you're going to need to learn it if you want to participate in the many benefits financial aid can offer. Fortunately, you've now got a dictionary.

Academic Year: The school year, normally comprised of the fall and spring semesters. The summer term is a separate period, not included in the academic year. You should always apply for financial aid for the academic year and, if you decide to attend summer school, you must apply separately for aid for summer.

Appeal: The process of explaining your situation in greater detail, in order to receive additional funds, or to restore your eligibility for funds.

Audit Hours: Classes for which the student pays but for which s/he will not get a letter grade. Audit classes are normally taken to enrich the student's understanding of an area; homework and tests are frequently not required. Audited classes do not count toward the student's enrollment status for financial aid purposes.

Budget: (or Student Budget) see Cost of Attendance.

Bulletin (or Catalog): A publication which describes the college's policies which apply in the year the student begins his/her college studies. It also lists the programs (majors) available, the courses offered, and often, the physical facilities, faculty members, administrators and other individuals associated with the college.

Campus-Based Programs: The Federal Perkins Loan, the Federal Supplemental Educational Opportunity Grant, and the Federal Work-Study programs. These three programs are called "campus-based" because the funds are allocated in a lump sum to each college or "campus" and administered directly by the school's financial aid office, which awards these funds to applicants using federal guidelines.

Capitalization: The process of adding unpaid interest to the principal balance of an education loan, thereby increasing the total amount to be repaid eventually. The alternative to capitalization is to pay the interest monthly or quarterly, as it accrues.

Catalog: See Bulletin

Central Processing System (CPS): The U.S. Department of Education's facility for processing application data. The CPS receives a student and parent's information, calculates the student's Expected Family Contribution (EFC), and sends the student the Student Aid Report (SAR).

Consolidation: A means of combining several loans, or types of loans, in order to make the monthly payments easier to handle.

Corrections: Revisions to data provided on the FAFSA. Corrections can usually be brought or sent to the college financial aid office, where they will be posted to the student's financial aid record and transmitted to the Federal Processor, if necessary. Corrections can also be mailed directly back to the Federal Processor. All corrections must be signed and many colleges require corroborating documentation.

Cost of Attendance: The total amount it should cost a student (living frugally) to go to school, usually expressed as a one-year amount. The Cost of Attendance covers tuition and fees, on-campus room and board, an allowance for books, an average amount for transportation to and from school twice a year, and an amount for personal expenses (for toothpaste, entertainment, laundry, etc.) This is sometimes called the student's "budget."

Credit balance check: A check issued by UW to the student for any financial aid remaining after the student's UW charges have been paid. Once a student has completed the registration process, an account is created for that student at UW. This account tracks the financial transactions between the student and UW. When a student receives financial aid, the aid is deposited to this account. Charges are placed on this same account for tuition, fees, housing, parking permits, library fines, etc. By Trustee regulation, any financial aid deposited to the account will first pay tuition and fees and then room and board for UW residence halls. With the student's permission, other charges may also be paid. At least twice a week, any remaining positive balance (called a "credit balance") is delivered by U.S. Mail to the student's local address as a check made payable to the student.

Credit Hours: The value of a course, normally expressed in numbers of class meeting hours per week. A biology class might be worth four credit hours because of the lab that goes with it, whereas an English class might be valued at three credit hours. A full-time undergraduate student is expected to enroll for at least 12 credit hours each semester.

Data Release Number (DRN): This is found on the Student Aid Report (SAR) and is intended to be used as a Personal Identification Number (PIN) when the student wishes to revise or release FAFSA data.

Default: Failure to repay a student loan according to the terms agreed to, when you signed a promissory note. If you default, your credit can be adversely affected, your wages and/or tax refunds can be garnished, and you will lose your eligibility for future federal aid until you remedy the problem.

Deferment: An authorized period of time during which a borrower may postpone principal and interest payments on a loan, such as when the borrower is enrolled in college at least half-time.

Disbursement: The release of loan funds from the lender to the school, for delivery to the student. Disbursements are usually made in two equal parts. Usually, disbursements are made electronically, directly into an account set up for the student by the school. The school will notify the student if the loan disbursement is being handled that way. The disbursement date is not the date the school sends funds to the student, but the date the lender sends the funds to the school, on the student's behalf.

Entrance Interview: This is a counseling session in which borrowers are required to participate before receiving their first student loan. Please go to https://studentloans.gov/ for more information on Federal Direct Lending loan counseling.

Expected Family Contribution (EFC): An amount, determined by a Congressional formula, that indicates how much of your family's financial resources should be available to help pay for school for one year. The EFC is subtracted from the Cost of Attendance and the difference is called your "need." It is that amount that the school tries to offer you in financial aid.

FAFSA (Free Application for Federal Student Aid): The federal aid application used by every college which offers federal aid. A four-page form, it is accompanied by several pages of instructions and is available December through the following academic year. When complete, it is sent by the applicant to the Central Processing System for analysis.

Federal Family Educational Loan Program (FFELP): The "umbrella" name for student loans provided by private lenders and guaranteed by the federal government. In this program are the Stafford (subsidized and unsubsidized) and the Parent (PLUS) Loans. As of Summer 2010 the University of Wyoming will no longer be participating in this program.

Federal Pell Grant: A non-repayable award to undergraduate students whose families demonstrate need according to the federal formula. Normally targeted to the neediest applicants, this grant is available at any accredited college in the country, as long as the college's requirements are met. There is no deadline for application but the earlier the application, the better the student and his/her family can plan for the remaining expenses of college.

Federal Perkins Loan: A federally governed education loan made from the college's own funds, consisting of repayments from previous Perkins borrowers and, sometimes, new capital from the US Department of Education. Available to graduate and undergraduate students with need, as long as funds remain. Repaid after graduation or termination of studies, at a minimum of $40 per month, directly to the college which provided the loan.

Federal Processor: see Central Processing System

Federal School Code: The six-digit code requested on the FAFSA which tells the Federal Processor to which college(s) the applicant wants his/her data sent. A maximum of six institutional codes can be filled in. After that, one code must be removed in order to add another one. Additions of codes can be done either on the SAR or by the new school. UW's Federal School Code is 003932.

Federal Supplemental Educational Opportunity Grant (FSEOG): A non-repayable award offered only to Pell Grant recipients, that is, the neediest applicants. One of the "campus-based" aid programs, this grant is in short supply at most colleges so only those Pell recipients with low EFCs are offered FSEOG.

Federal Work-Study Program (FWS): A program of part-time employment on campus designed to enable students to earn part of their college expenses. Eligibility is based on the applicant's financial need and work hours are arranged so as not to interfere with the student's academic program. Community-service employment opportunities are also available. The employee is usually paid once a month and is expected to use earnings for education-related expenses.

Financial Aid Administrator (FAA): A professional representative of the college's financial aid office, who reviews students' eligibility and awards aid. The FAA spends much time advising students and their parents about the availability of aid, how eligibility is determined, and how to make financial aid last for an entire academic year!

Financial Aid Package: The total financial aid a student receives from a college. Aid, such as grants, loans, work-study and scholarships, is combined into a "package" to help meet the student's need and address individual circumstances as much as possible. It is always wise to review the package offered by each college, to determine who has made the "best" offer, in terms of grant/loan ratio, total dollars, percent of cost met, and so on.

Financial Need: The difference between the Cost of Attendance and the Estimated Family Contribution. This amount is the student's total eligibility for aid from all sources, and is used in determining the student's aid package.

Full-Time Enrollment: Usually 12 credit hours or more per semester, for undergraduate, law, and pharmacy students, and 9 credit hours for graduate students. At most schools, however, 30 credit hours are required for sophomore status, so simply taking 12 credit hours each semester of the freshman year is not enough to progress to sophomore status for the second year of college. Students who aim to graduate after only four years of school must take more than 12 credit hours each semester.

Grace Period: The period between when a borrower leaves college and when loan payments begin. The grace period for a Federal Direct Loan is six months; for a Perkins Loan, it is nine months.

Graduate Student: A student who has received a bachelor's degree from a college and is seeking an advanced degree, normally a master's degree or a Ph.D.

Grant: A non-repayable, "free" form of financial assistance, often based on need.

Guarantee Agency: A private entity under contract to the federal government to guarantee lenders that the student loans they lend will be repaid. With this guarantee, lenders are willing to make loans to students without requiring collateral or a good credit rating. The federal government sets loan limits and interest rates for the Federal Family Educational Loan Program (FFELP) but each state has a guaranty agency which may set additional limitations, within federal guidelines. The guaranty agency is a good source of information on Stafford and PLUS loans. Wyoming's guaranty agency is USA Funds, (800)742-9659.  As of summer 2010 the University of Wyoming will no longer participate in the Federal Family Educational Loan program. The Federal Direct loan program does not use a Guarantee Agency.

Half-Time Enrollment: Normally, for undergraduate, law, and pharmacy students half-time enrollment is a credit hour load of between 6.0 and 11.5 hours in a semester. For graduate students, it is a credit hour load of between 4.5 and 8.5 hours in a semester.

Independent Status: A status peculiar to the US financial aid system, met by being 24 years old or more during the year for which the aid is awarded, or being married, or a veteran, or an orphan or ward of the court, or a graduate student. A student who provides more than half the support of a dependent may also be considered independent, with appropriate documentation.

In-School Status: Enrollment for six or more credit hours (4.5 or more for graduate students) at an accredited post-secondary institution. Students who maintain their in-school status do not have to begin repayment of their education loans. The summer term is not counted; that is, there is no requirement to enroll in summer school in order to maintain in-school status.

Institutional Application: A financial aid application form required by the college itself. This form normally asks questions not requested on the FAFSA form. It is obtained from and submitted back to the college itself and there is often a priority deadline for submission.

Interest: A fee charged for the use of borrowed money. Interest is calculated as a percentage of the principal loan amount. The rate may be constant throughout the life of the loan (fixed rate, as in the Federal Perkins Loan), or it may change at specified times (variable rate, as in the Federal Direct and Federal Direct PLUS loans). All student loans for education carry simple, annual interest.

Lender: A financial institution, such as a bank or credit union, which provides the funds for students and parents to borrow educational loans in the FFELP program. Some schools are also lenders.

Leveraging Educational Assistance Program (LEAP): A federal grant matched by state funds.

Loan: A form of assistance which must be repaid.

National Student Loan Database System (NSLDS): The NSLDS is a central database maintained by the U.S. Department of Education, which shows loan and grant amounts received by students.

Need Analysis: The process of reviewing a student's aid application (FAFSA) to determine the amount the family could be expected to contribute. This is done by the Federal Processor.

New Borrower: A borrower who has no outstanding/unpaid student loan balance on the date s/he applies for an educational loan. The Federal Direct program has in the past, had different requirements for new borrowers than for students who have an outstanding balance.

Overaward: Generally, any amount of campus-based aid or Federal Direct student loan which exceeds the student's financial need. (The overaward concept does not apply to the Federal Pell Grant).

Package: See Financial Aid Package

Payment Date: One of many terms used by colleges to indicate the date by which tuition and fees for the semester (or the year) must be completely paid, otherwise the student is considered not to be enrolled.

Pell Grant: See Federal Pell Grant.

Perkins Loan: See Federal Perkins Loan.

PIN: Meaning Personal Identification Number, this term refers to a private numeric code assigned to you so you alone can access or change personal data. The Federal Processor will assign you a PIN so you can complete or revise the FAFSA electronically.

Principal: The amount borrowed. Interest is charged on this amount, and origination and guarantee fees may be deducted from it prior to disbursement of a loan.

Promissory Note: The legal document borrowers sign to receive a loan. It lists the conditions under which the money is borrowed and the terms under which the borrower agrees to repay the loan with interest. Borrowers should keep a copy of the promissory notes until the loans have been fully repaid.

Proration: A term referring to the reduction of a financial aid award, either because of less than full-time enrollment (in the case of a Pell Grant) or because the student will attend less than a full academic year, due to graduation at the end of the fall term (in the case of a Federal Direct Loan).

Remaining Eligibility: See Unmet Need

Repayment Schedule: A document which discloses the borrower's monthly payment, interest rate, total repayment obligation, due dates and length of time for repaying the loan.

Resources: Other student aid which must be taken into consideration to prevent an overaward in the campus-based programs and Federal Direct loan programs. For example, a scholarship would be considered a resource.

Satisfactory Academic Progress: A college's published standard of what is expected of the student academically, as s/he moves, or progresses, toward the degree objective. These standards vary among colleges, but all colleges require that the student have a minimum average of "C" at the end of the second year if federal aid is to be offered after that. In addition, all colleges measure the rate at which progress toward the degree is made, so that students cannot make the college campus their permanent home and finance it with federal aid.

Scholarship: A non-repayable form of assistance, given in recognition of academic excellence or of skill in a particular field. Financial need may or may not be a criterion in scholarship selection, but it is usually not the primary one.

SEOG: See Federal Supplemental Educational Opportunity Grant.

Student Aid Report (SAR): A set of forms sent to the FAFSA filer by the Central Processing System. The SAR shows the data submitted by the family and displays the Expected Family Contribution, based on the need analysis performed on the data. SARs should be reviewed for accuracy by the student; data which need revision should be marked on the SAR and presented to the financial aid office for submission to the Central Processing System. If parent data have been provided, a parent must sign any corrections. If no corrections need to be made, the student may keep the SAR.

Subsidized Loan: A loan based on the borrower's calculated financial need. Interest is paid to the lender by the federal government during the in-school, grace and deferment periods. The interest payments are thought of as a subsidy to the lender, as they replace interest that the borrower him/herself would pay.

Undergraduate: A college student who is working toward the bachelor's degree.

Unmet Need: The amount of need that remains after all federal and other assistance has been offered to the applicant. Also called "remaining eligibility," since the student would be eligible for that much more, if other funds were to become available.

Unsubsidized Loan: A loan not based on the borrower's need. No interest subsidy is paid to the lender by the federal government. Therefore, the borrower is responsible for interest from the date the loan is disbursed. See Capitalization.

Work-Study: See Federal Work-Study Program.

WyoWeb: The world wide web connection to UW's student information and records system. With appropriate username and password, a student may use WyoWeb to access his/her information contained in UW's student records system. This information includes admission status, on-line registration for classes, class schedule listing, financial aid information, and student accounts status. More options will be available in the future.

Verification: A process of review to determine the accuracy of the information on a student's financial aid application. Students are selected by the Central Processing System, but the verification process is carried out by the school(s). Approximately one third of all FAFSA filers are selected for verification, and most federal funds are not disbursed to the student selected for verification until the process has been completed.

 

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