Glossary of Financial Aid Terms
Free Application for Federal Student Aid (FAFSA) – The initial application for federal student aid which includes Pell Grant, student and parent loans, work study, and need based aid. This application is located at www.fafsa.ed.gov. To complete and submit this application you will need your prior year’s federal tax information, asset information, social security numbers, and FSA ID.
FSA ID – The FSA ID is comprised of a user name and password that can be used to log in to certain Federal Student Aid websites, including the FAFSA website. If you are a parent and need to electronically sign your child's FAFSA, you will need your own FSA ID. To create an FSA ID, visit www.fafsa.ed.gov and click the FSA ID tab at the top of the page.
Student Aid Report (SAR) – Notification sent to students with their information entered on the FAFSA and the calculated expected family contribution.
Expected Family Contribution (EFC) – A students EFC is how much the federal government believes you can pay for one year of college based off the information submitted on the FAFSA. However, the formula used does not consider debt or expenses. This actual amount paid could be different depending on eligible financial aid received.
Financial Aid Package – Is the eligible sources of financial aid being offered to assist in paying for college cost. This could include federal, state, institutional, or outside/private aid.
Financial Aid Estimate Award Letter – This letter lists missing documents needed to complete your financial aid file for the processing of eligible financial aid. It will also list possible eligible financial aid.
Financial Aid Award Letter – This letter lists all sources of financial aid for which the student has applied. Aid does not need to be accepted, and students may choose to decline aid. For example, if a student does not wish to accept a student loan, the loan may be declined.
Cost of Attendance (COA) – Student financial aid cannot be awarded above the COA. The COA consists of tuition, fees, room, board, books and supplies, transportation, and miscellaneous expenses.
Net Price – Net price is the out of pocket cost. It is the difference between the COA and financial aid. It is the amount owed to the college by the student.
Grants and Scholarships – Money that does not have to be paid back. Awarded based off merit, talent, religion, ethnicity, hobbies/interests, major, etc.
Federal Educational Rights and Privacy Act (FERPA) – Federal law that protects the privacy of student records. Only students will have access to their educational information unless they give written permission listing others that may receive information.
Satisfactory Academic Progress (SAP) – All colleges and universities are required by law to define and enforce standards of academic progress.
Loans are funds that must be paid back, usually with interest. There are federal student loans, federal parent loans, and private or alternative loans.
Education Tax Benefits are available to you and your parents when you file your federal income tax returns based on amounts you paid for college. The most popular education tax benefits are the Hope Scholarship tax credit, Lifetime Learning tax credit and the student loan interest deduction.