We use cookies to personalize and improve your browsing experience. 

To learn more about how we store and use this data, visit our privacy policy here.

FAFSA Processor

An organization contracted by the Department of Education to provide the means for a student to apply for federal student aid. The FAFSA processor electronically enters the student’s FAFSA data into a computer system and then transmits the data to the Central Processing System.

Federal Family Education Loan (FFEL) Program

The collective name for the Federal Stafford (subsidized and unsubsidized), Federal PLUS Loan, and Federal Consolidated Loan programs. Funds for these programs are provided by private lenders and the loans are guaranteed by the federal government.

Federal Need-Analysis Methodology

A standardized method for determining a student’s ability to pay for postsecondary education expenses; also referred to as Federal Methodology (FM). The Federal Methodology is applied to the information on your FAFSA to derive the EFC.

Federal Pell Grant Program

This is a federally sponsored and administered program that provides “free money” in the form of grants to undergraduate students based on need. Congress resets the appropriation limits annually. You do not have to repay Pell grants.

Federal Perkins Loan Program

This federally run program is based on need and is administered by a college’s student financial aid office. It offers low-interest loans for undergraduate study and you do not have to start repaying them until after you graduate.

Federal Stafford Loan

This is an additional federal program based on need that allows you to borrow money for educational expenses directly from banks and other lending institutions, or sometimes from colleges themselves. These loans may be either subsidized or unsubsidized. Repayment begins six months after your course load drops to less than halftime status. You must repay these loans within ten years.

Federal Supplemental Educational Opportunity Grant (FSEOG)

This campus-based program provides grants to undergraduate students of exceptional need who have not completed their first bachelor’s degree and who need help to pursue their education. Priority is given to Federal Pell Grant recipients with the lowest EFC.

Federal Work-Study Program (FSW)

This is a federally financed program that arranges for you to combine employment and college study. Your employment experience may be an integral part of the academic program (as in cooperative education or internships), or just simply a means of paying for college.

Financial Aid

This general term describes any source of monetary assistance from outside of the student’s family. These funds are generally awarded on the basis of need and include scholarships, grants, loans, and employment.

Financial Aid Administrator

An individual who is responsible for preparing and communicating information pertaining to student loans, grants or scholarships, and employment programs, as well as for advising, awarding, reporting, counseling, and supervising office functions related to financial aid information. He/she is a manager or administrator who interprets and implements federal, state, and institutional policies and regulations, and is capable of analyzing student and employee needs, making changes where necessary.

Financial Aid Award

An award is an offer of financial or in-kind assistance to a student attending a postsecondary educational institution. This award may be in the form of one or more of the following types of financial aid for college: repayable loan, a non-repayable grant and/or scholarship, and/or student employment.

Financial Aid Consultant

A person who, for a fee, provides a variety of services to students, including preparing the FAFSA and other forms, estimating the Expected Family Contribution (EFC), and estimating financial need.

Financial Aid Notification

The letter from the postsecondary institution notifies a student whether aid has been awarded. The notification will also describe the student financial aid package, if any. State agencies and private organizations may send notifications separately from the school.

Financial Aid Package

An award to a student comprised of loans, grants and/or scholarships, and employment. Students are customarily notified of their aid package in an award letter.

Financial Aid Transcript (FAT)

This provides a student’s financial aid history at previously attended schools, in order to monitor certain aspects of eligibility. This information is reported on the SAR and ISIR, or electronically through the National Student Loan Data System (NSLDS). In some cases, a school may require you to obtain a paper FAT.

Financial Need

Need is the difference between a school’s cost and a family’s ability to pay. The latter is represented by the Expected Family Contribution (EFC) for federal need-based aid and for many state and institutional programs.

Financial Need Equation

Cost of attendance, minus Expected Family Contribution, equals financial need (COA – EFC = Need). The determination of need is central to the entire aid application process.


This is a temporary cessation of loan repayment, extension of time for making loan payments, or acceptance of smaller loan payments than were previously scheduled. A borrower applies to the loan servicer for forbearance and it is granted at their discretion.

Foreign Student

In reference to financial aid information, a student owing allegiance to a country other than the U.S. Foreign students are not eligible for basic federal aid programs, although there are categories of non-U.S. citizens who are eligible for student aid.

Free Application for Federal Student Aid (FAFSA)

This is the federal government’s instrument for calculating need-based aid. It’s available from your high school guidance department, college financial aid offices, and online at www.fafsa.ed.gov. You should complete the form and mail it as soon after January 2 as possible.

Full-Time Student

In general, one who is taking a minimum of 12 semester or quarter hours per academic term; 24 semester or 36 quarter hours per year at institutions using credits but not terms; or 24 clock hours per week at institutions that measure progress in clock hours.


The difference between the amount of your student financial aid package and your cost of attending a college or university is referred to as the gap. You and your family are expected to fill this.

Gift Aid

Gift aid includes educational funds such as grants or scholarships that do not require repayment. Gift aid can be awarded on the basis of financial need, academic merit, or a combination of both.

Grace Period

The period that begins when a loan recipient ceases to be enrolled at least half-time and ends when repayment starts. Principal need not be paid and, generally, interest does not accrue. For most FFEL Program and Direct Loans the grace period is six months after the student ceases to be a half-time student.


Many of these are usually awards dispensed by the student financial aid offices of colleges and universities and may be based on need or merit — although most are need-based. Merit-based awards are awarded based on excellence in academics, leadership, volunteerism, athletic ability, or some other outstanding special talent.

Health and Human Services, U.S. Department of (HHS)

This division of the federal government provides assistance to future health care practitioners. The Nursing Student Loan, Health Profession Student Loan, and Scholarships for Disadvantaged Students Program are among those administered by HHS.

Health Professions Programs

These federal assistance programs, administered by the U.S. Department of Health and Human Services, provide scholarships and loans to students pursuing careers in the health sciences.

Health Professions Student Loan (HPSL)

This is a long-term, low-interest loan program for students in the health professions. Repayment begins one year after the student is no longer enrolled full-time.

Hope Scholarship

This federal tax credit for higher education expenses allows deductions on a per-student basis for the freshman and sophomore years of postsecondary education.


Money received from any or all of the following: wages, interest, dividends, sales or rental of property or services, business or farm profits, certain welfare programs, and subsistence allowances such as taxable and non-taxable social security benefits and child support.

Income-Protection Allowance

An allowance against income for the basic cost of maintaining family members in the home, based upon consumption and other cost estimates of the Bureau of Labor Statistics, for lower-income families

Independent Student

You’re independent if you report only your income (and that of a spouse, if relevant) when applying for federal student aid. Students who will be 24 or older by December 31 of the school year will be considered independent. Students who are under 24 will be considered independent if they are:

  • Married as of the date of filing the FAFSA
  • The supporter of a legal dependent other than a spouse
  • A veteran of the U.S. Armed Forces
  • An orphan or ward of the court
  • Classified as independent by a college’s financial aid administrator because of other unusual circumstances
  • A graduate or professional student

Institutional Costs

These are charges for tuition, fees, school-owned room and board, and other expenses, by the institution.

Institutional Student Information Record (ISIR)

Information that a school receives by participating in the electronic data-exchange process with the FAFSA Central Processor, containing the results of a student’s FAFSA, whether it was filed on paper or electronically. It is the electronic version of the SAR.

Investment Plans

These are educational savings programs, usually sponsored by commercial banking institutions and having varying federal and state tax implications.

Legal Dependent

This is a biological or adopted child, or a person for whom the applicant has been appointed legal guardian and provides more than half support. May also be a person who lives with and receives at least half support from the applicant and will continue to receive that support during the award year.

Legal Resident

This is a person who has met state or local requirements for being declared a resident, though it may also refer to an individual who is not a U.S. citizen, but is still eligible for federal financial aid for college.

Lifetime Learning Tax Credit

This is a federal tax credit for higher education expenses. Rather than allowing deductions on a per-student basis, as with the Hope Scholarship Credit, the Lifetime Learning Credit is used on tax-return basis and covers a more expansive timeframe and array of educational courses.


An advance of funds that is evidenced by a promissory note requiring the recipient to repay the specified amount(s) under prescribed conditions.

Loan Repayment Program

This special program is available to qualified students who have attended college on federal student loans and then enlist in the Army, for at least three years, in a job specialty.

Merit awards, merit-based scholarships

More “free” money, these awards are based on excellence in academics, leadership, volunteerism, athletic ability, and other areas determined by the various granting organizations and schools. They are not based on financial need.

Military Scholarships

Reserve Officer Training Corps (ROTC) scholarships are available for the Army, Navy, and Air Force at many colleges and universities throughout the United States. These scholarships cover tuition and fees, as well as books and supplies, and include a subsistence allowance.

Montgomery GI Bill

A program to help military personnel pay for postsecondary education, sometimes called the New GI Bill. These benefits are available only for undergraduate study and are payable for up to thirty-six months.