College Finance Terms

 Here is a list of common terms used in regard to college financing and financial aid.

Also available:

 

1)      Academic Scholarship – Also known as a merit-based scholarship, this is awarded on the basis of academic achievement such as grades and test scores.

 

2)      Athletic Scholarship – Awarded based on athletic ability and taking into consideration the needs of an individual school’s athletic program. NCAA Division I, II and III scholarships are extremely competitive and typically only awarded to the most highly skilled athletes.

 

3)      Award Letter – A document provided to the student that details the type and amount of financial aid he or she is to receive.

 

4)      Campus-Based Aid – Financial aid which is administered by the college a student attends rather than by any private or government agency.

 

5)      Corporate Scholarship – A scholarship awarded by a company to support the community, promote careers in the company’s area of specialization or provide a benefit to the children of company employees.

 

6)      Cost of Attendance – The total amount a student will need to attend college, including tuition, books, supplies, fees, room and board, transportation and miscellaneous personal expenses.

 

7)      CSS/Financial Aid PROFILE® – A financial aid form provided by the College Board and required by approximately 10 percent of U.S. colleges, including many of the most highly selective ones.

 

8)      Demonstrated Need – The difference between a family’s expected contribution and the cost of attending a college.

 

9)      Expected Family Contribution (EFC) – The amount of money a family could be expected to pay towards a year’s worth of college costs, calculated by analyzing the data included on the FAFSA.

 

10)   FAFSA – The Free Application for Federal Student Aid, a form produced by the U.S. Department of Education and used to determine a student’s eligibility to receive financial aid.

 

11)   Fees – Costs associated with extracurricular activities and other non-academic expenses such as special events, clubs and athletics.

 

12)   Financial Aid Package – The total amount of financial aid provided to a student, including grants, loans and work-study programs.

 

13)   Grant – A monetary award usually based on financial need, provided by a government agency, foundation, non-profit agency or academic institution. A grant does not need to be repaid.

 

14)   Institutional Grant – A need-based grant administered directly by the college a student is attending.

 

15)   Institutional Loan – A loan administered by a college or university using its own funds rather than those provided by the government.

 

16)   Loan – A type of financial aid provided to the student or to his or her parents. Student loans must be repaid, but in most cases the payments do not begin until after the student has graduated.

 

17)   Merit-Based Grant – A monetary award provided primarily on the basis of academic achievement and extracurricular involvement, although financial need is also taken into consideration.

 

18)   National Merit Scholarship – A scholarship awarded on the basis of how well a student scores on the PSAT/NMSQT as well as his or her grades, extracurricular involvement, letters of recommendation and a personal essay. About 8,000 such scholarships are awarded annually to finalists in each state.

 

19)   Need-Based Grant – A grant offered as part of the total financial aid package to a student whose family is unable to pay for the total cost of tuition.

 

20)   Need-Blind Admission – A policy under which all applicants are given equal consideration regardless of whether or not they will require financial aid.

 

21)   Pell Grant – A type of grant administered by the federal government and provided to students whose FAFSA reports indicate a high degree of financial need.

 

22)   Perkins Loan – A loan administered by the federal government and based on demonstrated need as evidenced by a student’s FAFSA report. The interest on a Perkins loan does not start accruing until after the student has graduated.

 

23)   PLUS Loan – The federally-administered Parent Loan for Undergraduate Students, a program in which parents regardless of income can borrow up to the entire cost of their child’s tuition minus any other financial aid received.

 

24)   Preferential Packaging – A policy by which colleges offer the best financial aid packages to the most desirable applicants.

 

25)   Private Organization Scholarship – A scholarship provided by a church, non-profit agency, business, labor union, school district, chamber of commerce, or any type of organization other than a government agency or college.

 

26)   Qualified Tuition Program/529 Savings Plan – A state-operated program which allows families to save for college without being taxed on the interest earned.

 

27)   Residency Requirement – Length of time a student and/or his or her family must reside in a state before becoming eligible to pay in-state tuition and receive state financial aid.

 

28)   Scholarship – Money awarded to a student to cover all or part of the cost of attending college. Scholarship monies do not need to be repaid.

 

29)   Stafford Loan – A loan provided by the federal government used to supplement family and personal resources and any scholarships, grants and work-study programs. The Stafford loan has a higher interest rate and a shorter repayment period than the Perkins loan.

 

30)   Subsidized Loan – A need-based loan with interest paid by the government.

 

31)  Tuition – The amount paid by a student in order to attend classes at a college or university. Does not include books or other materials or living expenses.

 

32)  Tuition Tax Credits – These allow the cost of tuition to be subtracted from a student’s or family’s total federal income tax.

 

33)  William Ford Direct Loan Program – A loan administered by the U.S. Department of Education.

 

34)  Work-Study/Cooperative Work Study – A federally-funded program which allows students to take on-campus jobs as a part of a financial aid package. In a cooperative work-study program, the student will alternate between attending classes and working full-time in a field related to his major. Students in such a program will typically take 5 years to complete a bachelor’s degree.

Looking for more information?

Check out our College Admissions Glossary and College Application Glossary. 

If you have any questions about a term that is not included in these guides, please drop us an email at info@admit2college.net or fill out this form.