Financial aid terms you should know

Financial aid terms you should know

FAFSA: Free Application for Federal Student Aid, required for any student seeking federal financial aid, including federal grants, federally backed student and parent loans, and federal work-study. Applying for federal student aid is free, as is help completing the FAFSA, if needed. To complete the FAFSA, you will need information from your family’s federal tax forms for the current and previous years.

Student Aid Report (SAR): A summary of the information you provided on the FAFSA. Schools that receive your SAR will use this information to deter­mine your eligibility for financial aid.

Expected Family Contribution (EFC): An amount that is used to determine your eligibility for aid, based on information provided on the FAFSA. Savings, loans, prepaid college accounts, and outside scholar­ships are among the sources that families may use to pay the balance between the cost of attendance and offered financial aid.

Cost of Attendance (COA): The total amount it will cost to attend a school, usually expressed as a yearly figure, including tuition and fees; room and board (or a housing and food allowance for off-campus students); allowances for books, supplies, loan fees, and transportation; and miscellaneous and personal expenses.

Financial Need: Cost of attendance minus expected family contribution. The school uses federal and other aid to help meet your financial need. A school may not fully meet your financial need.

Award Letter: A letter from a school detailing a student’s financial aid package, noting the type and amount of aid the school is willing to offer if the stu­dent accepts admission and registers for classes.

Financial Aid Package: The total amount of financial aid (federal and nonfederal) that a student is offered by the school. A financial aid package may fall short of what a student needs to meet the full cost of atten­dance. Federal student aid is affected by other sources of aid (scholarships, state aid, etc.).

Promissory Note: A legally binding document that a student must sign for a federal student loan. The note lists terms and conditions of the loan, interest rate, how interest is calculated, and deferment and cancel­lation provisions.

CSS Profile: An additional financial aid application required by some private colleges and universities. The CSS Profile requires a fee and is administered by College Board.