Financial aid guide for students and parents

While applying for financial aid for paying college fees, one comes across many terms which sound as if they are from some foreign language. Either the terms are completely new or even if one has heard them, their meaning is unknown. Before opting for financial aid, it is important to properly understand the various terms and their meanings. It will help in taking better and well informed decisions.

Some of the commonly used terms in financial aid are–

• 401(k) – It is a type of retirement fund and can be used to borrow money to pay for children’s education.

• ACD – Anticipated Completion Date is the date when a student is expected to complete the program or course he is studying. It is also termed as Expected Graduation Date (EGD) or Anticipated Graduation Date (AGD).

• Aid Year (AY) – It represents a period that starts on the first day of the classes and ends on the last day of examination or classes. It is required for the purpose of federal aid.

• COA – Cost of Attendance is the total cost that would be incurred if the student goes to school. It is also called Cost of Education (COE) and covers tuition, fees, transportation, book allowances, room, board, supplies as well as personal expenses.

• Deferment – When a borrower is allowed to postpone the loan repayment, it is termed as deferment. In a subsidized loan, the interest payment in deferred period is done by government while in unsubsidized the borrower is responsible for the accrued interest.

• DL – Direct Loan Program is a student loan program of federal government where they provide loans to students and parents directly instead of getting it funded by private lenders.

• EFC – Expected Family Contribution determined by Federal Methodology need analysis formula and is the amount of money expected that a family would be able to pay for child’s education.

• Enrollment Status – It indicates the status of student whether he has enrolled for a course - full time (FT), less than halt time (LTH), half time (HT). It is also used to specify statuses like never enrolled (X), graduated (G), withdrawn (W) or leave of absence (LOA).

• FAFSA – Free Application for Federal Student Aid is a free form that needs to be filed before applying to need based aids and Pell Grants.

• FDSLP – In Federal Direct Student Loan Program, funds to students are provided to the students and their parent directly through the school by the government.

• FEFLP – Federal Family Education Loan Program are the loans guaranteed by state agencies or non-profit organizations and funded by private lenders.

• FM – Federal Need Analysis Methodology is a formula used to calculate the Expected Family Contribution (EFC).

• Forbearance – It is a period of time in which the borrower is allowed to reduce the amount of monthly payments or temporarily cease the monthly payments. The accrued interest remains the borrower’s responsibility.

• Grant – It is a financial aid that does not need repayment.

• Half Time (HT) – This enrollment status that indicates a student is carrying out more than half but less than full time of academic workload.

• Independent Student – Person who is – atleast 24 years old, graduate or professional student, married, an orphan, member of armed forces, a veteran, someone with legal dependents expect spouse or ward of the court.

• Less Than Half Time (LTH) – It indicates that the student is carrying out less than half of the academic workload.

• Need – Need is the difference between COA and EFC which is used o determine the student’s eligibility for federal student aid programs.

• Scholarship – It is a non repayable financial aid that is usually based on the merit or ability of the student.

• Work-study Programs – These are campus-based programs that provide part-time jobs for students who have a financial need.