Applying for financial aid? You probably have some questions about what all those terms mean. Here are your answers.Award letter: Official document that breaks down all financial aid by amount, source and type of aid. You may either accept or decline each source of aid. Campus-based aid: Financial aid administered by the university. The federal government gives the college or university a fixed annual allocation of funds to disperse to eligible students.Default: If a borrower is 120 days late on payments on a private loan or 270 days late on a federal loan, they are considered to be in default. At that point, actions may be taken against them to collect the money.Deferment: Borrowers may apply for permission to postpone repaying the loan during a specified deferment period. The federal government will pay the interest charges for a subsidized loan during the deferment period, but with an unsubsidized loan you are responsible for payments that accrue during the deferment period. Entitlement programs: Funds are given to a qualified applicant for a set amount regardless of what school he or she attends. The best-known example is the Pell Grant. Expected Family Contribution: Estimate of the amount the student (and/or parents) should be able to pay toward expenses. It is in the form of a number between 0 and 99,999; the lower the number, the higher the financial aid amount. Free Application for Federal Student Aid: FAFSA is a unified application administered by the federal government to administer financial aid. Used to apply for Pell Grants and other need-based aid.Grant: Financial aid that you do not have to pay back. Grants are given by the federal or state government based on financial need.Independent: A student at least 24 years of age as of Jan. 1 of the academic year, who is either: married, a graduate or professional student, an orphan or ward of the court, a veteran of the U.S. Armed Forces or in charge of a legal dependent.Need: Most government financial aid is need-based. It is calculated by subtracting expected family contribution from the cost of attendance at the school.Pell grant: Federal grant to eligible undergraduates that provides funds of up to $5,550 for both the 2010-11 and 2011-12 award years. It is based on financial need and does not have to be repaid. Scholarship: Funding offered by government agencies, schools and nonprofit organizations that does not need to be paid back. State Student Incentive Grants: SSIG is a financial aid program for state residents. The state-run program receives matching funds from the federal government to help with the funding.Student Aid Report: SAR is a report that summarizes what is included in the FAFSA and must be given to the school’s financial aid office. You should receive a copy four to six weeks after filing the FAFSA; it will indicate Pell grant eligibility and the Expected Family Contribution. Keep a copy for your records.Supplemental Education Opportunity Grant: An?SEOG?is given to students with exceptional need; this grant of up to $4,000 per year is given to students who qualify for Pell grants. TEACH Grant: The Teacher Education Assistance for College and Higher Education Grant is for students who plan to teach in schools that serve low-income students in a high-need field. Students must agree to teach full-time for at least four years.Yellow Ribbon program: Provides additional benefits to veterans who are eligible at the 100% benefit level of the Post 9/11 GI Bill. An approved school will contribute half of the amount needed above what the GI Bill covers, and the Veterans Administration will match the school’s contribution.Read the full dictionary online at EducationOption.com.
