Financial Aid Glossary

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  • Who makes PLUS loans? The federal government makes PLUS loans directly. Many banks, lenders, and nonprofits also make PLUS loans. Ask your college financial aid officer what kind of choice you have. Do not feel constrained to limiting your choice to lenders the school may prefer or recommend, however.
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    Pell grant

    A federal grant awarded to all needy college students.

    • How big of a Pell grant can you receive? In the fall of 2008, the maximum Pell grant will be $4,731.
    • How do you get a Pell grant? Students must fill out a Free Application for Federal Student Aid. Students with an Expected Family Contribution of $0 can receive the maximum Pell grant. Those with higher EFCs get smaller grants. Those with EFCs above about $4,200 will be disqualified. Ninety percent of all Pell grants go to students whose families have incomes of less than about $40,000 a year.
    • How do you collect your Pell grant? Pell grants are usually paid directly to your college, which uses the money to pay off any tuition, fees, room, board, or other bills you may owe the school. If there is any money left over, the school will forward it to you.
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      Perkins

      In 2007, this is the federal government's lowest-cost student loan. For the U.S. Department of Education's official information, click here or see Page 11 of the 2007 guide.

      • How much can you borrow from the Perkins program? Your school will decide how much you qualify for, but no student can borrow more than $4,000 a year through the Perkins program. The average Perkins loan is $1,948.
      • How much do Perkins loans cost? There are no fees, and schools cannot charge more than 5 percent interest.
      • How do you get a Perkins loan? A student must fill out a Free Application for Federal Student Aid, or FAFSA. Generally, Perkins loans are awarded only to students who are found to be very needy and have very low Expected Family Contributions (EFCs). The most recent figures show that the EFC of the average Perkins recipient was $3,628.
      • Who makes Perkins loans? Although these loans are guaranteed and partially funded by the federal government, the loans are made by colleges, which have to put up some of the money themselves. This makes Perkins loans different from federally guaranteed Stafford and PLUS loans, which can be made directly by the federal government or by middlemen such as banks and other lenders.
      • How do you collect your Perkins loan? Perkins loans are usually paid directly to your college, which uses the money to pay off any tuition, fees, room, board, or other bills you may owe the school. If there is any money left over, the school will forward it to you.
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        PJR

        Professional Judgment Review. Although the federal government initially calculates how much a student can afford to pay for college (the Expected Family Contribution) based on the information provided in the FAFSA, each college's financial aid office is free to apply its "professional judgment" to adjust the EFC (and thus the student's financial need and aid award) based on additional information. So if you feel the EFC you receive from the federal government in your Student Aid Report is unreasonably high, you should contact your college's financial aid office and ask for a "Professional Judgment Review." You'll need to prove that the EFC is unreasonably high with, for example, receipts showing large medical expenditures, evidence that a family member has recently lost a job, or evidence of other legitimate expenses that were not taken into account on the FAFSA. Proof that you or your family have no money for college because of vacation bills or other fun spending will not win much sympathy, since aid officers believe that education is a more important investment than Jacuzzis. See also appeal. [Back to Top]

        PLUS

        Who makes PLUS loans? The federal government makes PLUS loans directly. Many banks, lenders, and nonprofits also make PLUS loans. If your school allows you to shop, do not llimit your choice to lenders the school may prefer or recommend. You can check out cheap nonprofit lenders here, or use our web shopping tool. [Back to Top]



        Updated 7/24/08