Paying for college glossary
Academic Competitiveness grant: New in 2006–07, this will provide up to $750 for first-year students who graduated from high school after Jan. 1, 2006, and up to $1,300 for second-year students who graduated from high school after Jan. 1, 2005. Recipients must be eligible for a Pell grant and meet certain academic requirements.
Bursar: The campus office where student tuition and fee payments are made.
Cost of attendance: The sum of a student's tuition, fees, room, board, books, supplies, transportation, loan fees, and miscellaneous expenses.
CSS/Financial Aid Profile: Colleges use this information collected by the College Board to award nonfederal student aid funds. Students are charged a nonrefundable registration fee of $5 plus $18 for each college or scholarship program to which information is sent, unless they qualify for a fee waiver.
Direct loans: Students and parents borrow directly from the federal government at participating schools, instead of having the paperwork handled by private companies.
Expected family contribution (EFC): This amount indicates how much money the government estimates a student and family can afford to contribute toward the year's college costs. Income, assets, benefits, family size, and the number of family members in college are figured into the EFC. Most schools leave a "gap" or "unmet need" between the EFC and the student's aid award.
Federal Family Education Loan Program (FFELP): This program allows students and parents to shop around among companies and nonprofits for the best loan deals. Many of these organizations offer significant interest-rate reductions and will waive some fees.
Financial aid package: The total financial aid a student is offered by the school, usually in a so-called award letter.
Free Application for Federal Student Aid (FAFSA): This form must be filled out for students to get federal financial assistance such as grants, loans, and work-study jobs. For the 2006–07 school year, it may be submitted between Jan. 1, 2006, and June 30, 2007, but some forms of aid are first come, first served. So, the sooner the student applies, the better.
Grants: These do not have to be repaid.
Loans: These have to be repaid.
National Science and Mathematics Access to Retain Talent (SMART) grant: New in the 2006–07 academic year, this will provide up to $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Pell grant and are majoring in the physical, life, or computer sciences, mathematics, technology, engineering, or a foreign language considered critical to national security. The student must maintain a cumulative grade-point average of at least 3.0 in coursework required for the major.
Pell grants: A student's expected family contribution (EFC) must be below $3,850 for the 2006–07 award year to receive a maximum possible award of $4,050. The exact amount depends on financial need, school costs, and the student's full-time or part-time status. In most cases, Pell grants are awarded to undergraduate students who have not yet earned a degree. All students eligible for the Pell grant will receive the full amount they qualify for.
Perkins loans: These have a fixed interest rate of 5 percent for a maximum of $4,000 for undergraduates and $6,000 for graduate and professional students. Payment is owed to the school that made the loan. Funds are limited and first come, first served.
PLUS loans: Parents of dependent undergraduate students and, starting in fall 2006, graduate students can borrow up to the entire cost of attendance, less other aid. Loans made before June 30 will vary with treasury rates. Congress set a higher fixed rate for all loans made after July 1, 2006.
Promissory note: Students must sign this binding legal document to get a loan. It lists the conditions for borrowing and the terms under which the loan is to be repaid.
Stafford loans: These are the most popular and common federally guaranteed student loans. Interest rates on loans made before June 30, 2006, will vary with treasury rates. But starting July 1, 2006, all new Staffords will charge 6.8 percent. For the 2006–07 academic year, most freshmen will be limited to $2,625. Sophomores won't be able to borrow more than $3,500, and upperclassmen are limited to $5,500. (Students can borrow more if they are independent of their parents or their parents have been turned down for a PLUS loan.) The loan money must first be applied to pay for tuition, fees, room, board, and other school charges. If money remains, the student will receive the funds by check or in cash. The maximum total debt from Stafford loans for a dependent undergraduate student is $23,000.
Student aid report: This shows a student's FAFSA entries and expected family contribution (EFC). It should be reviewed carefully to make sure that it is complete and accurate.
Subsidized loans: The U.S. Department of Education pays the interest on such loans while the borrower is in school and during grace and deferment periods.
Supplemental Educational Opportunity Grant (SEOG): Pell grant recipients receive priority for SEOG awards that range from $100 to $4,000 per year, with students with the lowest EFCs getting them first. Receiving other aid might reduce the amount. Each school receives a limited amount of SEOG funds. Not everyone who qualifies gets one, so applying early gives students the greatest likelihood of getting funds.
Unmet need: The difference between a college's total cost of attendance and the sum of the expected family contribution (EFC) and the aid award.
Unsubsidized loans: The interest on these loans accrues while the student is in school, but payments can be deferred until the student leaves school.
Work-study: These federally subsidized jobs are usually on campus but may also be at a private, nonprofit organization or public agency working in the public interest, or at a private, for-profit employer relevant to a student's course of study.