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Sometimes the world of financial aid can seem confusing. Because of this, º¬Ð߲ݴ«Ã½ has assembled this list of different financial aid terms you may come across. This glossary is modified from the “º¬Ð߲ݴ«Ã½ Glossary” as seen on by Kay Peterson, Ph.D.
Academic Year
The period in which school is in session. For º¬Ð߲ݴ«Ã½, the period is typically late August through early May.
Accrual Date
The date on which interest charges on an education loan begin to accrue.
Assets
Cash in checking and savings accounts, virtual currencies, trusts, stocks, bonds, other securities, real estate (excluding primary residence), income-producing property, business equipment, and business inventory.
Associate Degree
A two-year college degree.
Award Letter
See º¬Ð߲ݴ«Ã½ Offer
Bachelor’s Degree
A four-year college degree.
Budget
The estimated cost of attendance for a student at an institution. Used to determine the amount of financial aid. Typically includes tuition, fees, books, supplies, room and board, personal expenses, and transportation.
Campus-Based Programs
U.S. Department of Education federal student aid programs administered by colleges and universities. Includes Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study.
Commuter Student
A student who lives off-campus and commutes to school.
Consolidation Loan
Loan that allows the borrower to lower their monthly payments by combining their original loans into one loan. Consolidation loans typically have longer repayment periods and greater interest accrual. Borrower benefits may be affected.
Co-signer
Individual who assumes responsibility for a loan if the borrow fails to repay. Students are typically required to have a co-signer when they are applying for a student loan (non-federal loans) from a bank.
Cost of Attendance
See budget.
Default
Failure to repay or otherwise meet the terms and conditions of a loan. Default typically occurs after six months of delinquent payments. Penalties include a bad credit rating, loss of future financial aid eligibility, withholding of tax refunds, garnishing of wages, and loss of monthly payment options.
Deferment
Period during which the repayment of a loan is suspended because the borrower meets certain eligibility requirements (e.g. enrolled in college at least half-time).
Delinquency
Failure to make a scheduled loan payment.
Dependency Status
Status that determines if parental information is required on the Free Application for Federal Student Aid (FAFSA). There are two statuses:
- Dependent Students: required to provide parental information on the FAFSA.
- Independent Students: not required to provide parental information on the FAFSA.
Dependency status is determined by several questions on the FAFSA.
You are considered Dependent if you answer "No" to all the questions. You are considered Independent if you can answer "Yes" to at least one of the questions. for the list of questions.
Disbursement
The process by which financial funds are made available to students for use in meeting educational expenses. Funds are applied directly to the student’s account, although some funds may be disbursed directly to the student (i.e. Washington State Aid).
For º¬Ð߲ݴ«Ã½, a student’s financial aid is credited to their account in equal disbursements per semester after all of their documentation has been submitted and reviewed. The amount disbursed each semester is indicated on your º¬Ð߲ݴ«Ã½ Offer Letter. For example, a $1,000 grant will be disbursed $500 for Fall Semester and $500 for Spring Semester.
Enrollment Status
Enrollment status is determined by how many credits you are enrolled in each term. The amount you are eligible for in financial aid is determined by the number of credits for which you are enrolled. Typically, students must be enrolled at least half-time to qualify for federal student loans.
FAFSA
See Free Application for Federal Student Aid.
FAFSA Processing System (FPS)
The computer system that receives the student's Free Application for Federal Student Aid. The FAFSA Processing System performs database matches and calculates the official Student Aid Index (SAI) and sends out the FAFSA Submission Summary (FSS).
FAFSA Submission Summary
The official report sent to the student after submitting the FAFSA. It contains your SAI and other important FAFSA information. We encourage reading thoroughly to see if a correction is needed to the FAFSA (in addition to looking for NU communications regarding your FAFSA).
Federal Direct Loan
Federally guaranteed, low-interest rate loan for students (compared to market rates). There are two types of Federal Direct Loans: subsidized (need-based) and unsubsidized (non need-based). Both types allow deferment of payments until a student leaves school.
Federal Direct PLUS Loans (Parent Loans for Undergraduate Students)
Federal loans available to parents of dependent students to help finance their child’s education. Parents may borrow up to the difference between the cost of attendance and the financial aid their child is already receiving.
Federal Methodology
The need analysis formula used to determine the Student Aid Index (SAI). The Federal Methodology considers taxable and nontaxable income and assets, family size, and the number of family members in college.
Federal Pell Grant
Federal grant program for undergraduate students who demonstrate financial need according to the Free Application for Federal Student Aid (FAFSA).
Federal Processor
The Federal Processor is the organization that processes the information submitted on the Free Application for Federal Student Aid (FAFSA) and uses it to compute eligibility for federal student aid.
Federal Supplemental Educational Opportunity Grant (FSEOG)
This is a federal grant for students with exceptional financial need as determined by the Free Application for Federal Student Aid (FAFSA) and the university.
Federal Work-Study (FWS)
Federally-sponsored work-study program is designed to incentivize employers to hire undergraduate and graduate students part-time during the school year. Eligibility is based on financial need. These employment opportunities would be on- or off-campus for º¬Ð߲ݴ«Ã½. Part or all of the work-study award is paid directly to the employer. The student would be paid for their work by the employer directly.
º¬Ð߲ݴ«Ã½ Administrator
Also referred to as a student financial services counselor. University employee responsible for preparing and communicating information about student loans, grants, scholarships, and employment programs to students and agencies.
º¬Ð߲ݴ«Ã½ Offer
Official offer from the financial aid office of the college that lists all of the financial aid for which the student is eligible. The amounts listed in the letter are subject to change based on eligibility.
º¬Ð߲ݴ«Ã½ Package
The total amount of financial aid a student receives, including grants, loans, and work-study. The financial aid package is reported to the student on the financial aid offer.
Financial Need
The difference between the student’s educational costs and the Student Aid Index (SAI).
Fixed Interest Loans
Interest rate stays the same throughout life of the loan (e.g. Stafford Loan).
Forbearance
The approved temporary suspension of loan payments due to a financial hardship (interest continues to accrue). The lender grants forbearance. A forbearance status can affect your credit score.
Free Application for Federal Student Aid (FAFSA)
The federal application used to apply for most forms of financial aid. .
Gift Aid
Grants and scholarships that do not need to be repaid if earned.
Grace Period
The period after a student either graduates or leaves school and before loan payments must begin (typically six to nine months).
Grant
Financial aid that does not have to be repaid if earned and is typically based on financial need.
Guarantee Fee
A percentage of the loan that is paid to the guarantor to insure the loan against default. The fee is usually 1% of the loan amount.
Guarantor
A state agency or private nonprofit organization that insures the loan against default with the guarantee fee.
Income Contingent Repayment
Payments where the size of the monthly payments depends on the income earned by the borrower. As the borrower’s income increases, so do the payments.
Master Promissory Note
A legally binding contract a student signs for the Federal Direct Loans. This promissory note only needs to be signed once at the attending college or university and can be used to request additional Federal Direct Loans for up to 10 years. The promissory note details the terms of the loan and obligates the borrower to repay.
Merit-Based Aid
Financial aid based on academic, artistic, athletic, or other merit-oriented criteria. This financial aid is not need-based.
Needs Analysis
The process used by a college to evaluate an applicant’s financial resources and determine how much the student or family can pay toward the cost of the education.
Net Price Calculator
Our Net Price Calculator can be used for estimating on-campus undergraduate costs.
Packaging
When a financial aid administrator combines various types of student aid (grants, loans, scholarships, and employment) to help meet a student’s financial need.
Parent Contributor
Determine if your parent is a contributor by using this table:
Parents’ Contribution
A quantitative estimate of the parents’ ability to contribute to postsecondary educational expenses.
Principal
The amount borrowed or owed on a loan.
Professional Judgment
For need-based federal aid programs, financial aid administrators can adjust the available income of the family, the cost of attendance, or change the dependency status (with documentation) when extenuating circumstances exist.
º¬Ð߲ݴ«Ã½ recognizes that an individual student may be facing extenuating circumstances such as a change of employment (reduction in pay, decrease in hours, or loss of employment), medical expenses not covered by insurance, tuition paid for a family member attending a private school (K-12), or emergency situations. Please communicate your special circumstance to Student Financial Services. A form can be sent to document the special circumstances and we will determine if any additional aid is available.
Promissory Note
A legally binding contract a student signs before receiving loan funds. The promissory note needs to be signed for each loan requested. The promissory note details the terms of the loan and obligates the borrower to repay.
Satisfactory Academic Progress (SAP)
A school’s policy concerning the minimum number of courses that must be completed each semester, the maximum time frame, and the minimum GPA required to receive financial aid.
Scholarship
A form of financial assistance that does not need to be repaid. Scholarships are generally offered to students who show potential for distinction or who possess certain characteristics important to the scholarship provider (such as academic performance, talent, hobbies, ethnicity, etc.).
Servicer
An organization that is paid by a lender to administer their student loan portfolio.
Student Aid Index (SAI)
Your Student Aid Index (SAI) is a formula-based index number ranging from –1500 to 999999. Where your SAI falls within the SAI range helps your school determine how much financial support you may need. A negative SAI indicates you have a higher financial need.
Title IV Programs
Federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended. Includes Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, Federal Perkins Loan, Federal Stafford (Subsidized and Unsubsidized) Loan, and Federal PLUS Loan.
Undergraduate Student
A student who has not yet received a bachelor’s degree.
Unmet Need
The difference between a student’s total cost of attendance at a specific institution and the student’s total available resources, including financial aid.
Verification
The review process in which the financial aid administrator requests documentation from the family to verify the accuracy of the data on the Free Application for Federal Student Aid. Students are randomly selected for verification by the Department of Education. The verification process must be completed prior to receiving financial aid.
For º¬Ð߲ݴ«Ã½, if you are selected for verification, any additional documentation that is needed will be communicated to you through your º¬Ð߲ݴ«Ã½ Offer Letter. After all documents have been submitted and reviewed, any corrections to the data will be submitted to the Department of Education (if need be). A revised º¬Ð߲ݴ«Ã½ Offer Letter will be sent to you notifying you of the completion of verification and if there are specific actions needed. Your offer(s) will not be disbursed, and Federal Stafford Loans will not be originated until verification is complete.
Washington State Work Study
Washington State Work Study provides undergraduate and graduate students with school-year part-time employment. Eligibility is based on financial need. These employment opportunities are on- and off-campus for º¬Ð߲ݴ«Ã½.
Withdrawal
When an enrolled student either ceases attending certain courses or ceases attending all courses.
Work-Study
An employment program designed to facilitate part-time work. Read more about the work-study-program.