Financial Aid Terms
Learn the meaning of terms commonly used in the financial aid process.
- A period of time schools use to measure a quantity of study. At UCSD, the academic year consists of a fall, winter, and spring quarter, during which a student must complete a total of 36 units. Academic years vary from school to school and even from educational program to educational program at the same school.
- The maximum amount a student can have outstanding under a certain loan program.
- The maximum amount a student can borrow from a certain loan program in a given academic year.
- Elements of a student's personal and family financial worth; includes real estate other than a primary residence, stocks, bonds, cash savings, and college savings plans, but generally not a family farm, retirement, or prepaid tuition assets.
- A letter notifying a financial aid applicant of the types and amounts of aid being offered, responsibilities, and the terms and conditions of each award.
- An award letter provided via the Web. At UCSD, undergraduate students receive Web award notifications by using the Financial Aid tool on TritonLink.
- A person who agrees to repay money received, plus interest, according to the terms of a promissory note she/ he has signed.
- The estimated educational costs for the academic year, also called cost of attendance; usually includes tuition and fees, as well as allowances for books and supplies, transportation, room and board, personal expenses, health insurance or allowance, and loan fees.
- The three federal programs administered by colleges and universities: Perkins Loan, Federal Supplemental Educational Opportunity Grant (SEOG), and Federal Work-Study.
- When interest is added to the principal balance of a loan rather than being paid as it accrues. Any future interest is then based on the higher loan amount (the combined total of principal and accrued interest).
citizen/ eligible non-citizen
- Adding any interest that accrues to the principal balance of the loan (instead of repaying it immediately). See capitalization above.
- A U.S. citizen, a U.S. national (includes natives of American Samoa and Swain's Island), or a U.S. permanent resident who has an I-151, I-551, or I-551C (Alien Registration Receipt Card); or a student who has an Arrival-Departure Record (I-94) from the INS with one of the following designations: Refugee; Asylum Granted; Indefinite Parole and/ or Humanitarian Parole; Cuban-Haitian Entrant (Status Pending); or Conditional Entrant (valid only if issued before April 1, 1980).
- Students who have only a Notice to Apply for Permanent Residence (I-171 or I-464) are not eligible for federal student aid.
- Students in the U.S. on an F1 or F2 student visa only, J1 or J2 exchange visitor visa only, or with a G series visa, are also not eligible for federal student aid.
cost of attendance
- A person who assumes joint responsibility with the primary borrower for repaying a loan. Federal student loans do not require a co-signer, but many private/ alternative loans do.
- The estimated educational costs for the academic year, also called budget; usually includes tuition and fees, as well as allowances for books and supplies, transportation, room and board, personal expenses, health insurance or allowance, and loan fees.
- A status your loan enters when you fail to make payments according to the terms of your promissory note; defaults are reported to credit bureaus and can influence your future credit and ability to receive financial aid.
- A postponement in repaying your loan; must be applied for with your lender, and is not available for loans in default status.
- A student under 24 years old who doesn't qualify as an independent student by federal guidelines and whose parental income and asset information is used in calculating her or his expected family contribution. Dependent students must include parental information on the FAFSA to be considered for financial aid.
- Loans (subsidized and unsubsidized Stafford loans, PLUS loans, and consolidation loans) offered under the William D. Ford Federal Direct Loan Program, where the federal government acts as the lender and guarantor. UCSD does not participate in the Direct Loan Program, but instead participates in the Federal Family Education Loan Program (FFELP).
- The transfer of funds from either the lender to the school, or from the school to the student.
- A notice which a lender must send to a borrower before disbursing funds, summarizing loans pending disbursement.
expected family contribution (EFC)
- The portion of the student's personal and/or family financial resources that should be available to help pay educational costs, based on the federal methodology. The EFC is calculated using the information provided on the FAFSA.
FAFSA on the Web
- The electronic version of the Free Application for Federal Student Aid (FAFSA) that allows student financial aid applicants to complete and file their annual federal financial aid applications online. Read more about FAFSA, or visit FAFSA online.
- The federal formula, defined by Congress, which is used to determine the expected family contribution (EFC) for student financial aid applicants.
- The federal government's computer system that analyzes FAFSA information, calculates the expected family contribution (EFC), and sends out the Student Aid Report (SAR); also called Central Processing Service (CPS).
financial aid eligibility
- Funding provided by the federal and state governments and by the college to assist students with their educational expenses. Private and corporate funding options may also be available.
financial aid package
- The difference between a student's expected family contribution (EFC) and the college's budget (cost of attendance); also known as financial need.
fixed (interest rate)
- The total amount of financial aid, usually a combination of grants, scholarships, loans, and employment opportunities offered a student to meet the cost of attendance.
- An interest rate on a loan that stays the same for the life of the loan. The Perkins loan has a fixed interest rate.
Free Application for Federal Student Aid (FAFSA)
- When a lender allows the borrower to temporarily postpone repaying the principal, usually because of economic hardship. Interest continues to accrue, even on subsidized loans. Must be applied for with the lender; not permitted for loans in default.
- The form used to apply for federal student financial aid, including grants, loans, and work-study. In addition, most states and schools also use this application form to award non-federal student financial aid. Completing the FAFSA is the first step in the financial aid process. It can be completed on the Web. Read more about FAFSA, or visit FAFSA online.
- Grants and scholarships which are neither earned nor require repayment. (Compare to self-help aid.)
- Grade point average (GPA) is the average of a student's grades, generally where grades have been converted to a 4.0 scale.
- The short time period after graduation (or dropping below half-time enrollment status) during which the borrower isn't required to begin repaying her or his loan: that's 6 months for Stafford loans, 9 months for Perkins loans. There is no grace period for PLUS loans.
- Grants are gift aid (financial aid that does not require repayment). There are federal, state, and university grants.
- A promise to pay a debt if the borrower fails; the government or guaranty agency guarantees/ insures federal loans.
- A non-profit organization that guarantees that if a borrower defaults, it will pay on the loan.
- The agency that insures loans made under the Federal Family Education Loan Program against default.
- A student who is 24 years old or older, or who is not 24 but both parents are deceased, a ward/ dependent of the court, a veteran, married, a graduate or professional student, has legal dependents other than a spouse, or has special circumstances (see the FAFSA for exact requirements). Compare with dependent student.
- The fee charged to borrowers by lenders for using loan money.
- Provides money to a borrower upon mutually agreeable eligibility and repayment provisions.
- Self-help aid, financial aid that must be repaid; available under varying terms and conditions.
master promissory note
- One promissory note that covers all loans made by the same lender to the same borrower for the same loan program.
- Financial aid that depends on your personal and/or family financial situation; most government sources of financial aid are need-based.
- Personal identification number; provided by the U.S. Department of Education, the PIN serves as your e-signature on the electronic FAFSA. Both students and parents can obtain a PIN. Apply online at www.pin.ed.gov.
- A legally binding contract between a borrower and lender listing all terms and conditions of a loan.
satisfactory academic progress (SAP)
- The progress a student must maintain toward a degree or certificate to receive and remain eligible for financial aid; the school's written standard of satisfactory academic progress. Read UCSD's Satisfactory Academic Progress guidelines for undergraduates and graduate students.
Selective Service Registration
- Gift-aid, financial aid that does not require repayment; awarded on the basis of merit, academic excellence, and in some cases, additional criteria such as study in a particular major, leadership, study abroad, or financial need.
- If required by law, a student must register, or arrange to register, with the Selective Service to receive federal student aid; applies to males born on or after January 1, 1960, who are at least 18 years old, citizens or eligible non-citizens, and not currently on active duty in the Armed Forces. (Students can register online at www.sss.gov.)
student aid report (SAR)
- Loans that must be repaid and work-study funds that must be earned. Compare to gift aid.
- The report summarizing information provided on the Federal Application for Federal Student Aid (FAFSA); produced and sent to student financial aid applicants by the Federal Processor/Central Processing Service (CPS).
- All income received that is NOT reported to the IRS or is reported, but not taxed; may include Social Security benefits, Earned Income Credit, welfare payments, untaxed capital gains, interest on tax-free bonds, military allowances, and others.
- The procedure in which a college checks or verifies the information reported on the FAFSA, usually by requesting a copy of the parent's and/or the student's signed tax return.
- A person who served on active duty in the U.S. Armed Forces and was released under an honorable condition, or who will be a veteran by June 30, 2007; or who attended a service academy and was released under a condition other than dishonorable (see the FAFSA for more details).
- Self-help aid, a federal- or state-subsidized student employment program.