Financial Aid Glossary

Assets. The amount a family has in savings and investments. This includes savings and checking accounts, a business, a farm or other real estate, and stocks, bonds, and trust funds. Cars are not considered assets, nor are such possessions as stamp collections or jewelry. The net value of the principal home is counted as an asset by some colleges in determining their own awards but is not included in the calculation for eligibility for federal funds.

Citizenship/Eligibility for Aid. To be eligible to receive federally funded college aid, a student must be one of the following:

A United States citizen;
A non-citizen national;
A permanent resident with an I-151 or I-551 without conditions;
A participant in a suspension of deportation case pending before Congress; or
A holder of an I-94 showing one of the following designations:

Individuals in the U.S. on an F1 or F2 visa or on a J1 or J2 exchange visa cannot get federal aid.

Cooperative Education. A program offered by many colleges in which students alternate periods of enrollment with periods of employment, usually paid, and that can lengthen the usual baccalaureate program to five years.

Expected Family Contribution (EFC) or Parental Contribution. A figure determined by a congressionally mandated formula that indicates how much of a family’s resources should be considered "available" for college expenses. Factors such as taxable and nontaxable income and the value of family assets are taken into account to determine a family’s financial strength. Allowances for maintaining a family and future financial needs are then taken into consideration before determining how much a family should be able to put toward the cost of college.

Independent Student. A student who reports only his or her own income (and that of a spouse, if relevant) when applying for federal financial aid. Students who will be 24 or older by December 31, 2006, will automatically be considered "independent" for 2006-2007. Students who are under 24 will be considered independent if they are:

Married as of the date of filing the FAFSA.
The supporter of a legal dependent other than a spouse.
A veteran of the U.S. Armed Forces.
An orphan or ward of the court.
Classified as independent by a college’s financial aid administrator because of other unusual circumstances.
A graduate or professional student.
Currently serving on active duty in the Armed Forces for other than training purposes.

Merit-Based Aid. Any form of financial aid awarded on the basis of personal achievement or individual characteristics without reference to financial need.

Subsidized Loan. A load for which the borrower is not responsible for all of the interest payments. While enrolled at least half-time, this loan does not accrue interest. For Subsidized Federal Stafford and/or Direct Loans, the government pays interest to the lender on behalf of the borrower while the student is in college and during approved grace periods.