Commonly Used Financial Aid Terms

Commonly Used Financial Aid Terms

Adjusted Gross Income (AGI): all taxable income as reported on a US income tax return

Award Letter: a specific notification listing the amount of financial assistance offered to a student through financial aid programs to pay for education costs

Cost of Attendance: the total amount needed to cover educational expenses including tuition, fees, housing, food plan, books, supplies, transportation and personal expenses.

Default: the failure of a borrower to make an installment on a student when due or to meet other terms of the promissory note under circumstances where the Secretary of Education or the pertinent guarantee agency finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay.

Disbursement: the process by which financial aid funds are made available to student for use in meeting educational and related living expenses; funds may be applied to the student’s account or disbursed directly to the student.

Disclosure Statement: statement explaining specific terms and conditions of student loans, such as interest rates, loans, fees charged, gross amount borrowed, and so on—disclosure statements must accompany each loan disbursement and are provided by the lender.

Expected Family Contribution (EFC): the amount of the family’s resources (income and assets) that the federal financial aid formula deems is available to help pay for school.

Scholarship: a form of financial assistance which does not require repayment or employment and is usually made to students who demonstrate or show potential for distinction usually in academic performance at the institution.

Grant: a type of financial aid that does not have to be repaid, usually awarded on the basis of need.

Work-study: a federal or institutionally funded employment program that provides jobs for students needing to meet a portion of their education expenses.

Subsidized Loan: loans awarded on the basis of need, and borrowers are not charged any interest before repayment begins.

Unsubsidized Loan: loans awarded regardless of need, and borrowers are charged interest from the time the loan is disbursed until it is paid in full. Students must complete the FAFSA to be considered for this loan.

* UT Arlington Pre-College Planning Guide 2006-2007

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