Financial Aid Glossary
Alternative Loans. Student loans provided by private lenders - not the federal government. The lender determines the interest rate and repayment terms.
Award Letter. A document issued from the college financial aid office to a student indicating the type and amount of financial aid the college will award.
Campus-Based Aid. Financial assistance for students and their families administered by a college. Funds, regardless of their source, are awarded to students by the college's financial aid office, and not by a state, federal, or private agency.
College Fair. A free public event featuring regional and/or national college representatives and financial aid sessions.
College Funding Estimator. An online calculator from EducationQuest that estimates FAFSA results.
Cost of Education. The cost of attending college for one year. This includes tuition/fees, room/board, books, transportation and personal expenses.
Default. Failure to repay a loan according to the terms agreed to at the time of application. Default may also result from failure to submit requests for deferment on time. Default status is recorded on your permanent credit record. Students in default are not eligible for financial aid.
Deferment. A period of time during which you are not required to make payments on an outstanding student loan.
Dependent Student. A student who does not meet the criteria of an independent student.
Direct Loan. A group of federal loan programs for which the lender is the federal government. Included in these programs are government-subsidized loans for students and unsubsidized loans for both students and parents.
Educational Planning Program. Similar to a College Fair, this free public event - typically held at a high school - features regional and/or statewide college representatives.
Endowment. Funds held in reserve to finance operations for the college or other institution.
Expected Family Contribution (EFC). Determined by the FAFSA, this is the amount a family is expected to contribute toward their student's college expenses.
FAFSA. The Free Application for Federal Student Aid (FAFSA) is the required application to apply for any type of federal financial aid including grants, work-study and student loans.
FAFSA priority filing date. The recommended date set by colleges by which students should file the FAFSA to receive the maximum amount of funds.
FAFSA verification. After receiving a student's FAFSA results, a college might request that the student submit copies of income tax and W-2 documents to verify the results.
Federal Education Loan Programs. A group of federal loan programs for which the lender is a bank, savings and loan, credit union, or other private organization. Included in these programs are government-subsidized loans for students and unsubsidized loans for both students and parents.
Financial Aid Package. The type and amount of financial aid a student can expect from the college. This can include a combination of scholarships, grants, work-study and student loans.
Financial Aid Program. Presentations that describe types of financial aid and how to apply. The programs are offered at high schools, College Fairs, Educational Planning Programs and community agencies.
Financial Need. The maximum amount the college may award in need-based federal financial aid according to the following standard calculation.
| Cost of Education |
| – Expected Family Contribution (FAFSA results) |
| = Financial Need |
529 Savings Plans. A state-operated investment plan that gives families a federal tax-free way to save money for college. Officially known as qualified tuition programs (QTPs). The 529 plan in Nebraska is the College Savings Plan of Nebraska.
Grant. A type of financial aid that doesn't have to be repaid. Grants are based on financial need and may come from the federal government, state government or the college.
Guaranty Agency (Guarantor). State agency or private nonprofit institution that insures student loans and administers the Federal Family Education Loan Program for the federal government. Nebraska's designated guarantor is the National Student Loan Program.
Guarantee fee. A fee charged by the guarantee agency that insures your loan. The fee may be up to one percent of the loan amount and is withheld from your loan check.
Independent Students
Students whose parents' finances are not taken into account by colleges. To be considered independent, a student must:
- be at least 24 years old by December 31 of the award year covered by the FAFSA; or
- be a graduate or professional student; or
- be married; or
- have legal dependents other than a spouse; or
- be an orphan or ward of the court; or
- be a veteran of the U.S. armed forces; or
- be otherwise identified as independent by the financial aid administrator.
Master Promissory Note. A legally binding contract between a student and the lender that includes all the terms and conditions under which the student promises to repay your loan.
Origination fee. An administrative fee (up to three percent) deducted from each disbursement of your student loan.
Pell Grant. The largest federal grant awarded to undergraduate students based on financial need.
Perkins Loan. A 5% loan funded by the government but awarded by colleges to both undergraduate and graduate students.
PIN. A personal identification number used as a student and/or parent electronic signature when submitting, or making corrections to, the Free Application for Federal Student Aid (FAFSA).
PLUS Loan. An unsubsidized loan program for parents of undergraduate students. Graduate and professional students may also borrow the PLUS loan.
Scholarship or Grant. A type of financial aid that doesn't have to be repaid. Scholarships may be based on need, or other criteria such as academic achievement, artistic ability, or talent in the performing arts.
Stafford Loan. Federal Education Loan Program for students. Stafford Loans can be either government-subsidized, in which case the government pays any interest while the borrower is attending college, or unsubsidized, in which case interest begins to accrue when the loan is made.
Student Aid Report (SAR). The federal report generated from filing or updating your FAFSA. The SAR summarizes your FAFSA information and provides the Expected Family Contribution amount. The SAR is either mailed to you or provided online via a secure web link.
Subsidized Stafford Loan. A need-based federal student loan in which the government pays interest while the borrower is attending college, in the grace period or deferment.
Supplemental Educational Opportunity Grant (SEOG). Awarded by colleges, this grant goes to the neediest undergraduate students as determined by the federal need analysis formula.
Tuition Tax Credits. Allow you to subtract, on a dollar-for-dollar basis, the amount of the credit from your total federal income tax bill.
Unsubsidized Stafford Loan. A federal student loan in which the borrower is responsible for paying all accrued interest.
Work-study. A federally funded program in which students take campus jobs as part of their financial aid package. To participate in a work-study program, students must complete the FAFSA.