Need a refresher course in "Financial Aid 101?" We've got you monetarily covered!

Financial Aid Lingo You'll Want to Know
By Feona Sharhran Huff
August 2001

The CollegeBound Network NewsClick -- Now that school is just a few weeks away (gosh... summer break went by that fast?!), you'll have to quickly get your brain back in academic mode with vocabulary, math equations, scientific formulas, and historical facts. And, if you hope to receive money to help fund your education, you'll also need to learn lots of financial aid lingo, the types of aid, and how these dollar deals are determined.

Thanks to Patrick L. Bellanoni and his book, College Aid Made Easy (Ten Speed Press), you won't have any problems understanding your college money matters. Here's some lingo to learn:

Free Application for Federal Student Aid (FAFSA): If you expect to get any type of financial aid, you must first fill out this application. It's used to determine whether you're eligible for aid and how much you will receive.

Student Aid Report (SAR): You should receive this report no later than four weeks after filing your FAFSA. It recaps all the information indicated on your FAFSA, shows how much money you and your family are expected to contribute to your education (EFC -- see next entry), and states whether or not you're eligible for the Pell Grant, or other federal aid programs.

Expected Family Contribution (EFC): The dollar amount you and your family are expected to put toward your college education.

Financial Aid Package: This is the total amount of money you're going to receive for school, from possible grants to loans to federal work-study.

Merit-Based Aid: You don't have to pay this aid back, and it's usually based on academics, athletics, or extra curricular excellence.

Scholarships: Gift aid given to students who demonstrate or show potential for excellence in a variety of areas, including academics, athletics, religion, school-based, and field of study.

Federal Work-Study: Need-based financial aid program that allows you to work on campus. The money is paid directly to you.

Self-Help: Financial aid provided by loans (which have to be paid back to the lender) and work-study earnings.

Federal Subsidized Stafford Loan: A low-interest, need-based loan for undergraduate and graduate students. Interest doesn't begin accruing on the loan until after you graduate.

Promissory Note: A binding legal document you sign when you accept a loan. It lists the conditions under which you're borrowing and the terms under which you agree to pay back the loan.