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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
Additional reporting by Krista Michelle Arrigo
July/August 2003
The CollegeBound Network NewsClick -- Back-to-school
days will be here before you know it and you'll
be chattin' up new vocab words, math equations,
scientific formulas, and history facts. Aside
from all that new lit language, you'll need to
learn lots of financial aid lingo as well. But
that should be easy once you check out Patrick
L. Bellanoni's book, College Aid Made Easy
(Ten Speed Press, 1998). Here's a bit of what
it explains:
Free Application for Federal Student Aid (FAFSA):
If you expect to get any type of financial aid,
you must first fill out this application. FAFSA
determines whether you're eligible for aid or
not, and if you are, how much you'll receive.
These apps are available after January 1st of
your senior year, and you'll need to complete
one every year thereafter.
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 definition), and states
whether or not you're eligible for the Pell Grant,
or other federal aid programs.
Expected
Family Contribution (EFC): This is the dollar
amount you and your family are expected to put
toward your college education. This figure is
calculated by subtracting the amount of your family's
resources considered "available" to
pay for college costs (estimated by a federal
methodology).
Financial
Aid Package: This is the total amount of money
you're going to receive for each particular school
to which you apply, from possible grants and 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 extracurricular excellence.
Scholarships:
Gift aid given to students who demonstrate potential
for excellence in academics, athletics, religion,
their school, or future field of study. Awards
can be merit-based, need-based, or a combination
of both.
Federal
Work-Study: Need-based financial aid program
that allows you to work on campus. The money is
paid directly to you in the form of a paycheck.
Self-Help:
Financial aid provided by loans, which must 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, as the government
foots the bill.
Federal
Unsubsidized Stafford Loan: The same as subsidized
except that interest begins accruing as soon as
the loan is disbursed. Meaning, it all adds up
from day one.
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.
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