College Loan Evaluator

American College Testing (ACT): A need analysis service located in Iowa, responsible for processing the FAFSA form, commonly known as the Free Application for Federal Student Aid. ACT is also responsible for administering the ACT scholastic exam.

Academic Year (AY): Officially, a fiscal year runs from July 1 through June 30 and usually consists of either semesters or quarters.

Accrued Interest: Interest that accumulates on loans and must be paid back at a later date.

Adjusted Gross Income (AGI): The income figure taken from the IRS income tax forms and required on the various financial aid applications.

Award Letter: The official means of notifying financial aid applicants of the assistance being offered. The award letter shows the types and amounts of aid offered as well as specific program information, student responsibilities, and the conditions that govern the award. It also provides students with the opportunity to accept or decline the aid offered.

Award Year: The student receives aid from July 1 through June 30 of the following year.

College Scholarship Service (CSS): Need analysis service, located in Princeton, NJ, which distributes the Financial Aid PROFILE, a financial aid form used mostly by selective private colleges. CSS also administers the SAT scholastic exam.

Cost of Attendance: The total of all costs a financial aid office estimates students will incur during attendance at the college or university.

Default: When a borrower fails to make payments on a loan, or has failed to comply with other terms of the loan agreement.

Dependent Student: A student, under the age of 24, who is at least partially dependent on his parents to provide support. The parents’ income and assets are assessed in determining the expected family contribution.

Deferred: Contractually suspending the payment of a loan until a later period of time. However, the interest will accrue (build up) and be added to the total repayment.

Deferment: A temporary period during which a borrower is not required to make payments. Deferments are more common in Federal loan programs rather than alternative loans.
For Subsidized Stafford Loan borrowers (and Perkins Loan borrowers), many deferments are subsidized, meaning the interest that accrues on the loan during the deferment is paid by the federal government. Some deferments are unsubsidized, meaning the borrower must pay the interest that accrues.

Dislocated Worker: A person who has been laid off from work or who was self-employed (such as a farmer), but is now unemployed because of poor economic conditions in the community or because of a natural disaster. The dislocated worker status is determined at the discretion of the financial aid officer.

Entrance Counseling: An educational session that first time Stafford borrowers must fulfill before the loan's proceeds can be disbursed. The Exit Counseling session provides these first time borrowers basic information about student loans and the terms and conditions of the Stafford Loan program.

Exit Counseling: An educational session that Stafford Loan borrowers must fulfill around the time of graduation or separation from a college. The Exit Counseling session provides the borrower detailed information about the loans he/she borrowed, the company that will collect the payment and the repayment alternatives that are available.

Expected Family Contribution (EFC): Amount of money a student (and spouse) or family is expected to pay toward college education. Commonly referred to as the family’s “ability to pay”.
The EFC is calculated when the student submits a financial aid application. (FAFSA)

Federal Direct Student Loan Program (FDSLP): The program name for loans that are both guaranteed and funded by the federal government. If your school is a "Direct Lending School", your Stafford Loan is administered by the Federal Direct Student Loan Program (FDSLP). The US government provides funds for “direct loans” directly to students and their parents through their schools. Applications can be obtained from your school. Banks and guarantee agencies are not involved in the process.

Federal Family Educational Loan Program (FFELP): Federal college loan program in which the lender and the administrator are a bank, credit union, or other private lender.

Federal Methodology: Formula developed by Congress and defined by statute, used to assess both the parents’ and student’s income and assets in order to determine the Expected Family Contribution. Does not consider the home or the family farm as an asset.

Financial Aid Budget: The Financial Aid Budget is a breakdown of how the college determines the total cost of attendance.

Financial Aid Profile (PROFILE): An institutional information form distributed by College Scholarship Service (CSS). Some colleges may require the PROFILE in addition to the FAFSA to help them determine the financial aid package.

Financial Aid Officer (FAO): The chief financial administrator at each college responsible for determining financial aid packages.

Financial Aid Package: The total amount, and type, of aid that a student will receive from one school. It can consist of a variety of programs including federal and state-funded grants and loans, college based programs, and any additional aid programs the college may make available to the student.

Financial Aid Transcript: A form used by post-secondary institutions to collect data about a student’s prior attendance at other post-secondary institutions, financial aid awards that the student received at the institution providing the transcript, and the status of certain eligibility criteria involving default and repayments owed. All transfer students applying for aid must have this form submitted by the school they a