Paying for College Without Going Broke, 2017 Edition - Princeton Review, Kalman Chany (2016)
ACADEMIC YEAR: A measure of academic work to be performed by the student, subject to definition by the school.
ACCESS GROUP: An educational and financing organization that distributes and processes the Needs Access financial aid application.
AGI: Adjusted gross income. In 2014, the AGI is expected to be listed on line 37 of the IRS 1040; line 21 of the IRS 1040A and line 4 of the IRS 1040EZ.
AMERICAN COLLEGE TESTING PROGRAM (ACT): The administrator of a group of standardized tests in English, mathematics, reading, and science reasoning.
BASE INCOME YEAR (also known as the BASE YEAR): The second calendar year preceding the academic year for which aid is being sought. 2015 will be the base income year for the 2017-2018 award year.
BUSINESS/FARM SUPPLEMENT: A supplemental aid application required by a few colleges for aid applicants whose parents own businesses or farms or who are self-employed. The individual school’s aid policy will determine if this form must be completed.
CAMPUS-BASED PROGRAMS: Three federal student aid programs that are administered directly by the school’s financial aid office (the Perkins Loan, the Supplemental Educational Opportunity Grant, and the Federal Work-Study program).
COLLEGE BOARD: A nonprofit association that writes and processes the CSS Financial Aid PROFILE form.
COOPERATIVE EDUCATION: A college program offered at many schools that combines periods of academic study with periods of paid employment related to the student’s field of study. In most cases, participation will extend the time required to obtain a bachelor’s degree to five years.
COST OF ATTENDANCE: A figure, estimated by the school, that includes the cost of tuition, fees, room, board, books, and supplies as well as an allowance for transportation and personal expenses. This figure is compared to the Expected Family Contribution to determine a student’s aid eligibility. Also known as the student budget.
DEFAULT: Failure to repay a loan according to the terms of the promissory note.
DEPENDENT STUDENT: A classification for aid purposes for a student who is considered to be dependent upon his or her parent(s) for financial support.
EDUCATIONAL TESTING SERVICE: The organization that writes the SAT exam.
EMPLOYMENT ALLOWANCE: A deduction against income in the federal and institutional methodologies for two-parent families in which both parents work or a single-parent family in which that parent works.
EXPECTED FAMILY CONTRIBUTION (EFC): The amount of money the family is expected to contribute for the year toward the student’s cost of attendance. This figure is compared to the Cost of Attendance to determine a student’s aid eligibility.
FAFSA: See Free Application for Federal Student Aid.
FAMILY CONTRIBUTION: Another name used to refer to the Expected Family Contribution.
FAO: See Financial Aid Officer.
FEDERAL METHODOLOGY: The generally accepted method used to calculate the family’s expected contribution to college costs for federal aid purposes. Depending on the individual college’s policy, the federal methodology may also be used to determine eligibility for money under the school’s control.
FEDERAL WORK-STUDY (FWS): A federally funded aid program that provides jobs for students. Eligibility is based on need.
FINANCIAL AID: A general term used to refer to a variety of programs funded by the federal and state governments as well as the individual schools to assist students with their educational costs. While the names may vary, financial aid comes in three basic forms: (1) gift aid (grants and scholarships) that does not have to be paid back (2) student loans, and (3) work-study jobs.
FINANCIAL AID PROFILE FORM: See PROFILE form.
FINANCIAL AID OFFICER: An administrator at each school who determines whether a student is eligible for aid and if so, the types of aid to be awarded.
FREE APPLICATION FOR FEDERAL STUDENT AID (FAFSA): The need analysis document written by the U.S. Department of Education. This form is required for virtually all students seeking financial aid including the unsubsidized Stafford loan.
FSA ID: A new personal identification system for use with U.S. Department of Education websites including the online FAFSA.
FOTW: FAFSA on the Web, the online version of the FAFSA.
401(k), 403(b): The names of two of the more popular tax-deferred retirement plans in which employees elect to defer part of their earnings until a later date.
GIFT AID: Financial aid, usually a grant or scholarship, that does not have to be paid back and that does not involve employment.
GRAD PLUS LOANS: A federally sponsored educational loan program in which graduate or professional school students can borrow up to the total cost of attendance minus any financial aid received. Eligibility is not based on need.
GRANTS: Gift aid that is generally based on need. The programs can be funded by the federal and state governments as well as the individual schools.
GUARANTEED STUDENT LOANS (GSL): See Stafford Student Loan program.
HALF-TIME STATUS: Refers to students taking at least 6 credits per semester, or the equivalent.
INDEPENDENT STUDENT: A student who, for financial aid purposes, is not considered dependent on his or her parent(s) for support. Also known as a self-supporting student.
INCOME PROTECTION ALLOWANCE: A deduction against income in both the federal and the institutional methodologies.
INSTITUTIONAL FORMS: Supplemental forms required by the individual schools to determine aid eligibility.
INSTITUTIONAL METHODOLOGY: An alternative method used to calculate the family’s expected contribution to college costs. This methodology is generally used by private and a few state schools to determine eligibility for aid funds under the school’s direct control. Colleges that use the institutional methodology usually require completion of the PROFILE form.
LONG FORM: This generally refers to the IRS 1040 form.
NATIONAL DIRECT STUDENT LOANS (NDSL): See Perkins Loan program.
NEED: The amount of aid a student is eligible to receive. This figure is calculated by subtracting the Expected Family Contribution from the Cost of Attendance.
NEED ACCESS FINANCIAL AID APPLICATION: A need analysis program operated by the Access Group. It is required by many graduate and professional schools to determine eligibility for institutional aid.
NEED ANALYSIS: The process of analyzing the information on the aid form to calculate the amount of money the student and parent(s) can be expected to contribute toward educational costs.
NEED ANALYSIS FORMS: Aid applications used to calculate the expected family contribution. The most common need analysis forms are: the Free Application for Federal Student Aid (FAFSA) and the Financial Aid PROFILE form. Consult the individual school’s financial aid filing requirements to determine which form(s) are required for that particular school.
NONCUSTODIAL PARENT’S STATEMENT: A supplemental aid application required by a few colleges for aid applicants whose parents are separated or divorced or who never married. The individual school’s aid policy will determine if this form must be completed. If required, this form will be completed by the noncustodial parent. This is generally the parent with whom the child spent the least amount of time in the preceding 12 months prior to completion of the form.
NONCUSTODIAL PROFILE (NCP): An online form required by some colleges (mostly highly selective, private ones) that is completed by the noncustodial parent.
PARENTS’ CONTRIBUTION: The amount of money the parent(s) are expected to contribute for the year toward the student’s Cost of Attendance.
PARENT LOANS FOR UNDERGRADUATE STUDENTS (PLUS): A federally sponsored educational loan program in which parents can borrow up to the total cost of attendance minus any financial aid received for each child in an undergraduate program. Eligibility is not based on need.
PELL GRANT: A federally funded need-based grant program for first-time undergraduate students (i.e., the student has not as yet earned a bachelor’s or first professional degree). Funds from this program are generally awarded to lower- and lower-middle-income families. Years ago, this program was called the Basic Educational Opportunity Grant (BEOG).
PERKINS LOAN PROGRAM: Formerly known as National Direct Student Loans (NDSL), this federally funded need-based program provides low interest loans to undergraduate and graduate students and is administered by the school’s financial aid office. In most cases, repayment does not begin until nine months after the student graduates or leaves school and there are no interest charges while the student is in school. The fixed interest rate is currently 5%.
PHEAA: The Pennsylvania Higher Education Assistance Agency.
PLUS LOANS: See Parent Loans for Undergraduate Students.
PREFERENTIAL PACKAGING: The situation in which the more desired aid applicants get better aid packages, which are larger in total dollar amount and/or contain a higher percentage of grants versus loans.
PROFILE FORM: A need analysis document written and processed by the College Board.
PROMISSORY NOTE: The legal document which the borrower signs to obtain the loan proceeds and which specifies the terms of the loan, the interest rate, and the repayment provisions.
ROTC: The Reserve Officer Training Corps programs that are coordinated at many college campuses by the U.S. Army, Navy, and Air Force.
SAT: An exam, administered by the College Board, which has critical reading, math, and writing sections.
SAR: See Student Aid Report.
SCHOLARSHIPS: Gift aid that is usually based on merit or a combination of need and merit.
SELF-HELP: The portion of the aid package relating to student loans and/or work-study.
SEOG: See Supplemental Educational Opportunity Grant.
SHORT FORMS: This generally refers to the IRS 1040A or the 1040EZ forms.
SIMPLIFIED NEEDS TEST: An alternative method used to calculate the family’s expected contribution to college costs for federal aid purposes, in which all assets are excluded from the federal aid formula.
SLS: See Supplemental Loans for Students.
STAFFORD STUDENT LOAN (SSL) PROGRAM: Formerly known as the Guaranteed Student Loan (GSL) program, this federally funded program provides low-interest loans to undergraduate and graduate students. In most cases, repayment does not begin until six months after the student graduates or leaves school and there are no interest charges while the student is in school. For new loans disbursed after June 30, 2006, the interest rate is fixed. (Prior loans had variable rates.) There are two types of Stafford loans: subsidized and unsubsidized. The subsidized Stafford loan is need-based and the government pays the interest while the student is in school. The unsubsidized Stafford loan is non-need-based and can be taken out by virtually all students. In many cases, students can elect to let the interest accumulate until after they graduate.
STANDARDIZED FORMS: The generic term used in this book when referring to any of the need analysis forms that must be sent to a processing service. The two most commonly used standardized forms are the U.S. Department of Education’s Free Application for Federal Student Aid (FAFSA) and the College Board’s CSS/Financial Aid PROFILE form.
STUDENT AID REPORT (SAR): The multipage report that is issued to students who have filed a completed FAFSA.
STUDENT BUDGET: See Cost of Attendance.
STUDENT’S CONTRIBUTION: The amount of money the student is expected to contribute for the year toward his or her cost of attendance.
SUBSIDIZED STAFFORD LOAN: See Stafford Student Loan (SSL) program.
SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT (SEOG): A federally funded need-based grant program for undergraduate students that is awarded by the school’s financial aid office.
SUPPLEMENTAL LOANS FOR STUDENTS (SLS): A federally subsidized educational loan program for independent undergraduate and graduate students. Eligibility was not based on need. This loan program has been phased into the Stafford Loan Program. Previous borrowing limits under this program are now represented by the mandatory unsubsidized portion of the Stafford Loan.
UNIFORM AID SUPPLEMENT: A standardized set of supplemental aid questions developed and utilized by a number of highly selective private colleges.
UNSUBSIDIZED STAFFORD LOAN: See Stafford Student Loan (SSL) program.
VERIFICATION: A process in which the financial aid office requires additional documentation to verify the accuracy of the information reported on the aid applications.
WORK-STUDY: See Federal Work-Study.