Glossary of Financial Aid Terms

Appeal/Special Circumstance — A process in which students can request additional considerations be made when determining financial aid eligibility, often due to a recent change in household income.

Award Year – School year for which financial aid is used to fund a student’s education. Generally, this is the 12-month period that begins on July 1st of one year and ends on June 30th of the following year.

Cost of Attendance (COA) — The amount it will cost a student to go to school. This cost considers various aspects including, but not limited to: tuition, room, board, and student fees. Indirect costs, such as textbooks, travel, and miscellaneous costs, should also be considered.

Dependent/Independent — For federal aid purposes, a student is considered a dependent, regardless of claim status on federal taxes, unless the student is at least one of the following: at least 24 years old, married, a graduate/professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, someone with legal dependents (not a spouse), an emancipated minor, or someone who is, or is at risk of being, homeless.

Entrance Counseling — A mandatory information session which takes place before you receive your first federal student loan that explains your responsibilities and rights as a student borrower.

Free Application for Federal Student Aid (FAFSA) — To apply for federal student aid, such as federal grants, work-study, and loans, you need to complete the FAFSA. This application must be submitted every year that the student plans to utilize federal aid and can be found at

Federal Loans (Subsidized/Unsubsidized) — Loans through the Direct Loan Program offer students a fixed interest rate and flexible repayment terms. The unsubsidized loan is not based on financial need and accrues interest while a student is enrolled. The subsidized loan is need-based and does not accrue interest while a student is enrolled.

Grant — Gift aid that is typically based on financial need. Grants do not need to be paid back. 

Interest — Interest is a loan expense charged for the use of borrowed money. The expense is calculated as a percentage of the unpaid principal amount of the loan. While most loans create interest, individual rates between loans will vary. Please contact your loan servicer for more information on your specific loan.

Master Promissory Note (MPN) — An MPN is a legal document that contains the Borrower’s Rights and Responsibilities and Terms and Conditions for repayment. Direct PLUS will utilize a different MPN than Direct Subsidized / Unsubsidized loans. An MPN must be completed before federal loans can be disbursed.

Origination Fee — An upfront fee charged by a lender when taking out a loan. This is often represented as a percentage of the amount of the loan in question. 

PELL Grant — The Pell Grant is the largest federal grant program offered to undergraduates and is designed to assist students from low-income households. PELL grant eligibility is automatically determined based on the information in your FAFSA.

PLUS Loan — Direct PLUS Loans are federal loans and are applied for at Parent PLUS loans can be borrowed by a parent of a dependent undergraduate student. Graduate students are also able to apply for a Graduate PLUS Loan for themselves.

Private Loan — Private Education Loans, also known as Alternative Education Loans, can help bridge the gap between the cost of your education and the financial aid a student has. Private loans are offered by private lenders and the terms and rates can vary between lending organizations. Please reach out directly to the lender with specific questions.

Satisfactory Academic Progress (SAP) — A federal regulation that requires recipients of federal financial aid to maintain a satisfactory rate of progress toward completion of a degree (pace), be in good standing based on a cumulative GPA, and meet maximum time frame requirements.

Scholarship – A need-based or achievement-based award issued to support a student’s education. This is considered gift-aid and does not need to be paid back. 

Student Aid Index (SAI) — Your SAI is an index number used to determine your eligibility for federal student aid. This number results from the financial information you provide in your Free Application for Federal Student Aid (FAFSA). This is not an actual dollar amount that you are expected to pay.

Verification — A federally mandated process to confirm the accuracy of data provided by selected applicants on the Free Application for Federal Student Aid (FAFSA). To complete the verification process, the student, their parent(s), or spouse, if applicable, are required to provide certain documents to the school for review. If the documentation the student provides the institution doesn’t match what was reported on the FAFSA, verification can result in changes to the student’s financial aid eligibility, and/or financial aid offers.

Work-Study — Federal Work-Study provides part-time jobs for undergraduate and graduate students with financial need. If eligible, the amount listed in your financial aid package represents the amount you can earn up to in a single semester. Money earned through this program is issued directly to the student.