Common Financial Aid Terms
A period of at least 30 weeks of instructional time during which a full-time student is expected to complete at least 24 semester or trimester hours, or at least 36 quarter hours, at an institution that measures program length in credit hours; or at least 900 clock hours at an institution that measures program length in clock hours.
The date on which interest charges for a loan begin to accrue.
A card linked to the students account on which funds are issued to students from Financial Aid awards after deduction of charges.
Some loan programs provide for cancellation of the loan under certain circumstances. For example, if the student becomes a teacher in certain national shortage areas, they may be eligible for cancellation of all or part of the balance of their educational loans.
The practice of adding unpaid interest charges to the principal, increasing the size of the loan principal.
You must be one of the following to receive federal student aid:
* U.S. Citizen
* U.S. national (includes natives of American Samoa or Swain’s Island)
* U.S. permanent resident with an I-151, I-551, or I-551C (Alien Registration Receipt Card)
If you’re not in one of these categories, you must have an Arrival-Departure Record (I-94) from the U.S. Immigration and Naturalization Service (INS) showing one of the following designations:
* Asylum Granted
* Indefinite Parole and/or Humanitarian Parole
* Cuban-Haitian Entrant, Status Pending
* Conditional Entrant (valid only if issued before April 1, 1980)
* Other eligible noncitizen with a Temporary Resident Card (I-688)
Previously, you could also be eligible based on the Family Unity Status category, with approved I-797s (Voluntary Departure and Immigrant Petition); however, the passage of the Welform Reform Act of 1996 has put this eligible category in question. You may also be eligible if you have a suspension of deportation case pending before Congress.
Permanent residents of the Trust Territory of the Pacific (Palau) may be eligible for federal student aid. Citizens of the Federated States of Micronesia and the Marshall Islands are eligible for Pell Grants, SEOG, or Work Study only. You are NOT eligible for federal financial aid if you only have a Notice of Approval to Apply for Permanent Residence (I-171 or I-464A), or if you are in the U.S. on an F1, F2, J1, J2, or G series visa.
COA (Cost of Attendance)
The cost of attendance (COA) is the total cost of education for the student, including tuition, fees, room and board, books and supplies, transportation, and miscellaneous expenses. COA is school-specific and is determined by the financial aid offices at each school.
A consolidation loan combines several loans into one bigger loan. This sometimes results in a lower interest rate, as when a consumer loan is used to pay off credit card balances. Such loans often reduce the size of the monthly payment by extending the term of the loan. An extension of the term of the loan may also increase the overall cost of the loan. Consolidation loans also simplify the repayment process by allowing a single payment instead of several. More information about Direct Consolidation Loans is available on the Department of Education’s Direct Consolidation Loan site.
A loan is in default when the borrower fails to pay a regular installment on time or otherwise fails to meet the terms and conditions of the loan. If you default on a loan, the College, the holder of the loan, and the government can take legal action to recover the money, including garnishing your wages. Defaulting on a government loan will make you ineligible for future federal financial aid. This ineligibility for financial aid remains in effect until such time as the defaulted loan is paid in full or until you have made at least 6 consecutive on-time reasonable monthly payments as determined by the holder of the loan.
Deferment occurs when a borrower is allowed to postpone repayment of a student loan. For example, some federal loan programs allow students to defer their loans while they are in school. Other loan programs allow the student to defer the interest payments by capitalizing the interest.
A student’s dependency status determines to what degree the student is expected to have access to parental financial resources. An independent student is one who is 24 years old as of January 1 in the school year for which aid is being applied, is married, is a graduate or professional student, has legal dependents other than a spouse, is a veteran, or is an orphan or ward of the court. All other students are considered dependent and, as such, must provide parental information on the Free Application for Federal Student Aid.
The date on which the loan funds are released to the college for payment
EFC (Expected Family Contribution)
The Expected Family Contribution (EFC) is the amount of money the federal government expects the family to be able to contribute to the student’s education. The EFC is calculated according to a formula established by Congress. The difference between the COA and the EFC is the student’s financial need.
A FAA is a Financial Aid Administrator, a College employee who is involved in the financial aid process.
The FAFSA is the Free Application for Federal Student Aid. This application is the first step in the financial aid application process and is the only financial aid application required at Navarro College.
The FFELP is the Federal Family Education Loan Program, and includes the Federal Stafford Loans and the Federal PLUS loans.
Financial Aid Package
The financial aid package is the complete collection of grants, scholarships, loans, and work-study employment offered to a student to financially enable them to attend the College.
A forbearance is a condition where the lender allows the borrower to postpone repaying the principal of their loan, but requires the borrower to continue paying the interest charges.
FWS (Federal Work Study)
The Federal Work-Study program is a form of cooperative education which provides students with on and off-campus employment while in school that is theoretically career-oriented (but general office and clerical positions are not uncommon).. Eligibility is based on need.
The practice of withholding a portion of a borrower’s wages to repay his or her loan, often without their consent.
A short time period after graduation during which the borrower is not required to begin regular repayment of their student loan. The typical grace period is six months.
A grant is a kind of financial aid that the student does not have to repay.
A guarantee agency agrees to pay back a loan if the borrower should default. For example, the Texas Guaranteed Student Loan Corporation guarantees the Family Education loan Program. Each state has a different guarantee agency that administers the Federal Stafford and PLUS loans under the FFELP programs for students in that state. A guarantee fee is a small percentage of the loan that is paid to the guarantee agency as a form of insurance against default. For the name, address, and telephone number of your state’s guarantee agency, call the Federal Student Aid Information Center at 1-800-433-3243 (1-800-4-FED-AID).
Interest is an amount charged to the borrower for the privilege of using the lender’s money. Interest is usually calculated as a percentage of the principal. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. All new Federal Stafford and PLUS loans use variable interest rates that are tied to the rates for federal treasury bills.
The bank or lending institution that provides the money to the borrower for the loan.
Students who borrow under the Federal Family Education Loan Program are required to complete on-line “loan counseling”.
The difference between the COA and the EFC is the student’s financial need – the gap between the student’s resources and the cost of attending the school. The financial aid package is often based on the amount of financial need. The process of determining a student’s need is known as the need analysis.
The origination fee is an upfront charge deducted from the loan to pay part of the loan’s administrative costs.
The Pell grant is a federal grant that provides funds of up to $5,550 based on the student’s financial need. For more information about the Federal Pell Grant see the Student Aid Webpage.
Professional Judgement (PJ)
Financial Aid administrators can, with adequate documentation, overrides, extend Title IV eligibility and make certain changes in the student’s need analysis.
Principal is the amount of money borrowed under the loan. Interest is charged as a percentage of the principal.
A promissory note is the binding legal document signed by the student borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy, and cancellations. The student should keep this document until the loan has been repaid.
Parent Loans for Undergraduate Students (PLUS) are federal loans available to parents of undergraduate students to help finance the student’s education. Parents may borrow up to the full cost of their children’s education, less the amount of any other financial aid received.
SAR (Student Aid Report)
A SAR or Student Aid Report is an acknowledgement sent to the student after filing a FAFSA. The SAR summarizes the information included in the FAFSA and may be requested by your school’s financial aid office. The SAR will also indicate the amount of Pell Grant eligibility, if any.
Satisfactory Academic Progress
A student must be making Satisfactory Academic Progress in order to continue receiving federal aid. If a student fails to maintain an academic standing consistent with the school’s SAP policy, they are unlikely to meet the school’s graduation requirements. The Office of Student Financial Aid has established the Satisfactory Academic Progress standards for financial aid eligibility at Navarro College.
A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board.
Loans are often bought and sold on the secondary market. Thus the bank you make your payments to may change during the lifetime of the loan. The terms of your loan do not change when it is sold to another lender.
The Supplemental Education Opportunity Grant (SEOG) is a federal grant program for undergraduate students with exceptional need. SEOG grants are awarded by the school’s financial aid office. For more information about the SEOG Program at Navarro see the Financial Aid Programs Page.
Federal Stafford Loans are federally guaranteed student loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on demonstrated financial need; unsubsidized loans are not.
With a subsidized loan, the government pays the interest on the loan while the student is in school at least half-time, during the grace period, and during any approved deferment periods.
In an ideal world, the financial aid office would be able to provide each student with the full difference between their ability to pay and the cost of education. Due to funding constraints the financial aid office may provide the student with less than the student’s demonstrated financial need (as determined by the financial aid office). This gap is known as the unmet need.
An unsubsidized loan is a loan for which the government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed. The borrower may be eligible to choose to have the interest deferred and capitalized into the loan principal.
Verification is a review process in which the financial aid office determines the accuracy of the information provided on the student’s financial aid application. During verification the student will be required to submit documentation to support the information listed (or not listed) on the financial aid application.