Academic Year

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.

Accrual Date

The day interest charges on an educational loan begin to accrue.


The process of adding unpaid interest to the principal balance of an educational loan, thereby increasing the total amount to be repaid.

Citizen/Eligible Noncitizen

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:

  • Refugee
  • 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)

You can also be eligible based on the Family Unity Status category, with approved I-797s (Voluntary Departure and Immigrant Petition), or 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.


A loan program that allows a borrower to combine various educational loans into one new loan. By extending the repayment period (up to 30 years depending on the loan amount) and allowing a single monthly payment, consolidation can make loan repayment easier for some borrowers.

Cost of Attendance (COA)

The total amount it should cost a student to go to school--usually expressed as a yearly figure. The cost of education covers tuition and fees, on-campus room and board (or a housing and food allowance for off-campus students),and allowance for books and supplies, transportation, and miscellaneous expenses. Certain other items may be added at the discretion of the Financial Aid Administrator (FAA). Your COA can be affected by your enrollment status.


Failure to repay a student loan according to the terms agreed to when you signed a promissory note. If you default, your school, the organization that holds your loan, the state, and the federal government can all take action to recover the money, including notifying national credit bureaus of your default. Your wages and/or tax returns may be garnished, and you will no longer be eligible to receive federal financial aid.


An authorized period of time during which a borrower may postpone principal and interest payments. Deferments are available while borrowers are in school at least half time, enrolled in a graduate fellowship program or rehabilitation training program, and during periods of unemployment or economic hardship. Other deferments may be available depending on when and what you borrowed. Contact your lender for additional details.


The release of loan funds to the school for delivery to the borrower. Disbursements for most loans are made in equal multiple installments, and made co-payable to the borrower and the school.

Entrance/Exit Interviews

Counseling sessions borrowers are required to attend before receiving their first loan disbursement and again before leaving school.

Expected Family Contribution (EFC)

An amount, determined by a formula established by Congress, that indicates how much of your family's financial resources should be available to help pay for school. The EFC is used in determining your eligibility for financial aid.

FAFSA (Free Application for Federal Student Aid)

The federal aid application. First step of the aid process.

Federal Family Education Loan Program (FFELP)

Education loans provided by private lenders and guaranteed by the federal government. Subsidized and Unsubsidized Federal Stafford Loans and Parent PLUS loans are included in this program.

Financial Aid Administrator (FAA)

A representative of the Financial Aid and Scholarships Office that reviews a student's application and awards aid or otherwise is involved in the financial aid process.

Financial Aid Package

The total financial aid a student receives. Federal and non-federal aid such as grants, loans, work study, and scholarships are combined in a "package" to help meet the student's need.

Financial Need

The difference between the Cost of Attendance and the Estimated Family Contribution. This amount is your total eligibility for aid from all sources and is used in determining what your aid package will be.


An authorized period of time during which the lender agrees to temporarily postpone a borrower's principal repayment obligation. Interest continues to accrue and usually must be paid during the forbearance period. Forbearance may be granted at the lender's discretion when a borrower is willing to repay their his or her loan but is unable to do so.

Grace Period

The period between the time a borrower leaves school or drops below half-time and the time they are obligated to begin repaying their loans - usually six or nine months, depending on the type of loan.

Guaranty Agency

The organization that administers the Federal Stafford Loan and Federal Plus Loan programs in your state. The federal government sets loan limits and interest rates, but each state is free to set its own additional limitations, within federal guidelines. This agency is the best source of information on Stafford and PLUS loans in your state. To find the name, address, and telephone number of the guaranty agency in your state, as well as information about borrowing, call the Federal Student Aid Information Center at 1-(800)4-FEDAID (1-800-433-3243).

Guaranty Fee

An insurance premium deducted from the borrower's loan proceeds prior to disbursement and paid to the guaranty agency that insures the loan. By law the fee cannot exceed 3% of the loan amount.

Institutional Quality Assurance Program (IQAP)

A program which involves the verification of financial aid application information. Participants are randomly selected out of all aid recipients and required to submit various documentation. IQAP provides a means to do a systematic, detailed analysis of procedures determining eligibility, management policies, general Financial Aid and Scholarships Office policies, and procedures and collection of required supporting documents, as well as helping institute corrective action measures for the future.


A fee charged for the use of borrowed money. Interest is calculated as a percentage of the principal loan amount. The rate may be constant throughout the life of the loan (fixed rate) or it may change at specified times (variable rate). As of October 1, 1992, all federal education loans made to new borrowers have variable interest rates.


A financial institution (bank, savings and loan, or credit union) that provides the funds for students and parents to borrow educational loans. Some schools are also lenders.

Needs Analysis

A process of reviewing a student's aid application to determine the amount of financial aid a student is eligible for. Completing a needs analysis form is the required first step in applying for most types of financial aid.

New Borrower

A borrower who has no outstanding (unpaid) loan balances on the date (s)he signs the promissory note for a specific educational loan. New borrowers may be subject to different regulations than borrowers who have existing loan balances.

Origination Fee

A fee charged by the federal government and deducted from loan proceeds before disbursement to partially offset administrative costs of the Federal Family Education Loan Program (FFELP).


Office of Scholarships and Financial Aid. Pell Grant


The amount borrowed. Interest is charged on this amount, and guaranty and origination fees will be deducted prior to disbursement.

Promissory Note

The legal document borrowers sign when they get an education loan. It lists conditions under which the money is borrowed and the terms under which borrowers agree to repay the loan with interest. Borrowers should keep the borrower copy of their promissory notes until the loans are fully repaid.

Repayment Schedule

Discloses the borrower's monthly payment, interest rate, total repayment obligation, due dates and length of time for repaying the loan.

Satisfactory Academic Progress

A school's written standard of satisfactory progress. (Qualitative) Students must maintain a "C" average or have an academic standing consistent with their school's graduating requirements in order to receive federal student aid. (Quantitative) Students must earn 2/3 of their attempted hours in order to remain eligible for financial aid.

Secondary Market

An organization established to purchase education loans from lenders. This allows lenders to replenish capital to fund new loans. Selling loans is a common practice among lenders and does not affect the terms and conditions under which the loan was originally made.

Student Aid Report (SAR)

A form sent to the student after submitting the FAFSA to the federal processor. The SAR shows the information that was processed and indicates the amount of Pell Grant Eligibility. The SAR should be forwarded to the Financial Aid and Scholarships office at the school of intended enrollment.

Subsidized Loan

A need-based loan on which the interest is paid by the federal government during the in-school, grace, and deferment periods.

Unmet Need

The amount of financial aid eligibility that is not provided by the OSFA.

Unsubsidized Loan

A non need-based loan on which interest is not paid by the federal government. Borrowers are responsible for interest on all unsubsidized loans from the date the loan is disbursed.


A process of review to determine the accuracy of the information on a student's financial aid application. Students are selected by the Processing Agency of the Pell Grant Program.