College Terminology 4: Financial Aid & Scholarships
As I start writing more blogs for your information, I realize that some of the terminology might be a bit foreign to you. If you have ever done a college visit, your head begins to spin with what they are saying. I have compiled a great list of college terminology that will help you through the entire process, whether you are thinking of the a 2- or 4-year school.
Since the list is quite extensive I am going to break it down into easier sections for each part of the process.
- High School Related
- Post-secondary Institutions & Programs
- Admission Process
- Financial Aid & Scholarships
- On-Campus Terms
Feel free to add more in the comments section if you come across a term we should include!
These scholarships are based upon athletic ability and your prospective college’s departmental needs. Division I, II, and III college athletic scholarships are very difficult to receive because of fierce competition.
An explanation of the financial aid a college will give a student, which may include grants, scholarships, student loans and work-study.
These scholarships are awarded to help employees and their families, show community support and to encourage future job seekers toward a career in the company’s area of business. Corporate scholarships are much less competitive than other types of scholarships because of geography, employment and the relatively low number of applicants. Start with your family's employers, check out the newspaper and see which companies in your area are awarding scholarships, and then contact these businesses to find out how to apply.
Expected Family Contribution (EFC)
Expected Family Contribution is the amount of financial contribution a family is expected to pay towards the cost of college. This amount is based on a federal formula, and determines the student's eligibility for need-based financial aid. The EFC appears on a Student Aid Report (SAR), which is received after a student's FAFSA is processed.
Free Application For Federal Student Aid (FAFSA)
A form that all students must fill out to be considered for federal financial aid.
Money you receive for you college tuition or expenses that you may or may not have to pay back. (See: “Grant,” “Loan,” and “Scholarship”)
Full Cost of Attendance
The full cost of attendance refers to all expenses relevant to attending a particular postsecondary institution. This estimate is provided by the institution and includes tuition, fees, books, supplies, room and board, transportation and personal expenses and is different for each institution. Cost of attendance calculators, sometimes referred to as net price calculators, can be found on each institution's website.
A form of financial aid from a non-profit organization (such as the government) that you do not have to repay.
These scholarships are awarded by the college or university to reduce the cost of attending. Often these scholarships will be based on extra-curricular involvement, academics (see merit scholarship), student demographics or other criteria. Upon admission student’s application will be reviewed for different scholarships, some automatically applied or some are to be applied to.
Interest Bearing Loans
Interest bearing loans have an attached interest rate which will have to be repaid in addition to the amount of the loan. Interest is a fee charged to use the money. Interest rates are the rates charged to borrow the funds from an institution. Interest rates on loans can be fixed (will remain at the same initial rate) or adjusting (potentially increasing) over time.
A form of financial aid that you must repay. Loans are an amount of money provided to an individual on the terms that the money and gained interest will be repaid in full. Loans can be offered by the Federal Government, or by private institutions such as banks or other financial institutions. There are two types of Federal loans -- subsidized and unsubsidized. These loans can have a fixed interest rate, adjusting or in rare cases are interest free. Loans may be taken out by one individual or "co-signed" where more than one individual is responsible for the repayment of the loan.
Local scholarships typically come from the community in which the student resides. There is typically an application process and have differing criteria. Typically smaller in denominations, students can often win multiple as there are fewer applicants.
Becoming more popular, students can begin entering in their “resume” to start accruing smaller denominations for their work in high school. Micro-scholarships allow students to see their potential scholarship upfront before they apply.
Financial aid that is awarded based on a student’s achievements and/or talents (e.g., academic, athletic).
There are a tremendous amount of scholarship sites out there with large organizations giving away money. Typically these scholarships are larger in denomination but more students are applying.
Financial aid that is awarded based on a student’s ability to pay for college.
Full consideration of an applicant and his or her application without regard to the individual’s need for financial aid.
A "Pell-eligible" student is eligible to receive a Pell grant, which is a need-based grant provided by the federal government. To be "Pell-eligible" students must fill out the Free Application for Federal Student Aid (FAFSA) and be seeking their first post-secondary degree. The amount of the award depends on the student's expected family contribution (EFC), cost of attendance, enrollment status (full or part time) and if the student will attend for a full academic year or less. For more information please visit: http://www2.ed.gov/programs/fpg/index.html
Pell grants are awarded by the Federal Government to students who demonstrate financial need. Only students who are pursuing their first degree are eligible for Pell Grants. Recipients can study at any approved post-secondary institutions, which are then responsible for distributing the grant.
A private loan is from a financial institution other than the Federal Government such as a bank or other financial institution. Private loans are typically unsubsidized loans and can either have a fixed interest rate (will remain at the same initial rate) or will be adjusting (potentially increasing) over time. Private loans typically have a higher interest rate than those offered by the Federal Government.
Private Organization Scholarships
These scholarship opportunities number in the millions. Places of worship, labor unions, school districts, chambers of commerce and philanthropic organizations are all excellent sources for college scholarships. Sit down with your family and make a scholarship search list of potential sources.
Room and Board
Room and board is a typical name for the cost associated with living in on-campus housing and participating in a meal plan offered by the post-secondary institution.
A form of financial aid that you do not have to repay.
Tuition is the cost of the academic program at a post-secondary institution. Tuition is generally charged per credit hour. It varies for each post-secondary institution, and may vary depending on a student's residency status, and level of coursework.
A job (typically on campus) that allows a student to earn money to help pay for the costs associated with college.