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Student Financial Aid Glossary

Financial aid can be an alphabet soup of acronyms like FAFSA, SAR, SAP and EFC and technical terminology. It is almost like speaking a foreign language. This glossary defines the terms and acronyms that are most frequently used in student financial aid.

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Associate of Arts Degree
Associate of Science Degree
Adjusted Available Income
The term “above-the-line” refers to the calculation of the taxpayer’s adjusted gross income (AGI). If an exclusion from income occurs above-the-line, it affects the calculation of AGI. Itemized deductions occur below-the-line and do not affect the calculation of AGI.
Academic Year
An academic year is the school year of an educational institution. Most colleges and universities have an academic year that runs from August or September to May or June.
Academic Credit
Academic credit signifies that a student completed a course of study. Completion of a degree or certification program may require the student to earn a particular number of academic credits.
Academic Transcript
A transcript is a record of the classes taken by a student and the student’s academic performance.
Accelerated Study
Accelerated study refers to a program of study in which the student will be completing the requirements for a degree or certificate in less than the normal timeframe.
The term “access” refers to the concept of enabling low-income or other at-risk students to pursue a postsecondary education. Financial aid improves access by eliminating demonstrated financial need as a barrier to a college education.
Accreditation of an institution of higher education occurs when an accrediting agency conducts an intensive review of the quality of the institution’s education and training programs and certifies that the institution has met the academic standards of the accrediting agency.
Accrual Date
The accrual date is the date when interest begins to be charged on a loan, usually starting on the date of disbursement.
To accrue is to accumulate periodically over time.
Accrued Interest
Accrued interest is interest that has accumulated on a debt or investment. Often the term “accrued interest” refers to interest that is payable but not yet been paid.
Automated Clearing House
American College Testing Program
Additional Unsubsidized Federal Stafford Loan
When a dependent student’s parents are denied a Federal Parent PLUS loan due to an adverse credit history, the student becomes eligible for increased unsubsidized Federal Stafford loan limits, the same loan limits that are available to independent students.
Adjusted Available Income
Adjusted available income is the income that remains after allowances for taxes, employment expenses and basic living expenses have been subtracted.
Adjusted Gross Income
Adjusted Gross Income (AGI) is total income, including both earned and unearned income, after subtracting certain exclusions from income, but before subtracting deductions and exemptions.
An adjustment is a change to data elements on the FAFSA that are used to calculate the expected family contribution (EFC) or cost of attendance (COA). Adjustments occur at the discretion of the college financial aid administrator after a review of documented special circumstances.
Administrative Wage Garnishment
Administrative wage garnishment (AWG) is a form of wage garnishment (a mechanism used to seize an defaulted borrower’s earnings to repay their debts) available to the U.S. Department of Education, which may implement it administratively, without needing a court order.
Administrative Forbearance
An administrative forbearance is a short-term suspension of the obligation to repay a loan, granted at the discretion of the lender, usually to accommodate a transition in the status of the loan.
College admission is the process of applying and being accepted for enrollment in a college or university.
Admissions Test Scores
Admissions test scores are the student’s scores on standardized college admissions tests, such as the ACT and SAT.
An admit-deny situation occurs when a college grants admission to a student but fails to award the student the financial aid he or she needs to be able to afford to enroll at the college.
Advanced Placement
An Advanced Placement (AP) test (administered by the College Board) is used to award college credit to a student based on the student’s mastery of college-level course material in a specific subject area.
Adversarial Legal Proceeding
In an adversarial proceeding, the party seeking relief must give legal notice to the other party so that the other party has the opportunity to contest the claims of the party seeking relief. In bankruptcy cases it is a separate lawsuit that provides the holder of the loan with an opportunity to object to the discharge of the debt.
Adverse Credit History
Borrowers with an adverse credit history are ineligible for the Federal PLUS loan. An adverse credit history occurs when the borrower has a current delinquency of 90 or more days on more than $2,085 in total debt, the borrower had more than $2,085 in total debt in collections or charged off in the two years preceding the date of the credit report or certain derogatory events (e.g., bankruptcy discharge, default determination, repossession, foreclosure, tax lien, wage garnishment or the write-off of Title IV federal education loan debt) have occurred within the 5 years before the date of the credit report.
Aid to Families with Dependent Children (replaced by TANF)
Affected Individual
An affected individual, as defined by the HEROES Act of 2003, is an active-duty member of the U.S. Armed Forces, a person who lives or works in a disaster area or a person who suffers economic hardship because of a war, military operation or national emergency.
Aggregate Loan Limit
The aggregate (or cumulative) loan limit is the maximum amount that may be borrowed in total according to the terms of a loan.
Adjusted Gross Income
Ante-nuptial Agreement
An ante-nuptial agreement, often called a prenuptial agreement or premarital agreement, is a contract executed by a couple prior to getting married. The ante-nuptial agreement typically specifies spousal support and the division of property upon divorce.
Agreement to Serve (ATS)
As a condition of receiving a TEACH Grant, the recipient must sign an agreement to serve, which commits the recipient to teach for four out of the eight years after graduation and explains that the grant will be converted retroactively to an unsubsidized Federal Stafford loan if the recipient fails to fulfill the service requirements.
Articulation Agreement
An articulation agreement between two colleges specifies which courses at one college, such as a community college, are accepted for credit at a second college, such as a 4-year college. The articulation agreement will specify the minimum required grade for each class. Articulation agreements may specify whether the courses satisfy prerequisite requirements at the second college. Articulation agreements help ensure a smooth transition for transfer students. California, Florida, Massachusetts, Pennsylvania and Virginia guarantee admission to one of the state’s public 4-year colleges for students who graduate from one of the state’s community colleges.
Available Income
An alien is a citizen of a foreign country, not the country in which the individual resides.
Alimony is court-ordered support paid by a husband or wife to his or her former spouse after divorce or separation.
Asset Protection Allowance
The asset protection allowance shelters a portion of assets from being assessed by the need analysis formula.
Alternative Student Loans
An alternative student loan, typically called a private student loan, is a non-federal education loan made by a bank, financial institution or state. The terms of a private student loan are set by the lender, not the federal government, and the loan is not guaranteed against default by the federal government.
Amortization spreads out the payments on a loan over time, often requiring installment payments to occur at regular intervals.
Award Amount
An award amount is the dollar value of a form of financial aid, such as the amount of a private scholarship.
Alternative Minimum Tax
Annual Loan Limit
The annual loan limit is the maximum amount that may be borrowed per year under the terms of a loan.
Annual Percentage Rate
The annual percentage rate (APR) is an annualized interest rate that includes the effects of compound interest. The definition of APR is specified by the Truth in Lending Act (TILA) and Regulation Z.
Anticipated Graduation Date
The anticipated graduation date is the date a student expects to graduate and become available for employment. The commencement of loan repayment is based on the borrower’s actual graduation date.
Advanced Placement
Asset Protection Allowance
A financial aid appeal is a request for more financial aid, usually because of special circumstances that affect the family’s ability to pay for college expenses.
Approved Drug Rehabilitation Program
Students whose federal student aid eligibility is suspended because of a conviction for the sale or possession of illegal drugs while receiving federal student aid. Such students may regain eligibility by completing an approved drug rehabilitation program that includes passing two unannounced drug tests. Approved drug rehabilitation programs include those that are administered or recognized by a federal, state or local government agency or court, a federal or state-licensed hospital, clinic or doctor, or which are qualified to receive payment from a federal or state-licensed insurance company or government program.
Annual Percentage Rate
Alien Registration Number (A-Number)
American Recovery and Reinvestment Act of 2009
Child support obligations that are owed and unpaid are said to be in arrears. Past-due child support obligations do not affect eligibility for federal or college student aid.
An asset is something of value. It may include tangible and intangible property.
An assistantship is a form of financial aid where the student performs services in exchange for a full or partial tuition waiver and a living stipend. The most common types of assistantships are research assistantships and teaching assistantships.
Associate's Degree
An Associate’s degree is awarded by two-year colleges, such as community colleges.
At Risk Youth
An at-risk youth is a student who is at risk of failing to graduate from high school or college. Examples include low-income students, first-generation college students, students who are single parents, students who are homeless or at risk of homelessness and orphans.
Allowances against Total Income
Automatic Teller Machine
Auto-Zero EFC
Low-income students who are eligible to file an IRS Form 1040A or 1040EZ or who receive certain means-tested federal benefits will have their expected family contribution (EFC) automatically set to zero.
Automated Clearing House
The Automated Clearing House (ACH) is an electronic network for financial transfers, such as direct deposit and debit card transactions. It is a form of electronic funds transfer (EFT).
Award Year
An award year is a 12-month period that typically runs from July 1 to June 30.
Award Letter
A financial aid award letter (also called a financial aid notification) is a paper or electronic document from a college that describes the types and amounts of financial aid offered to the student. The award letter also explains the terms and conditions of the financial aid, what the student is expected to do to keep the award and a deadline for accepting the award.
Administrative Wage Garnishment
Academic Year or Award Year