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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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Net Present Value
The net present value is an equivalent current value of a future series of cash flows. It is the amount an independent third party would be willing to pay now to receive the future payments. It discounts each of the future payments back to the present, calculating the amount of money that would be needed to produce each future payment, assuming a particular return on investment (discount rate).