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Financial Terms Glossary

Finance & Financial aid terms 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 basic finance or student financial aid.

Edvisors® allows the use of its glossary content by any college, university, non-profit, or other educational access agency, if the content is linked from the Edvisors® page. At any time Edvisors® may limit use per its Terms of Use policy.

National Candidates Reply Date

May 1 is the National Candidates Reply Date, the date by which students must notify the college or university that they have accepted the school’s offer of admission.

National Defense Student Loan

The National Defense Student Loan was a predecessor of the Federal Perkins Loan.

National Student Clearinghouse (NSC)

The National Student Clearinghouse provides degree and enrollment verification services.

National Student Loan Data System

The National Student Loan Data System (NSLDS) is a database that records all federal education loans and grants made by the U.S. Department of Education as well as student enrollment status information. It replaced the Financial Aid Transcript.

Naturalization

Naturalization is the process through which a foreign citizen or national is granted citizenship.

NDSL

National Defense Student Loan (now known as the Federal Perkins Loan)

Need

Demonstrated financial need is the difference between the cost of attendance (COA) and the expected family contribution (EFC).

Need Analysis

Need analysis is a process that evaluates household income, asset and demographic information to determine the family’s financial strength and ability to pay for school.

Need-Aware Admissions

A college has a need-aware or need-sensitive admissions policy if it considers the student’s ability to pay alongside other criteria while deciding whether to admit the student.

Need-Based Aid

Need-based aid is awarded to students based on demonstrated financial need, to help them pay for the cost of college. Need-based aid usually comes in the form of grants, student employment opportunities and student loans. Most need-based aid comes from the federal and state governments and from the colleges and universities.
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Need-Blind Admissions

A college has a need-blind admissions policy if the college admits students without regard to their demonstrated financial need. Some colleges that are need-blind become need-sensitive when admitting international students, transfer students and wait-listed students. Not all need-blind colleges meet the full demonstrated financial need of admitted students. This leads to an “admit-deny” situation in which the student is admitted but the college does not provide the student with the financial aid that he or she needs to be able to afford to attend the college.
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Need-Sensitive Admissions

A college has a need-sensitive or need-aware admissions policy if it considers the student’s ability to pay alongside other criteria while deciding whether to admit the student.

Negative Amortization

Negative amortization occurs when the loan payments are less than the new interest that accrues.

Negotiation

When special circumstances affect the family’s ability to pay for college expenses, negotiation with the financial aid office is necessary to request more aid. Professional judgment (PJ) is the process by which a college financial aid administrator reviews, on a case-by-case basis, documented special circumstances affecting a student’s ability to pay for college. During a professional judgment review, the financial aid administrator may decide to make an adjustment to the cost of attendance or to the data elements on the FAFSA that are used to calculate the student’s expected family contribution (EFC).

Net Cost

Net cost is the difference between the college’s full cost of attendance and the full financial aid package, including loans and student employment, in addition to gift aid. The actual cost to the family will be higher, since loans have to be repaid and student employment must be earned.

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).

Net Price

Net price is the difference between the college’s full cost of attendance and only the gift aid a student receives. Gift aid includes scholarships, grants and other money that does not need to be earned or repaid. The net price is the true amount of money a student will pay to attend a college. It is the equivalent of a discounted sticker price.

Net Price Calculator

A net price calculator is an online tool that provides a personalized estimate of what it will cost to attend a specific undergraduate college. Most undergraduate colleges are required by law to provide a net price calculator on their web sites.

Net Value

The net value or net worth of an asset is the difference between the market value of the asset and any debts secured by the asset.

Net Worth

The net worth of an asset is the difference between the market value of the asset and any debts secured by the asset.

New Borrower

A new borrower as of a specified date has no outstanding balance on any Title IV federal education loans when receiving a federal education loan on or after that date. A borrower with previous loans may qualify as a new borrower by paying off all previous federal education loans before obtaining a new federal education loan. However, consolidating the previous federal education loans does not qualify the borrower as a new borrower, since the federal consolidation loan was received while the borrower still had the old federal education loans.
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NHCS

National Health Corps Scholarship

NMSQT

National Merit Scholarship Qualifying Test

Noncustodial Parent

If a student’s parents are divorced, one parent is the custodial parent and the other parent is the noncustodial parent. The non-custodial parent is the parent with whom the student did not reside for the majority of the 12 months prior to the filing of the FAFSA.

Non-Custodial Parent PROFILE

The Non-Custodial Parent PROFILE or NCP PROFILE is a financial aid application form that is filed by the non-custodial parent.

NSL

Nursing Student Loan

NSLDS

National Student Loan Data System
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