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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.

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OIG

Office of the Inspector General

OMB

Office of Management and Budget

Ombudsman

An ombudsman investigates individual’s complaints. The FSA Ombudsman investigates complaints involving federal student loans while the Private Student Loan Ombudsman investigates complaints involving private student loans.

OPE

Office of Postsecondary Education at the U.S. Department of Education

Open Admission

An open admission college admits most students who apply. The admission criteria are minimal and unselective, generally requiring only a high school diploma, GED or the equivalent.

Origination

Origination of a loan involves processing a borrower’s loan application, denying or approving the loan application, and disbursing the loan.

Origination Fee

An origination fee is a fee charged to process a borrower’s loan application. With federal education loans, the origination fee is deducted from the disbursement check when the loan proceeds are received.

Orphan

An orphan is a child both of whose biological parents are dead.

Out-of-Pocket Cost

The out-of-pocket cost, also known as 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.

Out-of-State Student

An out-of-state student is a student who has legal residence in a state other than the student in which the student’s college or university is located. Out-of-state students at public colleges and universities may be charged higher tuition than in-state students.

Outside Scholarship Policy

A college’s outside scholarship policy specifies how a student’s financial aid package is adjusted when the student receives a private scholarship. An ideal outside scholarship policy would first allow the scholarship to address unmet need, then use it to replace student loans and student employment, and last replace institutional grants.

Outstanding Balance

The outstanding balance on a loan is the sum of unpaid principal, unpaid interest and any unpaid fees. This may be less than the loan’s payoff amount, which will include any applicable additional interest that will accrue by the payoff date, as well as any collection charges.

Outstanding Interest

The outstanding interest on a loan is the accrued, but unpaid interest on the loan.

Overaward

A student is said to be overawarded when the total need-based financial aid exceeds the student’s demonstrated financial need or when the total financial aid plus the expected family contribution exceeds the college’s annual cost of attendance.

Overpayment

An overpayment occurs when a student receives more money than the student is entitled to receive.

Override

A dependency override changes a student’s status from dependent to independent. College financial aid administrators may perform a dependency override on a case-by-case basis when justified by documented unusual circumstances.