How To Speak Financial Aid: A Glossary of Terms
If you’re like most college freshmen-hopefuls, chances are you’ll be looking for some financial aid to help foot the bill. The problem? The terms used in financial aid forms aren’t exactly words you throw around in casual conversation. It can seem like they’re speaking another language!
But never fear. We’re here to help. Below you’ll find a few of the most commonly used financial aid terms – along with their definitions.
Financial Aid Application Terms
Free Application For Federal Student Aid (FAFSA) –
This is the official application for federal financial aid. Colleges and universities will require you to fill this out in order to apply for any kind of financial aid.
This is the official document you’ll get from colleges listing exactly what financial aid has been, well, awarded to you. It will tell you how much your family will be expected to pay (expected family contribution) and how much it will cost to attend that school when all is said and done (cost of attendance), as well as list the terms and conditions of your financial aid.
Financial Aid Package
Picture all your financial aid – all of the scholarships, grants and loans awarded to you from both federal and private sources – put into a box and tied up with a pretty bow on top. That’s your financial aid package.
Types of Financial Aid Defined
Grants are considered “gift aid.” They give you money for college and don’t have to be paid back. They can come from federal sources (such as Pell Grants), but are also available from states and private organizations.
Student loans are just what they sound like – money given to you to pay for college that needs to be repaid. Eventually. There are many different types – both federal student loans and private loans. You’ll want to read the terms for your loan options very carefully.
Scholarships are also considered “gift aid,” so you don’t have to pay them back. They are awarded for a variety of reasons, some simply because of merit or academic excellence, others because you’re pursuing a certain major, have specific interests, have financial need…the list goes on and on.