The Glossary of Terms for Financial Aid Offers was created in 2012 by NASFAA's Award Notification Task Force, and updated in 2019 after consultation with NASFAA membership, the NASFAA Board of Directors, and members of the higher education community, to more accurately reflect the current financial aid environment. It contains universally accepted definitions of language typically contained on financial aid offers given to current and prospective students by colleges and universities. The intent of this glossary is:
Direct Costs: Charges included in the Cost of Attendance that the student/family pays directly to the college.
Enrollment Status: Academic workload (or course load), as defined by the institution, in which a student is enrolled for a defined academic period. This normally relates to the number of credit hours or clock hours taken by a student during a given academic period (e.g. full-time, three-quarter-time, half-time, less-than-half-time).
Expected Family Contribution (EFC): An eligibility index that college financial aid staff use to determine how much financial aid you would receive if you were to attend their school. The EFC is calculated according to a formula specified in law and is based upon the information provided by the student and their family on the Free Application for Federal Student Aid (FAFSA).
Family Financial Responsibility (FFR): Many schools award institutional need-based scholarships and grants based upon a more comprehensive calculation of family financial circumstances using information provided on the CSS PROFILE or the institution's own financial aid form. This can result in a higher (or lower) figure than the Free Application for Federal Student Aid (FAFSA) might indicate with its Expected Family Contribution (EFC) estimate.
Federal Pell Grant: A federal grant provided by the federal government to undergraduate students who demonstrate exceptional financial need and have an Expected Family Contribution below a certain threshold established by the federal government. The Pell Grant award amount is prorated based on Enrollment Status.
Federal Supplemental Educational Opportunity Grant (FSEOG): A federal grant awarded by the institution to qualified undergraduate students who demonstrate exceptional financial need. Priority is given to Federal Pell Grant recipients.
Federal Work-Study (FWS): A federal program offered and administered by the institution that provides opportunity for part-time employment to students with financial need to help pay their educational expenses. Students are responsible for finding qualified employment. Funds are paid out through a paycheck, as earned.
Gift Aid: Funds awarded to the student that do not have to be repaid, unless the student fails to meet certain criteria, such as a service requirement that is specified as a condition of the gift aid or not completing the period for which the aid was awarded. Gift aid can include awards with titles such as grants, scholarships, remissions, awards, waivers, etc. Gift aid can be awarded based upon many factors, including (but not limited to) financial need, academic excellence, athletic, musical, and/or theatrical talent, affiliation with various groups, and/or career aspirations.
Grant: Gift Aid that is typically based on financial need.
Income Share Agreement (ISAs): A student's contract with their institution or a private entity to pay a percentage of their future earnings for a fixed period after graduation in exchange for funds to pay for their education while enrolled.
Indirect Costs: Estimated expenses in the Cost of Attendance that are not paid directly to the institution.
Iraq and Afghanistan Service Grant (IASG): A federal grant to qualifying students with a parent or guardian who died as a result of U.S. military service in Iraq or Afghanistan after September 11, 2001. If a student is eligible for a Federal Pell Grant, he or she cannot receive an IASG.
Net Price: Amount of direct and indirect costs remaining after all Gift Aid is applied. Net price can be covered through a variety of sources, including: savings, income, and education loans.
Program Level: Level of the degree-granting program in which a student is enrolled. Program levels may include: undergraduate (students seeking an associate degree, an undergraduate certificate, or a baccalaureate degree); post-baccalaureate (such as teacher certification); or graduate (students working on a master's degree, graduate certificate, doctorate, or professional degree). The amounts and types of financial aid for which a student is eligible is determined, in part, by their program level.
Scholarship: Gift Aid that is typically based on merit, such as, academic excellence, talent, affiliation with various groups, or career aspirations or a combination of merit and need.
Self-help: An institution's expectation that a student contribute toward their education using a combination of loans, student employment such as Federal Work-Study, and/or summer savings.
Teacher Education Assistance for College and Higher Education (TEACH) Grants: Federal grants for undergraduate and graduate students, awarded in exchange for specific future teaching service in designated high-need fields and low-income elementary and secondary schools. If a student does not complete the required teaching service, the grant becomes a Federal Direct Unsubsidized Loan that must be repaid.
Unmet Need: The student's Cost of Attendance, minus their Expected Family Contribution or Family Financial Responsibility (if applicable), less any need-based aid received, such as Gift Aid, Federal Work-Study or Federal Direct Subsidized Loans.
Verification: A federally mandated process to confirm the accuracy of data provided by selected applicants on the Free Application for Federal Student Aid (FAFSA). To complete the verification process, the student, their parent(s), or spouse, if applicable, are required to provide certain documents to the school for review. If the documentation the student provides the institution doesn't match what was reported on the FAFSA, verification can result in changes to the student's financial aid eligibility, and/or financial aid offers.
Visit the Department of Education's website for more information on the types of Federal Student Aid.
Publication Date: 11/23/2020