What is financial Aid?
Financial Aid is the term covering all forms of money given to students to help cover the cost of their education.
There are four main types: grants, work-study, loans, and scholarships.
Terms You should Know:
FAFSA - Free Application for Federal Student Aid: Each student should fill out this application to determine eligibility for Financial Aid. Many schools will use this to determine how much aid you are able to receive. Must be filled out each year.
FSA ID: The username and password you created for your FAFSA. Don't forget this! Students will have one FSA ID that they will use each time they access the FAFSA. Parents with more than one student will only have one account that they will use for all students.
AGI - Adjusted Gross Income: This is the total amount of your income (wages, salaries, interests, dividends, etc.) after deductions such as taxes.
Dependent: A student who does not meet the criteria for status as an Independent Student.
Independent: A student who is above the age of 24, married, a graduate or professional student, a veteran, a member of the Armed Forces, an orphan, a ward of the court, an emancipated minor, homeless or at risk of being homeless, or someone who has dependents of their own.
EFC - Estimated Family Contribution: The amount of money that your family is expected to contribute to the cost of your education each year. This is determined by the information you enter on the FAFSA. This amount can change from year to year.
COA - Cost of Attendance: The total cost to attend a given school each year. The numbers will change based on school and student status. Cost of Attendance includes Tuition, Room and Board, books, supplies, transportation, loan fees, school fees, dependent care, and miscellaneous expenses.
Financial Need: COA-EFC=Financial Need. This is what is left when you subtract the Estimated Family Contribution from the Cost of Attendance. This amount can be covered by any type of financial aid.
SAR - Student Aid Report: This report is a summary of the information you submitted on your FAFSA. Your EFC will be listed on this report as long as there is no additional information and no corrections that need to be submitted. This report should be emailed to you within a week of submitting your FAFSA.
Federal Student Aid: All aid given by the Federal Government through the FAFSA. This includes federal loans, federal grants, and federal work-study programs. This does not include State Aid or Scholarships.
State Aid: Aid given by your state of residency for the purpose of attending college within that state. In California, State Aid is predominantly given through Cal Grants.
Merit Based: Aid given based on merit. This could include grades, GPA, courses taken, extracurricular activities, special skills, community service, or more.
Need Based: Aid given based on need. This includes family income, personal income, extenuating circumstances, financial hardship, and more.
Financial Aid Package: The total amount of Financial Aid you are offered from a school. This includes all grants, loans, work-study programs, and scholarships.
Financial Aid Award Letter: This letter lists your Financial Aid Package in detail and usually includes the Cost of Attendance for reference. This is the guaranteed amount if you attend that school.
Subsidized Loan: With this need-based loan, the government will pay your interest while you are in school, a grace period, or a deferment. The student will never need to pay this interest back, even after graduating.
Unsubsidized Loan: The student is responsible for all interest accrued, including while attending school. They may not have to pay while in school, but they will be responsible for making payments the full amount after graduation.