Student Financial Aid - Terms & Definitions

ACT (American College Testing Service): An exam taken by students who intend to attend colleges in the Midwest. SAT is for students who intend to attend colleges in the East. Schools in the West and South may accept either.

Assets: Part of a family’s financial worth; includes home equity, other real estate, stocks, bonds, cash savings.

Wisconsin Resident: An unmarried student under 18 if your parents have been legal Wisconsin residents or if you’ve lived for two years with a legal Wisconsin resident other than a parent for (?); or if a parent is in the U.S. Armed Forces, stationed in Wisconsin and on active duty when you enroll. All married students, regardless of age, and unmarried students 18 or older, must establish their own residency.

Central Processor: The federal government’s computer system that analyzes the information on your FAFSA, calculates how much you and your family can pay toward college, and sends out the Student Aid Report; also called federal student aid processor.

Citizen/Eligible Noncitizen: A U.S. citizen, U.S. national (includes natives of American Samoa and Swain’s Island), or a U.S. permanent resident who has an Alien Registration Receipt Card. Other eligible noncitizens are those who have an Arrival-Departure Record from the U.S. Immigration and Naturalization Service showing one of the accepted designations, or a Temporary Resident Card. Citizens of the Federated States of Micronesia, the Marshall Islands and Palau are eligible for Pell Grants, Federal Supplemental Educational Opportunity Grants or Federal Work-Study only. Also see the FAFSA.

Cost of Attendance (COA): The total costs of college; also called student budget.

Default: Failure to make loan payments or otherwise honor a loan’s terms; reported to credit bureaus and can influence future credit.

Dependent Student: A student under 24 years old who doesn’t qualify as an independent student and whose parental income and asset information is used in calculating his/her expected family contribution.

Expected Family Contribution (EFC): the portion of your family’s financial resources that should be available to help pay educational costs.

FAFSA: The Free Application for Federal Student Aid.

Federal Family Education Loan Program (FFELP): Consists of the Federal Stafford, PLUS and Consolidation loans; these loans are made by commercial lenders.

Financial Aid Package: An offer of financial aid, usually a combination of grant, loan and/or work aid.

Financial Aid Transcript (FAT): A record of federal student aid received.

Financial Need: the difference between the expected family contribution and school costs; the amount of aid you’re eligible to receive; also known as financial aid eligibility.

GED: General Educational Development score used to measure academic achievement to the high school graduate level.

Guarantee: A promise to pay a debt if the borrower fails; the government guarantees student loans made by banks.

Guaranty Agency: The organization that administers the FFELP. In Wisconsin the guarantor is Great Lakes Higher Education.

Home Equity: Current home value minus the amount still owed.

Independent College: A nonprofit, private college not run by a government organization.

Independent Student: One who is financially self-supporting.

Interest: The fee charged to borrowers by lenders for using loan money.

PSAT (Preliminary Scholastic Aptitude Test): Taken by students who are sophomores in high school and planning to take the SAT. (which see)

Promissory Note: A legally binding contract between a borrower and lender listing all terms and conditions of a student loan.

SAT (Scholastic Aptitude Test): College entry exam taken by most students in the East or students who intend to attend colleges in the East. ACT is taken by students who intend to attend colleges in the Midwest. Schools in the West and South may accept either.

Satisfactory Academic Progress: The progress you must maintain toward a degree or certificate to receive financial aid; your school’s written standard of satisfactory progress.

Scholarship: A grant awarded based on grades or other achievement; not always based on financial need.

Selective Service Registration: If required by law, a student must register, or arrange to register, with the Selective Service to receive federal student aid; applies to males born on or after January 1, 1960, who are at least 18 years old, citizens/eligible noncitizens, and not currently on active duty in the Armed Forces. (Citizens of the Federate States of Micronesia, the Marshall Islands, or Palau are exempt from registering.)

Service to Receive Federal Student Aid: Applies to males born on or after January 1, 1960, who are at least 18 years old, citizens/eligible noncitizens, and not currently on active duty in the Armed Forces.

Student Aid Report (SAR): The report summarizing the information submitted on your FAFSA.

Student Budget: the total cost of attending a college; cost of attendance.

Vocational School: an institution offering a course of study beyond high school to teach specific job skills; also called a trade school.