Applying to college is a big step, but now that you've completed your applications, it is time to begin filling out your FAFSA. For first-generation students, filling out the FAFSA can be confusing and hard to understand.
This list compiles 20 key financial aid terms that will help you navigate the FAFSA process at any college or university. Don't know what a FAFSA is? Keep reading.
WHAT IS FINANCIAL AID AND HOW DO YOU GET IT?
Financial aid helps students pay for college and the necessary expenses that come with it. This can include tuition and fees, room and board, books and supplies, and transportation.
In order to be eligible for financial aid, students are required to to complete the Free Application for Federal Student Aid, also known as the FAFSA. The FAFSA form is the application you will use to apply for federal student aid programs offered by the U.S. Department of Education (ED). Completing and submitting the FAFSA form is free, and it gives you access to the largest source of financial aid to help pay for college.
FINANCIAL AID TERMS - FAFSA
Adjusted Gross Income (AGI)
The Adjusted Gross Income encompasses all of a person's sources of income (i.e. wages, interest, dividends, alimony, pensions, etc.) and subtracts certain deductions as reported on the federal income tax form. Deductions might include: IRA contributuions, student loan interest, moving expenses, etc.
Agreement to Serve (ATS)
The Agreement to Serve is a binding agreement that you must sign in order to receive the Teacher Education Assistance for College and Higher Education (TEACH) Grant (Ref. Teacher Education Assistance for College and Higher Education Grant).
Award Amount/Award Letter/Award Year
The Award Amount is the amount that the college or university agrees to pay based on a student's grant and loan eligibility, cost of tuition, and Expected Family Contribution (EFC).
The Award Letter is the formal offer from the college or university that outlines all of the financial aid that the college or university will offer to you as a student.
An Award Letter is typically valid for one year or 12-months. This is known as the Award Year.
Cost of Attendance (COA)
According to the Federal Student Aid website, the Cost of Attendance (COA) is how much it will cost you to go to school. This includes tuition and fees, and allowances for books, supplies, transportation, loan fees, and dependent care.
It also includes miscellaneous and personal expenses, including an allowance for the rental or purchase of a personal computer; costs related to a disability; and reasonable costs for eligible study-abroad programs.
For students attending less than half-time, the COA includes tuition and fees and an allowance for books, supplies, transportation, and dependent care expenses, and can also include room and board for up to three semesters or the equivalent at the institution.
Data Release Number (DRN)
The Data Release Number (DRN) is a four-digit number that is assigned to your FAFSA that allows you to release it to schools you did not list on your original FAFSA form.
You find this number below the confirmation number on your FAFSA submission confirmation page or in the top right-hand corner of your Student Aid Report (SAR).
According to Cornell Law, "Disposable pay is the part of the employee's compensation remaining after the deduction of any amounts required by law to be withheld."
Early Action is a non-binding, admissions process that allows students to apply early and recieve notice of their acceptance before they normally would. No formal decision is required by an early-action applicant until May 1st.
Early Decision is a binding, admissions process that allows students to apply and committ to a school before May 1st.
According to the Financial Aid website:
A U.S. national (includes natives of American Samoa or Swains Island), U.S. permanent resident (who has an I-151, I-551 or I-551C [Permanent Resident Card]), or an individual who has an Arrival-Departure Record (I-94) from U.S. Citizenship and Immigration Services (USCIS) showing one of the following designations:
- "Asylum Granted"
- "Cuban-Haitian Entrant (Status Pending)"
- "Conditional Entrant" (valid only if issued before April 1, 1980)
- Victims of human trafficking, T-visa (T-2, T-3, or T-4, etc.) holder
- "Parolee" (You must be paroled into the United States for at least one year and you must be able to provide evidence from the USCIS that you are in the United States for other than a temporary purpose and that you intend to become a U.S. citizen or permanent resident.)
Eligible Program refers to the institution's eligibility to qualify for financial aid.
Expected Family Contribution (EFC)
According to the Financial Aid website, "The Expected Family Contribution (EFC) is the number that’s used to determine your eligibility for federal student financial aid."
The EFC is reported on your Student Aid Report (SAR).
Federal School Code
The Federal School Code is the 6-digit number that is assigned by the U.S. Department of Education. In order to send your FAFSA information to a school, you must list the school's Federal School Code on your application.
You can find all Federal School Codes here.
Financial Aid Package
The Financial Aid Package is the full outline of both federal and non-federal monies that have been offered to a student by a college, university, or career center.
Financial Need is the difference between the cost of attendance (COA) and your Expected Family Contribution (EFC). Although COA can vary from school-to-school, EFC does not change once you've submitted your FAFSA.
A Merit-based award is awarded to students based on skill or ability. An example of this would be Hocking College's Academic Excellence Scholarship.
A Need-based award is awarded to students based on financial need. An example of this would be Hocking College's Supplemental Education Opportunity Grant.
Net Price/Net Price Calculator
The Net Price is an estimate of the actual cost that a student will need to pay to cover the remaining costs of college, outside of grants and scholarships. Many students use a Net Price Calculator as a comparison tool to generate an estimate for how much it would cost to attend several different schools.
Student Aid Report (SAR)
The Student Aid Report (SAR) is a paper or electronic document that gives you basic information about your eligibility for aid. This document also contains basic answers that were inputted for FAFSA.
Verification is the process of proving your identity and financial status. The process requires submitting additional documents such as your parents federal tax income transcript to the financial aid office in order to support information entered on the FAFSA form.
According to an article in US News, about one-third of FAFSAs are selected for verification.
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