Financial Terms and Acronyms

College tuition is seriously on the rise, and financial aid is becoming a mandatory factor to many students when applying. But, when researching financial aid, most of us are left thinking, "What are they SAYING?!?" Hopefully this cheat sheet will help you decode all those confusing terms and acronyms and make things a little bit easier!

  1. Student Loan: Students can take out loans and borrow money from either the federal government or private institutions to pay for tuition, books, etc. The interest rate is generally low and the money must be repaid after graduation (repayment plans differ depending on where you borrow money from).
  2. Grant: A grant is a monetary gift (given by either the federal government or a private organization) to a student who demonstrates financial need. Grants do not have to be repaid.
  3. Pell Grant: A Pell Grant is a grant awarded by the federal government. The amount you can receive depends on your financial need, the cost of attendance at your school, student status (part-time or full-time), and whether you plan on attending school for the full academic year or less. Pell Grant recipients can receive up to $5,550 and the money does not have to be repaid.
  4. Need-blind Admission: Schools that admit students “need-blind” do not look at an applicant’s financial situation when deciding admission. Instead, they base their decision solely on merit.
  5. Lottery Scholarship: A lottery scholarship is awarded to applicants at random and based on a lottery system. Every applicant that meets the stated qualifications has an equal chance of receiving the scholarship.
  6. Merit Scholarship: Merit scholarships are awarded to applicants with the highest qualifications as stated by the scholarship guidelines, such as academic standing or athletic ability.
  7. Need-based Scholarship: Need-based scholarships are awarded to applicants who demonstrate sufficient financial need. While academics may be taken into account, the scholarships are primarily given to those who cannot afford college, but whose parents make too much money to qualify for a government grant.
  8. FAFSA (Free Application for Student Aid): The FAFSA is a form filled out by both current and incoming college students that determines their eligibility for federal student financial aid. Sometimes private scholarships require a copy of this form as well.
  9. FSA (Federal Student Aid): The FSA is an office within the U.S. Department of Education that uses the FAFSA to ensure every student receives the aid they require to attend higher education.
  10. SAR (Student Aid Report): Every individual's SAR summarizes the information on their FAFSA.
  11. EFC (Expected Family Contribution): An EFC is a number between 0 and 99,999 that estimates how much money your parents and/or you will be able to contribute to higher education expenses. The lower your EFC number, the higher amount of financial aid you may be able to receive.
  12. ISIR (Institutional Student Information Report): This report is sent to the student’s institution after completion of the FAFSA and provides the student’s EFC to the institution.
  13. COA (Cost of Attendance): The COA is the estimated total price of one full year as a full-time student at an educational institution, and includes tuition, books and supplies, room and board, personal costs, and transportation.
  14. DRN (Data Release Number): Your DRN is a four-digit number that correlates to your FAFSA application.
  15. FAT (Financial Aid Transcript): This is a record of all the financial aid a student receives at every school attended.
  16. FDLP, FDSLP (Federal Direct Student Loan Program): This U.S. Department of Education program provides loans to students to help pay for higher education expenses.
  17. FSEOG (Federal Supplemental Education Opportunity Grant): The FSEOG program gives grants to low-income undergraduate students. These grants do not need to be repaid, unlike student loans.
  18. FWS (Federal Work-Study): This program provides low-income students with part-time jobs to help finance their education.
  19. LEAP (Leveraging Educational Assistance Partnership) Program: The LEAP Program provides states with grants to help them grant money and provide community service work-study programs to financially needy students.
  20. PLUS (Parent Loan for Undergraduate Students): These loans are financed to parents and guardians with good credit to help cover educational expenses.