Terms You Should Know About Higher Education Funding

Graduation cap

Audit

Is a way to register and pay for a “credit” course without receiving a letter grade on a student’s transcript.

Direct Loans

Loans created by the U.S Department of Education under the William D. Ford Federal Direct Student Loan Program.

FAFSA

The U.S. Department of Education’s Free Application for Federal Student Aid that helps students apply for federal student financial aid.

Financial Aid

Loans, grants, or scholarships given to students that are funded by federal and private sources.

Financial Aid Administrator (FAA)

An individual who is responsible for communicating information to students on student loans, grants and employment programs. The FAA and staff help students apply and receive student aid.

Financial Aid Package

A package that includes the complete financial aid offered by the school.

Federal Student Loans

Loans regulated by the federal government that are offered to students to help pay for higher education costs.

Grace period

After students graduate or leave school, they have several months before the payments on their loans are due.

Interest

Loan expense that is charged to the borrower. This is calculated by the percentage of the loan and by any capitalized interest.

Loan

Funds borrowed from a lender with an agreement that the borrower must pay interest on the borrowed amount and the initial amount over a certain period of time.

PLUS Loans (Parent Loan for Undergraduate Students)

Loans that parents can take out for their undergraduate children. These loans are low in interest and are federally backed.

Private Student Loans

Loans made by a private lender. These loans are used for tuition, room and board, and other higher education costs.

Scholarships

Monetary awards given to students based on financial needs, athletics, academics, community service and more.

Subsidized Stafford Loan

A federally backed loan that has a fixed rate with no interest.

Tuition

Fees charged to cover the cost of instruction.

Unsubsidized Stafford Loan

Federally backed loan that has a fixed rate with interest.

Work- Study

Part-time jobs on campus acting as a component of a student's financial aid. Work-study is provided by the federal government and the school.

Sources:

Federal Student Aid

Montgomery College

Simple Tuition