Glossary of Financial Aid Terms
A period of at least 30 weeks of instructional time during which a full-time student is expected to complete at least 24 semester or trimester hours at an institution that measures program length in credit hours.
The day interest charges on an education loan begin to accrue.
The official document, issued by the Financial Aid Office, which lists all the financial aid awarded to the student. While award letters vary among institutions, the letter generally lists the Expected Family Contribution, cost of attendance, and all the terms of the aid awarded.
The process of adding unpaid interest to the principal balance of an education loan, thereby increasing the total amount to be repaid.
You must be one of the following to receive federal student aid:
- U.S. citizen
- U.S. national (includes natives of American Samoa or Swain's Island)
- U.S. permanent resident with an I-151, I-551, or I-551C (Alien Registration Receipt Card)
If you are not in one of these categories, you must have an Arrival-Departure Record (I-94) from the U.S. Immigration and Naturalization Service (INS) showing one of the following designations:
- Asylum Granted
- Indefinite Parole and/or Humanitarian Parole
- Cuban-Haitian Entrant, Status Pending
- Conditional Entrant (valid only if issued before April 1, 1980)
- Other Eligible Non-Citizen with a Temporary Resident Card (I-688)
You also can be eligible based on the Family Unity Status category, with an approved I-797 (Voluntary Departure and Immigrant Petition), or if you have a suspension of deportation case pending before Congress. Permanent residents of the Trust Territory of the Pacific (Palau) may be eligible for federal student aid. Citizens of the Federated States of Micronesia and the Marshall Islands are eligible for Pell Grants, Supplemental Educational Opportunity Grant, or Work Study only. Since these apply only to undergraduate students, graduate students falling into this category are not eligible for federal aid. You are NOT eligible for federal financial aid if you only have a Notice of Approval to Apply for Permanent Residence (I-171 or I-464A) or if you are in the United States on an F1, F2, J1, J2, or G series visa.
A loan program that allows a borrower to combine various education loans into one new loan. By extending the repayment period (up to 30 years depending on the loan amount) and allowing a single monthly payment, consolidation can make loan repayment easier for some borrowers.
Cost of Attendance (COA)/Cost of Education
The total amount it should cost a student to go to school-usually expressed as a yearly figure. The cost of education covers tuition and fees; on-campus room and board (or a housing and food allowance for off-campus students); and allowance for books and supplies, transportation, and miscellaneous expenses. Certain other items may be added at the discretion of the financial aid advisor (FAA). Your COA can be affected by your enrollment status. Refer to Sample Budgets.
Failure to repay a student loan according to the terms agreed to when you signed a promissory note. If you default, your school, the organization that holds your loan, the state, and the federal government can all take action to recover the money, including notifying national credit bureaus of your default. Your wages and/or tax returns may be garnished, and you will no longer be eligible to receive federal financial aid.
An authorized period of time during which a borrower may postpone principal and interest payments. Deferments are available while borrowers are in school at least half time, enrolled in a graduate fellowship program or rehabilitation training program, and during periods of unemployment or economic hardship. Other deferments may be available depending on when and what you borrowed. Contact your lender for additional details.
The release of loan funds to the school for delivery to the borrower. Disbursements for most loans are made in equal multiple installments and transferred electronically to the student's school account.
Counseling sessions borrowers are required to complete before receiving their first loan disbursement and again before leaving school.
Expected Family Contribution (EFC)
Expected Family Contribution (EFC)
An amount, determined by a formula established by Congress, that indicates how much of your family's financial resources should be available to help pay for school. The EFC is used in determining your eligibility for financial aid.
FAFSA (Free Application for Federal Student Aid)
FAFSA (Free Application for Federal Student Aid)
The federal aid application used by the school to determine what kind of federal aid you will be eligible for. This must be completed by all students who wish to be considered for financial aid at Pepperdine's Graziadio School.
Family Share of Expenses
Our best estimate of your family's capacity to absorb, over time, the costs of education. It is not a prediction of how much cash you have on hand, a value judgment about how much a family should be able to draw from current income, or a measure of liquidity. It is not the amount you must pay directly to the University but, rather, the family's share of the total cost of education, as determined by the FAFSA. Refer to Cost of Attendance above.
Financial Aid Advisor (FAA)
A representative of the Financial Aid Office who reviews a student's application, awards aid, and helps the student in all aspects of the financial aid process.
Financial Aid Package
The total financial aid a student receives. Federal and non-federal aid such as grants, loans, graduate assistantships, and scholarships for which the student is eligible are combined in a "package" to help meet the student's need.
Financial Aid Transcript (FAT)
A document required from each school previously attended regardless of whether aid was received. This must be received by the school at which you are now applying for aid.
The difference between the cost of attendance and the Estimated Family Contribution. This amount is your total eligibility for aid from all sources and is used in determining what your aid package will be.
An authorized period of time during which the lender agrees to temporarily postpone a borrower's principal repayment obligation. Interest continues to accrue and usually must be paid during the forbearance period. Forbearance may be granted at the lender's discretion when a borrower is willing to repay the loan but is unable to do so.
The period between the time a borrower leaves school or drops below half time and the time he/she is obligated to begin repaying his/her loans — usually six or nine months, depending on the type of loan.
A type of financial aid award based on need or merit that is not repaid by the student.
The organization that administers the Federal Stafford Loan programs in your state. The federal government sets loan limits and interest rates, but each state is free to set its own additional limitations, within federal guidelines. This agency is the best source of information on Stafford Loans in your state. The guaranty agencies that the Graziadio School usually deals with are: United Student Aid Funds and ED Fund. Their telephone numbers are:
- United Student Aid Funds 800.824.7044
- ED Fund 916.445.0880
A fee charged for the use of borrowed money. Interest is calculated as a percentage of the principal loan amount. The rate may be constant throughout the life of the loan (fixed rate) or it may change at specified times (variable rate). As of October 1, 1992, all federal education loans made to new borrowers have variable interest rates.
A financial institution (bank, savings and loan, or credit union) that provides the funds for students and parents to borrow. Some schools are also lenders.
A process of reviewing a student's aid application to determine the amount of financial aid for which a student is eligible. Completing a needs analysis form (FAFSA) is the required first step in applying for most types of financial aid.
A borrower who has no outstanding (unpaid) loan balances on the date he/she signs the promissory note for a specific education loan. New borrowers may be subject to different regulations than borrowers who have existing loan balances.
A fee charged by the federal government and deducted from loan proceeds before disbursement to partially offset administrative costs.
The amount borrowed. Interest is charged on this amount, and guaranty and origination fees will be deducted prior to disbursement.
The legal document borrowers sign when they get an education loan. It lists conditions under which the money is borrowed and the terms under which borrowers agree to repay the loan with interest. Borrowers should keep the borrower copy of their promissory notes until the loans are fully repaid.
Discloses the borrower's monthly payment, interest rate, total repayment obligation, due dates, and length of time for repaying the loan.
Satisfactory Academic Progress
To receive and retain financial aid, students must make satisfactory academic progress as defined by their program of study. Each academic program sets its own required standards for continuation. Please refer to the GSBM Academic Catalog for details regarding academic requirements.
An organization established to purchase education loans from lenders. This allows lenders to replenish capital to fund new loans. Selling loans is a common practice among lenders and does not affect the terms and conditions under which the loan was originally made.
Student Aid Report (SAR)
A form sent to the student after submitting the FAFSA to the federal processor. The SAR shows the information that was processed. The SAR is used to help determine financial need for federal and state aid. It is also required to process federal student loans. The SAR should be forwarded to the Financial Aid Office at the school in which you intend to enroll. For duplicate reports, call 319.337.5665
A need-based loan on which the interest is paid by the federal government during the in-school, grace, and deferment periods.
The amount of financial aid eligibility that is not provided by the Financial Aid Office.
A non-need-based loan on which interest is not paid by the federal government. Borrowers are responsible for interest on all unsubsidized loans from the date the loan is disbursed.
A process of review to determine the accuracy of the information on a student's financial aid application. Students are randomly selected by the federal student aid processor.