Financial Aid

18. Glossary of Important Terms and Acronyms

One of the criteria used to establish student eligibility in order to receive Title IV program assistance is that a student must have earned a high school diploma or its equivalent. Students who are not high school graduates (or who have not earned a General Educational Development [GED] Certificate) can demonstrate that they have the “ability to benefit” from the education or training being offered by passing an approved ability-to-benefit (ATB) test. Another way to demonstrate your ability-to-benefit is to successfully complete 6 credit hours or the equivalent coursework that are applicable toward a degree or certificate program offered by the institution.

The measure of the academic work to be accomplished by a student each year as defined by the school and that meets minimum requirements in the law. For example, a school’s academic year may consist of a fall and spring semester during which a full-time undergraduate student must complete at least 24 semester hours. Academic years vary from school to school and even from educational program to educational program at the same school.

Administrative Cost Allowance

Accreditation means that the school meets certain minimum academic standards, as defined by the accrediting body. The school must have accreditation from an accrediting body recognized by the U.S. DOE to be eligible to participate in the administration of federal student aid programs.

Adjusted Gross Income

A contractual obligation by the recipient under which a student receiving a TEACH Grant commits to teach full-time in a high-need field at a low-income school or educational service agency or at certain low-income schools and within certain high-need fields for at least four complete academic years within eight years after completing (or ceasing enrollment in) the course of study for which the student received the grant. If you do not complete your teaching service obligation, the amounts of the TEACH Grants you received will be converted to a Direct Unsubsidized Loan that you must repay with interest charged from the date of each TEACH Grant disbursement.

Advanced Placement

American Recovery and Reinvestment Act of 2009

An award letter from a school states the type and amount of financial aid the school is willing to provide if you accept admission and register to take classes at that school. To continue to receive these awards, recipients will need to meet the eligibility requirements of the aid programs.

Bureau of Indian Affairs

Board of Regents

College Access Program

The addition of unpaid interest to the principal balance of a loan. With certain loans, such as subsidized Direct and FFELSM Stafford Loans, the U.S. DOE pays the interest that accrues while the student is enrolled at least half-time, during the grace period, and during periods of deferment. However, for unsubsidized Stafford Loans or PLUS Loans, the borrower is responsible for paying the interest as it accrues during all periods. Interest is also charged to the borrower during periods of forbearance on all loan types (subsidized or unsubsidized). When the interest is not paid, it is capitalized at the end of the grace, deferment, or forbearance period. This increases the outstanding principal amount due on the loan. Interest is then charged on that higher principal balance, increasing the overall cost of the loan to the borrower.

Crisis Management Team

The total amount it will cost you to go to school—usually expressed as a yearly figure. It’s determined using rules established by law. The COA includes tuition and fees; on campus room and board (or a housing and food allowance for off-campus students); and allowances for books, supplies, transportation, loan fees, and, if applicable, 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 are also covered. The COA includes reasonable costs for eligible study-abroad programs as well. 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. But no more than two of those semesters, or the equivalent, may be consecutive. Talk to the financial aid administrator at the school you’re planning to attend if you have any unusual expenses that might affect your cost of attendance.

Common Origination and Disbursement

Council on Postsecondary Education

Central Processing System

Failure to repay a loan according to the terms agreed to when you signed a promissory note. For the FFEL and Direct Loan programs, default is more specific—it occurs if you fail to make a payment for 270 days if you repay monthly (or 330 days if your payments are due less frequently). The consequences of default are severe. Your school, the lender or agency that holds your loan, the state and the federal government may all take action to recover the money, including notifying national credit bureaus of your default. This may affect your credit rating for as long as seven years. For example, you might find it difficult to borrow money from a bank to buy a car or a house. In addition, the Internal Revenue Service can withhold your U.S. individual income tax refund and apply it to the amount you owe, or the agency holding your loan might ask your employer to deduct payments from your paycheck. Also, you may be liable for loan collection expenses. If you return to school, you’re not entitled to receive additional federal student financial aid. Legal action also might be taken against you. In many cases, default can be avoided by submitting a request for a deferment, forbearance, discharge or cancellation and by providing the required documentation.

Department of Homeland Security

The William D. Ford Federal Direct Loan Program. Loans made through this program are referred to as Direct Loans. Eligible students and parents borrow directly from the U.S. DOE at participating schools. Direct Loans include subsidized and unsubsidized Direct Stafford Loans (also known as Direct Subsidized Loans and Direct Unsubsidized Loans), Direct PLUS Loans, and Direct Consolidation Loans. You repay these loans directly to the U.S. DOE.

Department of Education

Data Retrieval Tool

Eligibility and Certification Approval Report

Expected Family Contribution

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 who has an I-151, I-551, or I-551C (Permanent Resident Card). Ifyou’re not in one of these categories, you must have an Arrival-Departure Record (I-94) fromU.S. Citizenship and Immigration Services (USCIS) showing one of the followingdesignations:
    • "Refugee"
    • "Asylum Granted"
    • "Cuban-Haitian Entrant, Status Pending"
    • "Conditional Entrant" (valid only if issued before April 1, 1980)
    • Victims of human trafficking, T-visa holder or if the student’s parent is the holder of a T-1visa.
    • "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.)

If you only have a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), you’re not eligible for federal student financial aid. If you’re in the United States on certain visas, including an F1 or F2 student visa, or a J1 or J2 exchange visitor visa, you’re not eligible for federal student financial aid. Also, people with G series visas (pertaining to international organizations) are not eligible for federal student financial aid. For more information about other types of visas that are not acceptable, check with your school’s financial aid office. Citizens and eligible noncitizens may receive loans from the FFEL Program at participating foreign schools. Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau are eligible only for certain types of federal student aid. These applicants should check with their schools’ financial aid office for more information.

A program of organized instruction or study that leads to an academic, professional or vocational degree or certificate, or other recognized educational credential. To receive federal student financial aid, you must be enrolled in an eligible program, with two exceptions:

  • If a school has told you that you must take certain course work to qualify for admission into one of its eligible programs, you can get a Stafford Loan for up to 12 consecutive months while you’re completing that preparatory course work. You must be enrolled at least half-time, and you must meet the usual federal student financial aid eligibility requirements.
  • If you’re enrolled at least half-time in a program to obtain a professional credential or certification required by a state for employment as an elementary or secondary schoolteacher, you can get a Federal Perkins Loan, FWS, a Stafford Loan, or your parents can geta PLUS Loan, while you’re enrolled in that program.

Your Expected Family Contribution (EFC) is the number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provided in your FAFSASM application. Your EFC is reported to you on your Student Aid Report (SAR).


Free Application for Federal Student Aid

Financial Aid Notification

Financial Aid Release

Family Educational Rights and Privacy Act

Federal Family Education Loan

An individual who works at a college or career school and is responsible for preparing and communicating information on student loans, grants or scholarships and employment programs. The Financial Aid Director and staff help students apply for and receive student aid. The Financial Aid Director is also capable of analyzing student needs and making professional judgment changes when necessary.

The total amount of financial aid (federal and nonfederal) a student is offered by the school. The financial aid administrator at a postsecondary institution combines various forms of aid into a “package” to help meet a student’s education costs. Using available resources to give each student the best possible package of aid is one of the aid administrator’s major responsibilities. Because funds are often limited, an aid package might fall short of the amount a student needs to cover the full cost of attendance. Also, the amount of federal student aid in a package is affected by other sources of aid received (scholarships, state aid, etc.).

The Federal Family Education Loan (FFEL) Program. Loans made through this program are referred to as FFEL Loans. Private lenders provide funds that are guaranteed by the federal government. FFEL Loans include subsidized and unsubsidized FFEL Stafford Loans, FFEL PLUS Loans and FFEL Consolidation Loans. You repay these loans to the bank or private lender that made you the loan.

Federal Student Aid

Federal Work-Study

Generally Accepted Accounting Principles

This is a certificate students receive if they’ve passed a specific, approved high school equivalency test. Students who have a GED may still qualify for federal student aid. A school that admits students without a high school diploma must make available a GED program in the vicinity of the school and must inform students about the program.

Grade Point Average

The guaranty agency is an organization that administers the Federal Family Education Loan (FFEL) Program in your state. This agency can give you information on FFEL Loans. For the name, address and telephone number of the agency serving your state, you can contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).

At schools measuring progress in credit hours and semesters, trimesters, or quarters, “half-time” is at least six semester hours or quarter hours per term for an undergraduate program. At schools measuring progress by credit hours but not using semesters, trimesters or quarters, “half-time” is at least 12 semester hours or 18 quarter hours per year. At schools measuring progress by clock hours, “half-time” is at least 12 hours per week. Note that schools may choose to set higher minimums than these. You must be attending school at least half-time to be eligible for a Stafford Loan. Half-time enrollment is not a requirement to receive aid from the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, FWS and Federal Perkins Loan programs.

Higher Education Act

Higher Education Opportunity Act

Higher Education Relief Opportunities for Students

International Baccalaureate

Information for Financial Aid Professionals

Individual Student Information Report

Kentucky Educational Excellence Scholarships

KCTCS Easy Refund Program

Kentucky Higher Education Assistance Authority

The organization that made the loan initially. The lender could be the borrower’s school (for Federal Perkins Loans); a bank, credit union, or other lending institution (for FFELs); or the U.S. DOE (for Direct Loans).

Maximum Time Frame

National Association of Student Financial Aid Administrators

NSLDS is our database for federal student financial aid where you can find out about the aid you’ve received. If you’ve only just applied for aid, you won’t find any information on NSLDS yet. NSLDS receives data from schools, guaranty agencies and U.S. DOE programs. The NSLDS Website is generally available 24 hours a day, seven days a week. By using your PIN, you can get information on federal loan and Pell Grant amounts, outstanding balances, the status of your loans and disbursements made. You can access NSLDS at 

Office of Inspector General

Program Participation Agreement

The amount of money borrowed by the student. Interest is charged on this amount.

A promissory note is a document you must sign before you receive a student loan. The promissory note is a legally binding agreement to repay the loan. It lists the terms and conditions under which you agreed to repay the loan and explains your rights and responsibilities as a borrower. It will include information on how interest is calculated and what deferment and cancellation provisions are available to the borrower. It’s very important to read and save this document because you’ll need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearances.

Quantitative Percentage Standard

A regular student is one who is enrolled or accepted for enrollment at an institution for the purpose of obtaining a degree, certificate or other recognized education credential offered by that institution. Generally, to receive federal student financial aid from the programs discussed in this guide, you must be a regular student. There are exceptions to this requirement for some programs.

Southern Associations of Colleges and Schools

To be eligible to receive federal student financial aid, you must meet and maintain your school’s standards of satisfactory academic progress toward a degree or certificate offered by that institution. Check with your school to find out its standards.

After you apply for federal student financial aid, you’ll get your FAFSA results in an e-mail report within a few days after your FAFSA has been processed or by mail in a few weeks. This report is called a Student Aid Report or SAR. Your SAR details all the information you provided on your FAFSA. If there are no corrections or additional information you must provide, the SAR will contain your Expected Family Contribution (EFC), which is the number that’s used to determine your eligibility for federal student aid. Whether you applied online or by paper, we will automatically send your data electronically to the schools you listed on your FAFSA.

If you are a male born on or after Jan. 1, 1960, are at least 18 years old, and are not currently on active duty in the U.S. Armed Forces, you must register, or arrange to register, with the Selective Service System to receive federal student aid before your 26th birthday. (Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau are exempt from registering.) There is a checkbox on the FAFSA that allows you to register with the Selective Service System.

Student Educational Opportunity Grant

Supplemental Nutrition Assistance Program

Safety Notification Alert Process

Supplemental Loans to Students

Truth in Lending Act

United States Citizenship and Immigration Services

Veteran’s Administration