The world’s #1 Guide to Scholarships and Financial Aid

19.1. Glossary of Terms

Academic Scholarships: Awards based on academic achievement, such as high grades, test scores, or intellectual accomplishments, typically offered by schools or organizations.

Athletic Scholarships: Funding for students who excel in sports, often provided by colleges to recruit talented athletes for their teams.

Cost of Attendance (COA): The total estimated cost of attending a school, including tuition, fees, room, board, books, and personal expenses—used to determine financial aid eligibility.

Creative Arts Scholarships: Awards for students with talent in areas like visual arts, music, theater, or writing, often requiring a portfolio or performance submission.

CSS Profile: A financial aid application used by some colleges (mostly private) to award institutional aid, more detailed than the FAFSA and often with a fee.

Default: Failing to repay a loan according to its terms, which can lead to penalties, damaged credit, and wage garnishment.

Deferment: A temporary pause on loan payments, often granted for financial hardship or enrollment in school, during which interest may or may not accrue.

Dependent Student: A student who relies on parental financial support, as defined by FAFSA criteria (e.g., under 24, unmarried, no kids)—affects aid calculations.

Direct Loans: Federal student loans from the U.S. Department of Education, including Subsidized (need-based, no interest while in school) and Unsubsidized (interest accrues immediately).

Diversity and Inclusion Scholarships: Awards aimed at supporting underrepresented groups, such as minorities, women in STEM, or students with disabilities, to promote equity.

Employer-Sponsored Education Programs: Tuition assistance or reimbursement offered by companies to employees pursuing degrees, often tied to job relevance or retention.

Expected Family Contribution (EFC): A number from the FAFSA estimating what a family can contribute to college costs, used to determine need-based aid eligibility (replaced by Student Aid Index, or SAI, starting 2024–2025).

FAFSA (Free Application for Federal Student Aid): The form required to access federal grants, loans, and work-study, also used by many states and schools for their aid programs.

Federal Work-Study: A need-based program providing part-time jobs to students, typically on-campus, with earnings to help cover education costs.

Fellowships: Merit-based awards for graduate students, often funding tuition and living expenses, sometimes without work requirements—common in research fields.

Forbearance: A temporary pause or reduction in loan payments due to hardship, where interest continues to accrue, increasing the loan balance.

Grace Period: A set time after graduation or leaving school (usually six months) before federal loan repayments begin—interest may accrue on unsubsidized loans.

Grants: Financial aid that doesn’t require repayment, often need-based, such as Pell Grants from the federal government or institutional grants from schools.

Income-Driven Repayment (IDR): Federal loan repayment plans that cap monthly payments at a percentage of your income (e.g., 10%–20%), with forgiveness after 20–25 years.

Independent Student: A student not reliant on parental support per FAFSA rules (e.g., over 24, married, with dependents)—affects aid without parental data.

Interest: The cost of borrowing money, expressed as a percentage of the loan amount, which can be fixed (unchanging) or variable (market-driven).

Loan Forgiveness: Cancellation of remaining loan debt after meeting conditions, like working in public service for 10 years under PSLF.

Merit-Based Aid: Funding awarded for achievements or talents (e.g., grades, sports, arts), not financial need.

Need-Based Aid: Funding given based on financial hardship, determined by income and assets via forms like the FAFSA.

Pell Grant: A federal grant for low-income undergrads, up to $7,395 (in 2025), that doesn’t require repayment—awarded via the FAFSA.

PLUS Loans: Federal loans for graduate students or parents of undergrads, with higher limits but requiring a credit check and accruing interest immediately.

Private Loans: Loans from banks, credit unions, or companies, not the government, often with higher rates and fewer protections than federal loans.

Public Service Loan Forgiveness (PSLF): A program forgiving federal loan balances after 120 qualifying payments (10 years) for those in government or nonprofit jobs.

Research Grants: Funds for specific graduate projects (e.g., a dissertation), often from universities, government agencies, or foundations.

Scholarships: Monetary awards for education that don’t require repayment, based on merit, need, or specific criteria like major or background.

Student Aid Report (SAR): A summary of your FAFSA data, including your EFC, sent after submission—check it for errors before schools calculate aid.

Subsidized Loans: Federal loans where the government pays interest while you’re in school, during grace periods, and deferments—need-based only.

Tuition Reimbursement: Employer payments for education costs, often after you complete courses, typically with grade or tenure requirements.

Unsubsidized Loans: Federal loans where interest accrues from the start, available to all eligible students regardless of need.

Work-Study: See Federal Work-Study—a program blending aid and employment.