The Office of Scholarships and Financial Aid uses a number of special terms and acronyms . The following list may assist you in understanding financial aid communication and provide familiarity with commonly used terms:
Admitted student: A student who has completed an application for admission and submitted high school transcripts, ACT or SAT test scores and any other documents requested by the Admissions Office for consideration. Students must be admitted into a degree-granting program in order to be considered for financial aid.
Award notice: The notification sent from the Office Of Scholarships and Financial Aid to a student indicating the kinds and amounts of financial aid being held in reserve for the student. The types and amounts of aid will be distributed over each semester of anticipated enrollment (i.e. Fall and Spring).
Budget: (also referred to as Cost of Attendance) An estimate of the costs facing a student for an academic period. The estimate includes both direct educational costs (tuition, fees, books and supplies) and indirect costs (room, board, transportation, and personal expenses).
Budget Adjustment: An adjustment to the standard Cost of Attendance for higher-than-average expenses. Example: average tuition is based on 14-15 credit hours. A student enrolled for 18 credit hours may request an adjustment of his or her budget to cover the actual tuition cost.
Campus-based program: A financial aid program authorized by state or federal government where the institution of higher education administers the aid funds. Michigan Educational Opportunity Grant is a state campus-based program; Supplemental Educational Opportunity Grant, Work Study Program, and Perkins (NDSL) are federal campus-based programs.
Completed Financial Aid Application: A combination of forms received in the Office of Scholarships and Financial Aid for admitted students. The financial aid application begins with the FAFSA and includes any supporting documents requested from the Office of Scholarships and Financial Aid.
Cost of Attendance: (also referred to as Budget) An estimate of the costs facing a student for an academic period. The estimate includes both direct educational costs (tuition, fees, books and supplies) and indirect costs (room, board, transportation, and personal expenses).
Default: To default means you failed to make your student loan payments as scheduled according to the terms of your promissory note, the binding legal document you signed at the time you took out your loan.
Direct Costs: Charges that are payable directly to the University such as tuition and fees, and room and board for students living on-campus.
Exit Counseling: Reviews your responsibilities when you graduate, leave school or drop below half-time enrollment and provides information about repaying student loans. This includes an explanation of your grace period, repayment options, how to avoid delinquency/default, and options for deferment and forbearance.
Expected Family Contribution (EFC): The EFC is a number determined by the federal processor after analyzing financial data provided by the student/family on the FAFSA. The EFC is used to determine student's eligibility for Pell Grant and other need-based forms of financial aid. The EFC is not necessarily an indicator of a student/family's actual out of pocket expense.
Federal Work Study: The Federal Work-Study Program provides employment for financially needy students to help meet educational expenses. Funds for the program are jointly provided by the federal government and the institution providing employment. Students work on campus and are paid hourly wages for the number of hours they work.
FAFSA: Free Application for Federal Student Aid. The form utilized by the U.S. Department of Education to collect financial data from a student and/or family.
Federal Methodology: A complex federal formula used to take student/family income and asset information and convert it into an estimate of the student/family contribution (EFC) to determine eligibility for financial aid.
Financial aid package: A combination of financial aid programs tailored to the student's individual circumstances and financial need. A financial aid package may include one or more of three types of aid — grants, loans and work study. Financial aid cannot exceed the estimated Cost of Education or Budget.
Financial aid transcripts: Records of previous financial assistance maintained by offices of financial aid at all other colleges and universities a student has attended.
Financial need: An amount determined by subtracting the student/family contribution and other resources from the cost of education. Students cannot receive need-based aid in excess of their financial need.
Gift Aid: Financial aid that does not have to be repaid. Gift aid is typically awarded in the form of need-based grants, scholarships, employee tuition waivers or other programs such as TIP (Tuition Incentive Program). If repayment is not required, it is considered gift aid.
Grace period: The grace period is a set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan(s). The grace period allows you time to get financially settled and to select your repayment plan. Note that for most loans, interest will accrue during your grace period.
Grant: A form of gift aid which does not have to be repaid. Grants are awarded on the basis of financial need.
Indirect Costs: Expenses associated with education that are not necessarily billed by the University. An example of indirect costs would be books and supplies, transportation expenses, and personal expenses.
Loan Consolidation: Combining multiple federal student loans resulting in a single monthly payment toward a Direct Consolidation Loan instead of multiple payments toward several different loan balances.
Loan Forgiveness: Under certain limited circumstances, such as in the event of permanent disability of the borrower, the federal government will cancel all or part of an educational loan. This practice is called Loan Forgiveness.
Loan Servicer: Loan servicers are private companies that manage federal Direct Loans for the Department of Education. Loan servicers are responsible for coordinating loan repayment including deferments and payment plans. You will receive notification from your loan servicer once you approach repayment.
Master Promissory Note (MPN): A legally binding document between you and the federal government indicating the conditions and borrower obligations of a loan. The MPN is a multi-year note, allowing the borrower to complete the note once and to borrow in subsequent years without completing an additional note.
Need-based financial aid: Financial aid awards which are determined exclusively on the basis of financial need. The formula for determining financial need is Cost of Attendance minus (-) EFC equals = need.
Net Cost: The difference between the Cost of Attendance and the total financial aid award package offered to the student, which includes loans which have to be repaid.
NSLDS: National Student Loan Data System. A national database maintained by the U.S. Department of Education containing detailed information regarding a student's financial aid history.
Out of Pocket Expense: The difference between the Cost of Attendance and the amount of gift aid, if any, awarded to the student. Out of pocket expenses are the amount a family must pay, earn or borrow to cover college costs.
Parent PLUS Loan: Federal Parent PLUS Loan for parents of Undergraduate Students. The Parent PLUS Loan is a loan that parents may borrow to assist in paying educational costs for their dependent student. Parent PLUS Loans are the responsibility of the parent borrower(s) on the loan and never convert to student loans.
Personal Expenses: Personal expenses are included in the net cost of attendance to allow students to obtain enough financial aid to cover them, if they choose. Personal expenses may include things like toiletries (shampoo, deodorant, make-up), hair cuts, clothing, entertainment, etc.
Personal Information Number (PIN): A unique code assigned to each student and/or parent of a dependent student (parent financial information is required on the FAFSA) by the U.S. Department of Education which acts as an electronic signature. Students and parents are encouraged to save their PIN's in a secure location for future years' renewal FAFSAs. PIN numbers are also used to sign electronic loan documents for Direct student loans and Parent PLUS Loans.
Repayment Plan: Agreement between the borrower and the loan servicer that identifies the terms of loan repayment. This includes required payment agreements, length of repayment, and interest rate.
SAR: Student Aid Report. A summary statement provided by the Federal processor detailing information provided by the student on the FAFSA.
Scholarship: A form of aid which is not repaid and is usually awarded on the basis of academic merit or special talent.