Glossary of Financial Aid Terms

Glossary of Financial Aid Terms

Academic Year: Measure of the academic work to be accomplished by a student each year as defined by a post-secondary institution, which has two semesters that contain at least 30 weeks of instructional time in which a full-time student is expected to complete at least 24 semester credits. An academic year may be different various academic programs. Students should check with their academic department or school for details regarding their academic calendar.

Accrued Interest: Interest that accumulates on the unpaid loan balance.

Assets: Financial information that makes up you and your family’s net worth, like investments, stocks, bonds, and more.

Award Year: Period of time between fall term and the end of the following second summer session. An award-year may be different various academic programs and their academic calendar. Students should check with their academic department or school for details regarding their academic calendar.

Business Value: Market value of land, buildings, machinery, equipment, and inventory.

Campus-Based Programs: Collective term that refers to the Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) program.

Capitalizing Interest: Adding unpaid, accumulated interest to the loan principal, increasing the total loan payment.

Central Processing System (CPS): System that receives your need analysis data. CPS calculates your official Expected Family Contribution (EFC).

Compliance: Statement on the Free Application for Federal Student Aid (FAFSA) in which students certify with their signature that they will use funds only for educational expenses and that they are registered with Selective Service, if required.

Cost of Attendance (COA): Cost to attend year of college.  The components include tuition, fees, housing, food, transportation, books and supplies, personal expenses, and other costs, depending on individual choices.

Credit Balance: Amount remaining in your Howard University student account after payment of allowable campus charges.

Default: Failure to repay a loan according to the terms of the promissory note. For a loan repayable in monthly installments, a loan is in default after 180 days of nonpayment.

Deferment: Temporary postponement of loan payments for a limited period of time. Deferments, allowed for specific borrower activities, extend the loan repayment period by the length of the deferment period.

Delinquency: Occurs when payments are late or missed, as specified in the terms of the promissory note and the selected repayment plan.

Dependent Student: Students aged under 24 whose parents’ income is used in calculating their family’s expected contribution.

Disbursement: The release of financial aid funds to individual student accounts; funds are disbursed when the student's financial aid file is complete, and registration has been verified; when loan proceeds are paid by the University to the borrower.

Discharge: Release of borrowers from their obligations to repay their Direct Loans when they have met certain requirements.

Disclosure Statement: Statement of the actual cost of a loan, including the interest costs and the loan fee.

Direct Loans: Student loans offered by the federal government under the Federal Direct Loan program.

Eligible Non-Citizen: U.S. permanent resident with an Alien Registration Receipt Card (I-551), a conditional permanent resident (I-551C), or any other eligible non-citizen with an Arrival-Departure Record (I-94) from the Department of Homeland Security showing any of the following: "Refugee," "Asylum Granted," "Parole," or "Cuban-Haitian Entrant."

Expected Family Contribution (EFC): Portion of student and student’s family financial resources that should be available to pay for student’s education.

Entrance/Exit Interview: Counseling sessions that borrowers attend before receiving their first loan disbursement and, again, before leaving school.

Free Application for Federal Student Aid (FAFSA): Federal form that must be completed to be considered for all federal student aid.

Federal Methodology: Formula, defined by statute, used to determine the expected family contribution (EFC) for federal financial aid.

Federal Processor: Federal government's system that analyzes the FAFSA, calculates the family’s contribution, and sends students a copy of their Student Aid Report (SAR).

Financial Aid: Financial assistance in the form of scholarships, grants, fellowships, employment opportunities and educational loans from federal, state, and private sources.

Financial Aid Hold: Prevents your financial aid from paying fees or being disbursed to you.

Financial Aid Package: Combined offer of financial aid, possibly including a grant, loan, and/or work-study.

Financial Eligibility: Aid you may be eligible to receive, calculated from college costs minus your EFC.

Financial Aid Award Notice (FAAN): a letter to you from Howard University that lists the types of and amounts of aid offered and the terms and conditions of that aid.

Forbearance: Arrangement to postpone or reduce a borrower's monthly payment amount for a limited and specified period, or to extend the repayment period. The borrower is charged interest during a forbearance.

Full-Time Student: Undergraduate student taking a minimum of 12 credits per term or graduate student taking a minimum of 9 credits per term.

Gift Aid: Aid that doesn’t have to be repaid, like scholarships and grants.

Grants: Educational funds that do not require repayment from present or future earnings.

Grace Period: Period between the time borrowers leave school or drop below halftime study and the time they must begin repaying their loans usually six to nine months, depending on the type of loan.

Half-time Student: Undergraduate student taking at least 6 credits, or a graduate student taking at least 4 credits per term during the academic year.

Income: Amount of money received from any or all of the following: wages, interest, dividends, sales, or rental property or services, business or farm profits, certain welfare programs, disability, inheritance, gambling and contest winnings, retirement benefits and other types of taxable income.

Independent Student: Students aged under 24. Additional criteria include student is married, a graduate or professional student, have legal dependents other than a spouse, are an orphan or ward of the court (or were a ward of the court until age 18); or a veteran. (See the FAFSA for additional details.)

International Student Financial Aid Application (ISFAA): Institutional form that must be completed by international students so thy can be considered for institutional student aid.

Interest Rate: Cost paid to borrow money; may be fixed or variable.

Legal Dependent (for dependency determination): Child or person (other than a spouse) who lives with and gets more than half of his or her support from the student and will continue to receive that support during the school year.

Legal Guardian: Court appointed individual whose guardianship responsibilities include using personal financial resources to support the person in his or her charge.

Less Than Half-time Student: Undergraduate student taking less than half-time credits but a minimum of 1 credit per term.

Loan: Funds students repay over time once they have graduated or leave school.

Loan Principal: Total sum of money borrowed.


Merit-based Aid: Assistance that is awarded because of a student's achievements or talent in a particular area (e.g. academics or athletics).

Need: Difference between Howard University's cost of attendance and a student's (and family's) ability to pay. Ability to pay is represented by the EFC.

Need Analysis: System used to estimate a family's ability to pay for postsecondary education; one of the necessary steps in establishing a student's need for financial assistance.

Origination Loan Fee: Fee charged by the federal government and deducted from the loan proceeds before disbursement to help reduce the cost of supporting low interest loans.

Overaward: a situation in which the student's financial aid exceeds the calculated financial need. Federal student aid programs do not allow overawards.

Parent Share: Student college costs, minus what student contributes (gift aid, work study, loans, and student’s share). Parent share may be met with a PLUS loan.

Prepayment: Any amount paid on a loan by the borrower before it is required to be paid under the terms of the promissory note. There is no penalty for prepaying principal or interest on Direct Loans.

Principal: Amount a person borrows (which may increase as a result of capitalized interest) and the amount on which interest is paid.

Promissory Note: Legal and binding document between a borrower and lender, which includes the terms and conditions for repayment of a loan.

ReaffirmationA student who has inadvertently overborrowed may also regain Title IV eligibility by making satisfactory repayment arrangements acceptable to the servicer of the loan. See our reaffirmation policy for further detail.

Repayment Schedule: Statement that lists the amount borrowed, the amount of monthly payments, and the date payments are due.

Revisions: Changes to a financial aid award due to changes in eligibility, EFC, or types of aid available.

Satisfactory Academic ProgressAcademic standard, as determined by Howard University in compliance with federal regulations, that a student must meet to continue receiving financial aid.

Scholarships: Educational funds that do not require repayment from present or future earnings and are usually awarded on the basis of merit.

Servicer: Company employed by the federal government to perform administrative tasks involved with loans.

Student Aid Report (SAR): Notification sent to the student that summarizes the information reported on the FAFSA.

Student's Share: Student’s contribution the cost of attending school. This may come from work-study, loans, savings, or summer earnings.

Three Quarter-time Student: Undergraduate student taking 9-11 credits per term.

Variable Interest: Rate of interest on a loan that is tied to a stated index and changes annually.

Verification: Process to confirm an individual student's application data.

Work-Study: Federal or institutional employment programs that subsidize wages for needy students to help them pay for educational expense.