Defining Financial Aid Terms for Universities

Posted date: 19 Jul 2022

Even for the well-educated among us, understanding the college financial aid process may be difficult. Your college education is a huge investment and one that can be quite costly. Give yourself a basic education in postsecondary financial aid before you spend thousands of dollars on an advanced education. This article will provide you with a fast reference guide to the most commonly used and frequently misunderstood financial aid words.

Award letter

Your award letter, which should arrive in your inbox in mid-to-late April, describes your funding package from the college(s) to which you applied. But be cautious: Universities aren't compelled to use a standard template for award letters, and critical information, such as the cost of attendance, is frequently left out or misrepresented. Colleges frequently tend to underestimate the cost of transportation and textbooks or exaggerate the financial aid package.

Expected Family Contribution (EFC)

This is a measure of your family's financial strength, and it indicates how much of your college fees your family should expect to fund. This is determined using a system that takes into account taxable and nontaxable income, assets, and perks, as well as the size of your family and the number of siblings attending college throughout the year. Based on your FAFSA results, your expected family contribution is computed.

FAFSA (Free Application for Federal Student Aid) 

Fill out the FAFSA form. You've certainly heard of the FAFSA, but do you really understand what it is and how crucial it might be for you and your family? The initial step in the financial assistance process is to complete the FAFSA, which determines how much you or your family will contribute to your higher education. The FAFSA determines the level of student grants, work-study, and loans.

Federal student aid

Federal aid programs, which include government grants, loans, and work-study help, are the most common type of student aid in the United States. They are available to students at qualified post-secondary institutions (universities, vocational schools, and graduate schools).

Financial need

This is the portion of a student's total cost of attendance that is not covered by the projected family contribution or other outside grants and scholarships. To be qualified for need-based financial help, a student must demonstrate financial necessity.

Tuition reimbursement

Tuition reimbursement, commonly known as "tuition aid," is becoming increasingly prevalent. If you're studying a field that is relevant to your job, some businesses will reimburse you for your tuition. Tuition reimbursement can cover as little as one or two courses or as much as your complete education costs.

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GSP Admin