GLOSSARY OF TERMS

When applying for financial aid, parents and students often find themselves overwhelmed with unfamiliar terms and labels that sound like alphabet soup. In order to better understand the information supplied in this section, a glossary of the most commonly used terms is offered along with current information on percentage rates and dollar limits on specific grants and loans.

¨ GRANT – Money given by a college, government agency, or private group that is a gift and does not need to be paid back.

¨ SCHOLARSHIP – Money given by a college, government agency, or private group that is a gift, often based on outstanding academic achievement or a specific talent. The money does not need to be paid back; however, a specific academic grade point average may be required in order to renew the scholarship each year.

¨ STIPEND – A monetary award that does not need to be repaid. This term is often synonymous with Grant or Scholarship.

¨ LOAN – Money given by a college, government agency, bank or private group that must be paid back.

¨ NEED-BASED AID – Grants, loans, or scholarships given to eligible students on the basis of demonstrated financial need.

¨ EXPECTED FAMILY CONTRIBUTION – (EFC) The estimated amount that your family will be able to pay towards your college expenses. Your family contribution will remain constant for the year, but your need will vary depending on the college you choose to attend and the total cost at the college. Family contribution must be recalculated each year.

¨ NEEDS ANALYSIS – A standardized mathematical calculation that takes into consideration a family’s income, assets, and other financial circumstances to produce an estimate of the amount the family will be able to pay towards college expenses. The amount of money that a needs analysis indicates a family should be able to pay is often more that the family believes they can afford to pay. It becomes important to list any extenuating circumstances that prevent the family from being able to contribute the recommended amount.

Cost of Education

-Expected Family Contribution

=Financial Need

¨ FINANCIAL AID PACKAGE - The mixture of grants, loans, scholarships, jobs, and other funds that is put together by the financial aid office at a particular college for the student.

¨ FEDERAL STAFFORD LOAN – Formerly know as the Guaranteed Student Loan. There are two kinds of loans: subsidized (direct Stafford Loan) and unsubsidized (Federal Family Education Loan. The subsidized loans are a need-based loan that accrues no interest until you begin repayment six months after leaving school. The unsubsidized loan is non-need based. Interest accrues upon receipt of the money. Both loans have an 8.25% interest cap.

¨ FEDERAL PERKINS LOAN – Formerly known as the National Direct Student Loan. This is a need-based, interest-free loan administered by the college attending. The current interest rate of 5% and re-payment begins nine months after the student leaves school or drops below half time, but it is administered by the colleges themselves and is limited by their allotted funds. Students may borrow up to $4,000.00 a year.

¨ FEDERAL PELL GRANT – A Federal program offering award up to $3000+ to students who are able to demonstrate financial need. This is the only program where students may be eligible even though they attend school less than half time.

¨ PLUS – Federal Parent Loan for Undergraduate Students. This loan is a way for parents to spread out college payments. It has a 9% interest cap and repayment begins 60 days after the loan is taken out. The amount is based on the cost of attendance at a particular college minus any financial aid received.

¨ FEDERAL SEOG – Supplemental Educational Opportunity Grant. Although federally funded like the Pell Grant, the SEOG is administered by individual colleges and not the government. It is called “supplemental” because it is usually awarded in addition to the Pell Grant to students with substantial need. Awards range from $100.00 to $4,000.00 per year.

¨ FWS – Federal Work—Study. A federal program helping schools provide part-time jobs during the school year for needy students. Students must apply to get the jobs through the college. Wages must at least equal the federal minimum wage, but they may be higher.

¨ STATE OF KANSAS STUDENT AID APPLICATION – Application form required to apply for the Kansas Ethnic Minority Scholarship, Kansas Nursing Scholarship, Kansas State Scholarship, and the Kansas Teacher Scholarship.

¨ FAFSA – Free Application for Federal Student Aid. The primary application form determining eligibility for all Federal grants and loans. Some colleges require an additional financial aid form be submitted for their financial aid awards. Other colleges use only the FAFSA. It must be submitted after January 1.

¨ SAR – Student Aid Report. Mailed to parents after a FAFSA is submitted. This report contains the information you give on your FAFSA plus your expected family contribution (EFC). A subsequent form may be needed for some student loans.

¨ PROFILE – A financial aid profile service offered by ACT. It provides the form and questions that must be completed to apply for private aid at schools that use the service. The service costs $5.00 to register and $18.00 for each college that receives the report. The colleges that want this report are listed on the Profile application, but most schools do not use this report.

¨ AMERICAN COLLEGE TESTING PROGRAM – Organization that offers the ACT, PLAN, and other educational programs.

¨ ACT – The college admissions test administered by The American College Testing Program. The test measures achievement in the areas of English, math, reading, and science reasoning. This is the test used for admission and placement decisions by all Kansas schools and most schools outside Kansas. It is recommended that students take the ACT in the spring of their junior year and again in the fall of their senior year.

¨ PLAN – The preliminary ACT. This test is used to assess strengths and weaknesses in the four areas of achievement tested by the ACT. It is also used as an interest inventory for career exploration. This test is normally offered in the sophomore year as a preparatory stage before the final two years of high school.

¨ THE COLLEGE BOARD – A non-profit membership organization composed of over 2,500 colleges, school systems, and education associations. They run the Admissions Testing Program that offers SAT I and SAT II, AP tests, PSAT, and the Financial Aid Profile Service.

¨ SAT I – The Scholastic Aptitude Test. The college admissions test administered by The College Board. The SAT I measures aptitude in the areas of verbal and mathematical reasoning. This admissions test is used primarily by highly competitive schools and schools nearer the East and West coasts. Most students will not need to take this test.

¨ SAT II – Achievement tests administered by The College Board and some competitive schools. Students need to check to see what achievement tests are requested by the schools to which they are applying. The schools who require subject level tests usually want three tests, including one in English proficiency and one in math.

¨ PSAT – The Preliminary Scholastic Aptitude Test. This is administered by The College Board and is a shortened version of the SAT I. It is given in the fall of the junior year in high school so that a student can assess his/her strengths and weaknesses in order to better prepare for the SAT I. It is also the entry-level test for the National Merit Scholarship Competition, the National Hispanic Scholar Program, and The National Achievement Scholarship Program for Outstanding Negro Students.