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what does financial aid mean? do i habe to pay it back?

can you break it down as to what financial aid is to me?

Thursday, August 09, 2007
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Definition of Financial Aid Terms

The following are common terms and their definitions in the world of financial aid.

Academic Year - time in which a full-time student should complete two semesters (24 hours), two trimesters, or three quarters at a college, university, technical or vocational school. Or it must be at least 36 quarter hours if a program is measured in credit hours.
Cost of Education - in addition to tuition, the cost of education includes room and board (on or off campus), books, supplies, transportation and miscellaneous fees.

Direct Lending - The Direct Lending Program is another approach to delivering educational loans to eligible student borrowers. The terms and conditions governing Direct Loans are similar to the Federal Family Education Loan Program (FFELP) program. The difference is that the federal government lends funds to eligible borrowers through the school, eliminating the role of lenders and guaranty agencies. Students repay their loans directly to the federal government. Not every school participates in this program. Check with the financial aid officer at your institution. If a school is a direct lender, it will determine how a federal student loan is obtained.

Enrollment Status - the number of credit hours being attempted by a student. Normally, students must be half-time or more to apply for scholarships. Individual programs will list this criteria.

Expected Family Contribution (EFC) - Using Federal Methodology and individual family size and finances, this figure is established to set an available income that can be used by a family for the student's education.

Federal Family Education Loan Programs - The Federal Family Education Loan Program (FFELP) was formerly known as the Guaranteed Student Loan (GSL) Program. The FFELP program includes the Federal Stafford Loans (subsidzied and unsubsidized), Federal PLUS Loans, and Federal Consolidation Loans. Funds for these programs are provided by private lenders and the loans are guaranteed by the federal government.

Free Application for Federal Student Aid (FAFSA) - The official document used by every college and university to determine eligibility for Federal Student Aid. A copy of this document is often required by a scholarship program.

Independent Student - Must meet one of the following conditions: twenty-four years of age or older; an orphan; a ward of the court; a veteran of the U.S. Armed Forces; is married; has a child; is a graduate or professional student; has serious family circumstances.

Need Analysis - The process of analyzing the household and financial information on the student's financial aid application and calculating the amount the family can be expected to contribute to educational costs. For the federal student assistance programs, the need analysis system is defined by law and results in a number known as the Expected Family Contribution.

Professional Judgement - While the method for determining the student's need for federal student aid is defined in the law, it does give the financial aid administrator the flexibility to make individual adjustments based on the administrator's professional judgement. Professional judgement can be used in three areas. The aid administrator can choose to override the student's dependency status to make the student independent, can adjust the components of the student's costs of attendance, and can adjust the data elements used to calculate the student's Expected Family Contribution. These adjustments must be made on a case-by-case basis, and the reasons for the adjustment must be documented in the student's file.

Renewal FAFSA Application - An application that simplifies the process of reapplying for financial aid. Some of the information from the student's previous year application is preprinted on the Renewal FAFSA application. Students do not have to enter new information if the preprinted information is still correct.

Satisfactory Academic Progress - Some scholarships can be taken away if a student is not making measurable progress towards the completion of a course of study. In order to qualify for renewal scholarships, satisfactory academic progress must be maintained.

Student Aid Report (SAR) - The federal "output document" printed by a FAFSA processor and mailed to the student. The SAR contains the family's financial and other information reported by the student on the financial aid application. The student's eligibility for aid is indicated by the EFC printed on the front of the SAR. Schools that participate in the Electronic Data Exchange and other services offered by the U.S. Department of Education can receive the information on the SAR through these services.

Transcript - All classes taken and all grades received by a student. An official transcript is sent by the school with an original signature of a school official.

Verification - A procedure whereby the school checks the information the student reported on the financial aid application, usually by requesting a copy of the tax returns filed by the student, and if applicable, the student's spouse and parent(s). Many schools conduct their own form of verification. In addition, schools must verify students selected through the federal central processing system, following the procedures established by regulation. The FAFSA processor will print an asterisk next to the EFC (on the Student Aid Report) to identify students who have been selected for verification.

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Financial aid is a broad term that covers many different ways of paying for a college education. Included are scholarships which the student doesn't repay, jobs to help the student pay for college, and loans that the student or parents must repay. Check the colleges you'd like to attend to see what financial aid packages they'll offer you. Also check this site for more information.

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