Financial Aid Definitions

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Academic Year

A period of time used to measure a quantity of study. For example, a school’s academic year may consist of a fall and a spring semester during which a full-time undergraduate student must complete 24 semester hours. Academic years vary from school to school and even from educational program to educational program at the same school.


The process by which interest accumulates on a loan. When interest "accrues" on a loan, the interest due on the loan is accumulating.

Award Letter

The award letter states the types and amount of financial aid that GS will provide to matriculating students.



Individual who signed and agreed to the terms in the promissory note and is responsible for repaying a loan.



With certain loans, such as subsidized Federal Direct Loans, the U.S. Department of Education pays the interest that accrues on these loans while the student is enrolled at least half-time and during periods of deferment. However, with subsidized loans in forbearance, unsubsidized loans, or PLUS Loans, the student or the student’s parents and graduate or professional degree students are responsible for paying interest as it accrues on these loans.

When the interest is not paid, it is capitalized or added to the principal balance, which increases the outstanding principal amount due on this loan. Interest that is capitalized and, therefore, added to the original amount of the loan subsequently accrues interest, adding an additional expense to the loan.


The process of combining one or more loans into a single new loan.

Continuing Student

Continuing students are those who have completed at least one semester at GS. Students on leave of absence who have not been enrolled for 1-3 years are considered continuing students and, if planning to return in the upcoming academic year, should apply for financial aid by the published deadlines.

Students on leave of absence who have not been enrolled for more than 3 years or who have had to reapply for admission are not considered continuing students and may apply by the published deadlines for new students.

Cost of Attendance

The total amount it will cost a student to go to school—usually expressed as a yearly figure. The COA includes tuition and fees, living expenses, and allowances for books, supplies, transportation, loan fees, and other miscellaneous expenses.



Failure to repay a loan according to the terms agreed to when a student signed a promissory note. For the FFEL and Direct Loan programs, default is more specific—it occurs if a student fails to make a payment for 270 days (if on a monthly repayment schedule) or 330 days (if a student is on a less frequent payment schedule).

The consequences of default are severe. A student's school, lender or agency that holds their loan, and the state and federal government may all take action to recover the money, including notifying national credit bureaus of the student's default. This may affect a student's credit rating for as long as seven years.

In addition, the Internal Revenue Service can withhold a student's U.S. individual income tax refund and apply it to the amount owed, or the agency holding a student's loan may ask their employer to deduct payments from their paycheck. In addition, a student may be liable for loan collection expenses. Students in default who return to school are not entitled to receive additional federal student financial aid, and legal action may also be taken against them.

In many cases, default can be avoided by submitting a request for a deferment, forbearance, discharge, or cancellation and by providing the required documentation.

Dependent Student

A student who does not meet any of the criteria to be considered an independent student.


    Payment of loan proceeds by the lender. During consolidation, this term refers to sending payoffs to the loan holders of the underlying loans being consolidated.


      Eligible Noncitizen

      To receive federal financial aid, students must fall into one of the following categories:

      • U.S. citizen
      • U.S. national (includes natives of American Samoa or Swain’s Island)
      • U.S. permanent resident who has an I-151, I-551, or I-551C (Permanent Resident Card)

      Eligible noncitizens who wish to receive federal aid must have an Arrival-Departure Record (I-94) from U.S. Citizenship and Immigration Services (USCIS) showing one of the following designations:

      • "Refugee"
      • "Asylum Granted"
      • "Cuban-Haitian Entrant, Status Pending"
      • "Conditional Entrant" (Valid only if issued before April 1, 1980)
      • Victims of human trafficking, T-visa (T-2, T-3, or T-4, etc.) holder
      • "Parolee" (Student must be paroled into the United States for at least one year and able to provide evidence from the USCIS that they are in the United States for other than a temporary purpose and intend to become a U.S. citizen or permanent resident)

      Students who only have a Notice of Approval to Apply for Permanent Residence (I-171 or I-464) are not eligible for federal student aid.

      Students in the United States on certain visas, including F1 or F2 student visas, orJ1 or J2 exchange visitor visas, are not eligible for federal student aid.

      Also, persons with G series visas (pertaining to international organizations) are not eligible. For more information about other types of visas that are not acceptable, GS financial aid applicants should consult a financial aid counselor in the Office of Educational Financing.

      Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau are eligible only for Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, or Federal Work-Study, and should consult the Office of Educational Financing for more information.

      Eligible Program

      A program of organized instruction or study that leads to an academic, professional, or vocational degree or certificate, or other recognized educational credential. To receive federal student aid, students must be enrolled in an eligible program, with two exceptions:

      • Students who are required to take certain courses to qualify for admission into one of a school's eligible programs can get a Federal Direct Loan for up to 12 consecutive months while completing that preparatory course work. Students must be enrolled at least half time, and must meet the usual student aid eligibility requirements.
      • Students enrolled at least half time in a program to obtain a professional credential or certification required by a state for employment as an elementary or secondary school teacher can get Federal Work-Study or a Federal Direct Loan, or their parents can get a PLUS Loan, while the student is enrolled in that program.

      Expected Family Contribution (EFC)

      EFC is the figure used to determine a student's eligibility for federal student financial aid, and is derived from the financial information provided on the FAFSA application. EFCs are reported to students on the Student Aid Report (SAR).


      Federal Family Education Loan Program (FFEL)

      FFEL Loans include subsidized and unsubsidized FFEL Direct Loans, FFEL Plus Loans, and FFEL Consolidation Loans. Borrowers repay these loans to the bank or private lender that provided the loan.

      Financial Aid Package

      The total amount of financial aid (federal and non-federal) a student is offered by the school. The financial aid administrator at a postsecondary institution combines various forms of aid into a “package” to help meet a student’s education costs. Using available resources to give each student the best possible package of aid is one of the aid administrator’s major responsibilities. Because funds are often limited, an aid package might fall short of the amount a student needs to cover the full cost of attendance. Also, the amount of federal student aid in a package is affected by other sources of aid received (scholarships, state aid, etc.).


      Grace Period

      After borrowers graduate, leave school, or drop below half-time enrollment, loans that were made for that period of study have several months before payments are due. This period is called the "grace period."

      During the grace period, no interest accrues on subsidized loans. Interest accrues on unsubsidized loans during grace periods, and this interest is capitalized when borrowers' loans enter repayment (if not paid in advance).

      Guaranty Agency

      The guaranty agency is an organization that administers the Federal Family Education Loan (FFEL) Program in a student's state. This agency is the best source of information on FFEL Loans. Students may contact the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) to find the contact information for the agency serving their state.



      At GS, half-time enrollment is enrollment in at least six points per semester. Students must attending at least half-time to be eligible for a Federal Direct Loan. Half-time enrollment is not a requirement to receive aid from the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, or the Federal Work-Study Program.


      Independent Student

      An independent student meets at least one of the following criteria:

      • At least 24 years old
      • Married
      • A veteran or member of the U.S. armed forces
      • An orphan
      • A ward of the court
      • Someone with legal dependents other than a spouse


      A loan expense charged by the lender and paid by the borrower for the use of borrowed money. The expense is calculated as a percentage of the unpaid principal.


      National Student Loan Data System (NSLDS)

      NSLDS is the database for students to learn more about federal student financial aid they have received, including federal loan and Pell Grant amounts, outstanding balances, and the status of loans and disbursements made. Students who have recently applied for aid will not find any information on NSLDS. NSLDS receives data from schools, guaranty agencies, and U.S. Department of Education programs. The NSLDS website is generally available 24 hours a day, seven days a week.

      Need Analysis

      The process of analyzing a student's financial need, known as need analysis, focuses on determining how much the student's family can reasonably be expected to contribute towards the student's education. Traditionally, determination of an applicant's need is achieved by collecting information about the family's income, assets, and living expenses. For federal student aid programs, the law specifies a need analysis formula that produces the Expected Family Contribution (EFC). The EFC and the college's cost of attendance are used to establish the student's need, as well as to award grants, campus-based aid, and subsidized loans.



      The amount of money borrowed by the student. Interest is charged on this amount.

      Promissory Note

      A promissory note is a binding legal document signed when obtaining a student loan. It lists the conditions under which a student borrows and the terms under they agree to pay back the loan. It will include information on how interest is calculated and what deferment and cancellation provisions are available to the borrower. It is very important for students to read and save this document, so that they may refer to it later when they begin repayment, or for when they need information about provisions of the loan, such as deferments or forbearances.


      Satisfactory Academic Progress

      To be eligible to receive federal student financial aid, students must meet and maintain standards of satisfactory academic progress toward a degree or certificate offered, as defined by the institution. Visit the Academic Standards page for information specific to GS students.

      Selective Service Registration

      To be eligible for federal financial aid, students must register with the Selective Service if they meet all of the following criteria:

      • You are a male born on or after January 1, 1960
      • You are at least 18 years old
      • You are not currently on active duty in the U.S. Armed Forces

      Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau are exempt from registering.

      Student Aid Report (SAR)

      The Student Aid Report (SAR) summarizes the information a student submits on the Free Application for Federal Student Aid (FAFSA), and provides a student's Expected Family Contribution (EFC).

      Students will receive their SAR in an email report one business day after the application is processed, or by mail within 7-10 days. Whether a student applies online or via mail, data will be sent electronically to the schools listed on the FAFSA.


      A loan for which a borrower is not responsible for the interest while in an in-school, grace, or deferment status. Subsidized loans include Direct Subsidized Loans, Direct Subsidized Consolidation Loans, Federal Direct Subsidized Loans, and Federal Subsidized Consolidation Loans.



      A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan. Unsubsidized loans include Direct Unsubsidized Loans, Direct PLUS Loans, Direct Unsubsidized Consolidation Loans, Federal Direct Unsubsidized Loans, Federal PLUS Loans, and Federal Unsubsidized Consolidation Loans.



      Verification is a process in which a school confirms the data reported by a student on their FAFSA. A student's school has the authority to contact the student for documentation that supports income and other information reported.