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Do some of the words used in the financial aid process sound like a foreign language? Yep…you’re not alone.

We’ve created this guide of terms you may encounter to be sure you’re on top of your game. The terms listed below are pretty universal among all colleges in the USA, but there may be terms specific to each college. Don’t be afraid to ask your admissions counselor/financial aid counselor what a certain acronym means or to explain something. Their goal is to ensure you are as informed as possible throughout the entire process.

Cost of Attendance (COA)

COA is more than just your tuition. It’s inclusive of tuition and an estimate for all of the extras like room and board, books, laptop, transportation, and other personal costs.

CSS Profile

Created by the College Scholarship Service (CSS), this is an additional form some schools require you to fill out in order to be considered for scholarships.

Entrance Loan Counseling (ELC)

ELC is mandatory when you take out both student and PLUS loans (through the government). This online training module goes over the terms of the loan, origination fees, interest rates, repayment options etc. There is tons of good info in here so be sure to pay close attention.

Expected Family Contribution (EFC)

The EFC is the total out of pocket amount that your family could reasonably contribute towards your college expenses. It is determined by your family size, the number of family members already enrolled in college (if any), and both taxable and non-taxable family income and assets. The EFC is calculated using the information you fill out on your FAFSA.

Free Application for Federal Student Aid (FAFSA)

Each year in college you will fill out the FAFSA for consideration for need-based aid. You will also need fill out the FAFSA if you wish to take out federal student loans to fund your education. The FAFSA typically opens October 1st for the following school year. If you are unmarried and under the age of 24, be sure to have your and your parents’ tax info from two years ago handy. More about the FAFSA here.

Gift Aid

AKA free money and the best kind of aid because it doesn’t have to be paid back. These will typically take the form of grants and scholarships. Ideally, you want all of your aid to fall into the “gift aid” category.

Master Promissory Note (MPN)

This is essentially your loan contract that states that you agree to pay back all of the money you have borrowed, including interest.


In the world of financial aid, need is defined as the difference between the cost of attendance and how much your family can afford to pay based on your FAFSA application.

Need-Based Aid

Need-based aid is determined solely based upon the need of your family. Your grades, community involvement, athletic prowess, etc. do not come into play. The amount of need-based aid will be generated by subtracting your expected family contribution from the cost of attendance.


When a college is need-blind, it does not consider an applicant’s financial need/status when making admissions decisions so they would never deny you because of your inability to pay full tuition. Fortunately, many schools are need-blind.

Origination Fee

An origination fee is a fee paid to the bank to compensate them for the cost of administering a loan. The fees are usually 3% of the amount disbursed. A portion of the money is paid to the federal government to also help offset its administrative costs.

Pell Grants

These are federally funded need-based grants that students are considered for based on their FAFSA application. These do not need to be paid back.

Parent Loans for Undergraduate Study (PLUS Loans)

Parents can apply for a PLUS loan up to the cost of attendance minus any other aid. Qualification for this loan is based upon a positive credit history. Parents must begin repayment on the plus loan once the loan is disbursed, but can request a deferment while the student is enrolled at least half-time in school. PLUS loans begin accruing interest as soon as they disburse.

Public Service Loan Forgiveness (PSLF)

Public Service Loan Forgiveness is a program where your remaining direct federal student loan debt can be forgiven after 120 payments under a qualifying repayment plan while employed by a qualifying governmental agency or non-profit organization.

Renewable Scholarship

A renewable scholarship is one that is awarded for more than one aid year. Renewable scholarships typically require a recipient to maintain certain academic standards. Some might require students to reapply every year.

Satisfactory Academic Progress (SAP)

In order to continue to receive aid, you must meet certain benchmarks such as credit completion, a certain GPA etc. Make sure you are aware of all of the specific requirements for your aid.

Student Aid Report (SAR)

You’ll receive this report via email after submitting the FAFSA. The SAR is your opportunity to review all of the information you have submitted and to make sure everything is accurate.

Subsidized Loans

Subsidized loans DO NOT accrue interest while you are still enrolled at least half-time status and for the following grace period. Repayment will begin 6 months after either graduation or dropping below half-time status.

Unsubsidized Loans

Unsubsidized student loans from the government begin accruing interest immediately upon disbursement. Repayment will begin 6 months after either graduation or dropping below half-time status. If you have the ability, consider making interest-only payments while you are in school so all of that interest doesn’t capitalize. Trust me, future you will be SOOO grateful!


If your FAFSA was selected for verification, don’t panic. About ⅓ of applications get selected, some at random, some because there was some sort of mismatching information on the application that requires further explanation. Each institution will let you know what paperwork is required to complete this process. Be sure to complete this ASAP because your financial aid package can’t be finalized until this is completed. If you’re chosen for verification, check out our tips.


A staple of many financial aid packages, work-study is a program that provides you the opportunity to earn money by applying for on-campus jobs. You typically will have to apply for these jobs, just as you would any other job. The salary is intended to help offset a portion of your cost-of-attendance. Most work-study jobs are generally no more than 20 hours/week.

We’ve created an app with more resources, like this one, where you can get help tailored to you as you go through the college process. Download it today to get started!