Reference · Financial Aid
Financial Aid Glossary
40 terms that control how much college actually costs, defined with worked examples using real dollar amounts and named schools.
A
- Admitted Student DayAn on-campus event hosted by a college after acceptance, designed to convert admitted students into enrolled students by showcasing campus life, financial aid resources, and academic programs.
- Award LetterThe official document a college sends after admission that breaks down the student’s financial aid package, including grants, scholarships, loans, and work-study, along with the estimated Cost of Attendance and the family’s expected out-of-pocket cost.
C
- Cost of AttendanceThe total annual cost of attending a college as published by the school, including tuition, fees, room, board, books, supplies, transportation, and personal expenses. This is the ceiling above which total financial aid cannot exceed.
- Cost of Attendance AppealA formal request to a college’s financial aid office to increase the published Cost of Attendance for a specific student due to documented expenses that exceed the school’s standard budget allowances, such as medical costs, disability accommodations, or unusual transportation needs.
- CSS ProfileA supplemental financial aid application administered by the College Board, required by approximately 250 colleges (mostly selective privates) in addition to the FAFSA, that collects more detailed financial information including home equity, non-custodial parent income, and small business assets.
D
- Demonstrated InterestA factor some colleges use in admissions decisions that measures how actively a student has engaged with the school through campus visits, email opens, information sessions, admitted student days, and other tracked interactions.
- Departmental AwardA scholarship offered by a specific academic department or school within a university, separate from the institution’s general merit aid tiers, typically requiring admission into that department’s program and sometimes a separate application or audition.
E
- Early ActionA non-binding early application deadline (typically November 1 or November 15) that gives students an admissions decision by mid-December or January without requiring a commitment to attend, leaving the student free to compare offers through May 1.
- Early DecisionA binding early application commitment (typically due November 1) where the student agrees to attend if admitted and withdraw all other applications. Early Decision generally offers higher admit rates but eliminates the ability to compare financial aid offers.
- Emancipated MinorA student under 18 who has been legally declared independent from their parents or guardians by a court, which affects FAFSA dependency status and can qualify the student to file as an independent student with only their own income and assets considered.
- Expected Family ContributionThe former name for the Student Aid Index (SAI), used on FAFSA applications before the 2024-2025 cycle. The EFC represented the minimum amount a family was expected to contribute toward college costs based on income, assets, and household size.
F
- FAFSAThe Free Application for Federal Student Aid, a federal form that every family must file to qualify for federal grants (Pell), federal loans, work-study, and most state and institutional need-based financial aid.
- Formula MeritMerit scholarships awarded automatically based on a published formula of GPA and test scores, without a separate application, essay, or interview. The student meets the threshold and receives the award upon admission.
H
- Holistic AdmissionsAn admissions review process that evaluates the whole student profile, including academics, extracurriculars, essays, recommendations, demonstrated interest, background, and personal qualities, rather than relying solely on GPA and test scores.
- Holistic MeritMerit scholarships awarded through a committee review of the student’s full application, including essays, activities, leadership, recommendations, and background, rather than solely based on a published GPA and test score formula.
I
L
M
- Meets Full NeedA financial aid policy where the school commits to covering 100% of a student’s demonstrated financial need (COA minus SAI) through grants, scholarships, work-study, and sometimes loans, without leaving a gap between aid and need.
- Merit AidFinancial aid awarded by a college based on academic achievement, talent, or other desirable qualities rather than financial need. Merit aid reduces tuition regardless of the family’s ability to pay.
- Merit ThresholdThe minimum GPA and/or test score a student must reach to qualify for a specific automatic merit scholarship tier at a given school. Falling below the threshold, even by a small margin, typically drops the student to the next lower tier or out of merit eligibility entirely.
N
- Need-Aware AdmissionsAn admissions policy where the school considers a student’s ability to pay when making admissions decisions, meaning students who need financial aid may be at a disadvantage compared to full-pay applicants, particularly near the margins of admission.
- Need-Based AidFinancial aid awarded based on the family’s demonstrated financial need, calculated as the difference between the school’s Cost of Attendance and the Student Aid Index (SAI) from FAFSA or the CSS Profile assessment.
- Need-Blind AdmissionsAn admissions policy where the school does not consider a student’s financial situation or ability to pay when making admissions decisions. The admissions committee reviews the application without knowing whether the student filed for financial aid.
- Net PriceThe actual out-of-pocket cost a family pays for one year of college after subtracting all grants and scholarships from the Cost of Attendance. Loans and work-study are not subtracted because they represent debt or earned income, not free aid.
- Non-Custodial ParentIn the context of financial aid for divorced or separated families, the parent who does not file the FAFSA. On the CSS Profile, CSS schools may require a separate Non-Custodial Parent Profile to assess the other parent’s ability to contribute.
O
- Outside ScholarshipA scholarship awarded by an organization other than the college the student attends, such as a community foundation, employer, civic group, or national organization. Outside scholarships must be reported to the school’s financial aid office and may affect the existing aid package.
- OverawardA situation where a student’s total financial aid from all sources exceeds the college’s published Cost of Attendance, triggering a mandatory package adjustment under federal regulations to bring the total back under the COA ceiling.
P
- PackagingThe process by which a college’s financial aid office assembles a student’s complete financial aid offer, layering federal entitlements, institutional grants, merit scholarships, state aid, outside scholarships, work-study, and loans into a single award package bounded by the Cost of Attendance.
- Professional JudgmentThe legal authority of a financial aid administrator to override the standard FAFSA formula on a case-by-case basis when a family’s circumstances are not accurately reflected by the standard calculation, such as job loss, medical emergencies, or unusual expenses.
R
- Renewable ScholarshipA scholarship that automatically continues for multiple years (typically four) as long as the student meets specified renewal requirements, usually a minimum GPA and full-time enrollment status.
- Restrictive Early ActionA non-binding early application plan that restricts the student from applying Early Decision or Early Action to other private colleges, though public university EA applications are typically permitted. Used by schools like Georgetown and Notre Dame.
- Rolling AdmissionsAn admissions process where applications are reviewed as they arrive rather than after a fixed deadline, with decisions sent on a continuous basis, typically within four to eight weeks of submission.
S
- SAIThe Student Aid Index, a number calculated from the FAFSA that represents a family’s calculated ability to pay for college. Schools subtract the SAI from their Cost of Attendance to determine need-based aid eligibility. Replaced the Expected Family Contribution (EFC) starting with the 2024-2025 FAFSA.
- Scholarship DisplacementThe reduction of institutional financial aid when an outside scholarship is added to a student’s package, effectively replacing one source of aid with another rather than adding to the total. The degree of displacement depends on the school’s published stacking policy.
- Self-Help AidFinancial aid that requires the student to work or borrow, specifically Federal Direct Loans and Federal Work-Study. Self-help aid is part of the financial aid package but is not free money: loans must be repaid and work-study is earned through employment.
- Single-Choice Early ActionA non-binding early application plan used by Harvard, Yale, Princeton, and Stanford that restricts the student from applying to any other school’s Early Action or Early Decision program, though other Regular Decision applications are permitted.
- Stackable AwardA scholarship or grant that can be combined with other forms of financial aid without reducing them, up to the Cost of Attendance ceiling. Whether an award stacks depends on the specific school’s policy and the types of aid involved.
- Student Aid IndexThe number calculated from the FAFSA that represents a family’s assessed ability to pay for college. Schools subtract the SAI from their Cost of Attendance to determine demonstrated financial need. The SAI replaced the Expected Family Contribution (EFC) starting with the 2024-2025 cycle.
V
Y
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