Financial Aid A-Z
- Accrual date Date on which interest charges on an educational loan begin to accrue.
- Amortization Process of gradually repaying a loan over an extended period of time through periodic installments of principal and interest.
- Award letter Official VCU document that lists all of the financial aid awarded to the student. The letter provides your financial aid awards according to source and amount of aid.
- Base year Tax year prior to the academic year (award year) for which financial aid is requested; for example, the base year for the 2013-14 academic year runs from January 1, 2012, through December 31, 2012. Financial information from the base year is used to determine eligibility for financial aid.
- Borrower Person who receives the loan.
- Cancellation Some loan programs provide for cancellation of the loan under certain circumstances, such as death or permanent disability of the borrower. Some of the federal student loan programs have additional cancellation provisions. For example, if the student becomes a teacher in certain national shortage areas, they may be eligible for cancellation of all or part of the balance of their educational loans. Repayment assistance is available if you serve in the military; the military pays off a portion of your loans for every year of service.
- Capitalization Practice of adding unpaid interest charges to the principal balance of an educational loan, thereby increasing the size of the loan. Interest is then charged on the new balance, including both the unpaid principal and the accrued interest. Capitalizing the interest increases the monthly payment and the amount of money you will eventually have to repay. If you can afford to pay the interest as it accrues, you are better off not capitalizing it. Capitalization is sometimes called compounding.
- College Scholarship Assistance Program (CSAP) State and federally funded grant that provides assistance to undergraduate Virginia residents. More »
- Commonwealth Award (CA) State-funded grant that provides financial assistance to Virginia residents. More »
- Consolidation Loan program that allows a borrower to combine various educational loans into one new loan. By extending the repayment period (up to 30 years depending on the loan amount) and allowing a single monthly payment, consolidation can make loan repayment easier for some borrowers. More »
- Cost of Attendance (COA) The estimated amount it should cost a student to attend college, including tuition and fees, room and board, and allowances for books and supplies, transportation, and miscellaneous expenses.
- Credit rating Evaluation of the likelihood of a borrower to default on a loan. Credit bureaus and credit reporting agencies provide this information to banks and businesses to help them decide whether to issue a loan or extend credit. Your credit rating may include your payment history, a list of current and past credit accounts and their balances, employment and personal information and a history of past credit problems. People who make all of their payments on time are considered good credit risks. People who are frequently delinquent in making their payments are considered bad credit risks. Defaulting on a loan can hurt your credit rating.
- Custodial parent If a student's parents are divorced or separated, the custodial parent is the one with whom the student lived the most during the past 12 months. The student's Expected Family Contribution is based on financial information supplied by the custodial parent.
- Default A loan is in default when the borrower fails to pay several regular installments on time or otherwise fails to meet the terms and conditions of the loan. If you default on a loan, the university, the holder of the loan, the state government and the federal government can take legal action to recover the money, including garnishing your wages and withholding income tax refunds. Defaulting on a government loan will make you ineligible for future financial aid, unless a satisfactory repayment schedule is arranged, and can affect your credit rating.
- Deferment Occurs when a borrower is allowed to postpone repaying the loan. If you have a Federal Direct Subsidized Loan, the federal government pays the interest charges during the deferment period. If you have a Federal Direct Unsubsidized Loan, you are responsible for the interest that accrues during the deferment period. You can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. Most federal loan programs allow students to defer their loans while they are in school at least half time. If you don't qualify for a deferment, you may be able to get forbearance. You can't get a deferment if your loan is in default.
- Dependent status For the purpose of completing the Free Application for Federal Student Aid (FAFSA), a student who is not at least 24 years old as of January 1 of the academic year, is not married, is not a graduate or professional student, does not have a legal dependent other than a spouse, is not a veteran of the U.S. Armed Forces, or is not an orphan or ward of the court (or was not a ward of the court until age 18). These students are required to provide parental information on the FAFSA.
- Dependent For a child or other person to be considered your dependent, they must live with you, and you must provide them with more than half of their financial support. Spouses do not count as dependents in the Federal Methodology formula.
- Disbursement Release of financial aid funds to the student’s VCU account. Funds are first credited to the student's account for payment of tuition, fees, room and board and other university charges. Any excess funds are then paid to the student by direct deposit or check.
- Eligible noncitizen Someone who is not a U.S. citizen but is nevertheless eligible for financial aid. Eligible noncitizens include U.S. permanent residents who are holders of valid green cards, U.S. nationals, holders of form I-94 who have been granted refugee or asylum status, and certain other noncitizens. Noncitizens who hold a student visa or an exchange visitor visa are not eligible for federal and state student financial aid.
- Enrollment status Indication of whether you are a full-time, three-quarter time, half-time, or less than half-time student. For most financial aid programs, you must be enrolled at least half time; however, there are exceptions.
- Entrance/exit counseling Sessions that inform borrowers about their rights and responsibilities with regard to borrowing student loans. For the Perkins Loan, exit counseling is required. For the Federal Direct Subsidized and Unsubsidized Loans, entrance and exit counseling is voluntary.
- Expected Family Contribution (EFC) Amount of money that the family is expected to be able to contribute towards the student's educational costs, as determined by the Federal Methodology need analysis formula approved by Congress. The EFC includes the parent contribution and the student contribution, and is based on numerous factors including the student (and parent's, if the student is dependent) family size, number of family members in school, taxable and nontaxable income, and assets.
- Federal Direct Loan Program Refers to the William D. Ford Federal Direct Loan Program, a loan program where the federal government provides the loan funds. Though not all colleges and universities participate in the program, VCU does. The benefits of the program include a faster turnaround time and less bureaucracy. The terms for Federal Direct Loans are the same as for the Stafford Loan program in which private lenders provide the loan funds. Click here for more details. More »
- Federal Direct PLUS Loan Federal loan available to parents of dependent undergraduate students. More »
- Federal Direct Subsidized Loan Loan for which the government pays the interest while the student is in school, during the six-month grace period and during any deferment periods. Subsidized loans are awarded based on financial need.
- Federal Direct Unsubsidized Loan Loan for which the government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed, even while the student is still in school. Students may avoid paying the interest while they are in school by capitalizing the interest, which increases the loan amount. Unsubsidized loans are not based on financial need. More »
- Federal Methodology (FM) Need analysis formula used to determine the Expected Family Contribution (EFC). The Federal Methodology is based on numerous factors including family size, the number of family members in college, taxable and nontaxable income, and assets.
- Federal Work-Study (FWS) Program providing undergraduate and graduate students with part-time employment during the academic year. The federal government pays a portion of the student's salary, and the employer pays the remaining portion. FWS is based on need. Money earned from a FWS job is not counted as income for the subsequent year's need analysis process.
- Financial aid administrator Representative of the VCU Office of Financial Aid who counsels students about the financial aid process, effects of changes in enrollment, financial and debt management, and adjusts financial aid packages. Also known as a financial aid counselor.
- Financial Aid Award Letter Official VCU document that lists all of the financial aid awarded to the student. The letter provides your financial aid awards according to source and amount of aid.
- Financial aid package Complete collection of grants, fellowships, scholarships, loans, and work-study employment offered to a student to financially enable them to attend the university.
- Forbearance Authorized period of time during which the lender agrees to temporarily postpone a borrower's principal repayment obligation. Interest continues to accrue and usually must be paid during the forbearance period. Forbearance may be granted at the lender's discretion when a borrower is willing to repay their loan but is unable to do so.
- Free Application for Federal Student Aid (FAFSA) Form used to apply for Pell Grants and all other need-based aid. As the name suggests, no fee is charged to file a FAFSA. More »
- Grace period Time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period may also kick in if the borrower leaves school for a reason other than graduation or drops below half-time enrollment. Depending on the type of loan, you will have a grace period of six months (Direct Loans) or nine months (Perkins Loans) before you must start making payments on your student loans. PLUS Loans do not have a grace period.
- Grant Type of financial aid based on financial need that the student does not have to repay.
- Half-time enrollment Level at which an undergraduate student is enrolled in six to eight credit hours and a graduate student is enrolled in five to eight credit hours. Most financial aid programs require at least half-time enrollment to be eligible for aid. Students who have federal educational loans may continue to defer their educational loan payments so long as they maintain half-time enrollment status.
- In-state student Student who has met Virginia's domiciliary residency requirements and is eligible for reduced tuition at public colleges and universities in the state. More »
- Independent status For purpose of completing the Free Application for Federal Student Aid (FAFSA), a student who is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). These students are not required to provide parental information on the FAFSA. A parent refusing to provide support for their child's education is not a sufficient reason for the student to be declared independent.
- Institutional Student Information Release Report (ISIR) Electronic version of the Student Aid Report (SAR).
- Interest Amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal balance of the loan. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. All federal loans issued since October 1992 use variable interest rates that are tied to the cost of U.S. Treasury Bills. Interest on some loans can be paid while the student is enrolled, or may be deferred until after graduation (or the student drops below half-time enrollment).
- Lender Financial institution, or the federal government in the case of Direct Loans and VCU in the case of Perkins Loans, that provides the funds for students and parents to borrow educational loans.
- Loan consolidation Combining several loans into one bigger loan from a single lender. The consolidation loan is used to pay off the balances on the other loans.
- Master Promissory note (MPN)Promissory note that can be used to make one or more loans for one or more academic years (up to 10 years). For example, if you enroll at VCU as a freshman and borrow under the Direct Loan Program for all years of study at VCU, you may be able to borrow under this one MPN for all years.
- Need Difference between the student's Cost Of Education and Expected Family Contribution. The student's financial aid package is based on the amount of financial need. The process of determining a student's need is known as need analysis.
- Origination fee Fee paid to the lending institution to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed.
- Overaward Condition that exists when a student's total financial assistance exceeds the student's Cost of Education or Need.
- Pell Grant Federal grant based on financial need. More »
- Perkins Loan Low-interest federal loan based on financial need. More »
- Principal Amount of money borrowed or remaining unpaid on a loan. Interest is charged as a percentage of the principal. Insurance and origination fees will be deducted from this amount before disbursement.
- Professional judgment Ability of a financial aid administrator to change a student's Cost of Education, Expected Family Contribution, or Satisfactory Academic Progress status based on unusual or mitigating circumstances.
- Promissory note Binding, legal document that must be signed by the borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including the repayment schedule, interest rate, deferment policy, and cancellations. Borrowers should keep this document until the loan has been repaid.
- Satisfactory Academic Progress Acceptable progress towards completion of an approved degree or certificate program in order to be eligible to receive federal and state financial aid.
- Student Aid Report (SAR) Report that summarizes the information included in the FAFSA and indicates the Expected Family Contribution (EFC). The SAR is mailed to the student applicant approximately four to six weeks after the FAFSA is filed. The student should review the SAR for accuracy and make any necessary corrections. Instead of sending corrections to the federal processor, submit the corrected SAR to the VCU Office of Financial Aid, and the corrections can be transmitted electronically. If all of the information is accurate and VCU is listed as a school to receive the FAFSA results, simply keep the SAR for your records. Note that students should ignore the verification notice on the SAR if selected for verification. The VCU Office of Financial Aid will notify students separately if additional documentation is necessary.
- Selective Service Registration for the military draft. Male students who are U.S. citizens, have reached the age of 18, and were born after December 31, 1959, must be registered with Selective Service to be eligible for financial aid. If the student did not register, is past the age of doing so (18-25), and the school determines that the failure to register was willful, the student is ineligible for financial aid.
- Supplemental Education Opportunity Grants (SEOG) Federal grant program for undergraduate students with exceptional need.More »
- Title IV School Code Six-character identifier for schools. You must supply the Title IV School Code on the Free Application for Federal Student Aid (FAFSA) for the schools that should receive your application data. VCU's Title IV School Code is 003735.
- Unmet Need The amount of financial aid eligibility that is not covered by financial assistance; defined as the Cost Of Education minus Expected Family Contribution minus any financial assistance the student has been awarded.
- Verification Process of review to determine the accuracy of the information on a student's financial aid application. VCU is not required to participate in the standard verification program due to our participation in the Quality Assurance Program.
- Veteran For the purposes of student financial assistance, an individual who has engaged in active service in the U.S. Army, Navy, Air Force, Marines or Coast Guard and was released under a condition other than dishonorable, including an individual who attended a U.S. military academy but withdrew in good standing; or an individual who is not a veteran now but will be a veteran by June 30 of the projected academic year.
- Virginia Guaranteed Assistance Program (VGAP) Need and merit-based program that provides assistance to full-time Virginia residents who are dependent. More »
- Work-StudySee Federal Work-Study
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