Learn the Lingo: Financial Aid Vocabulary

When you’re new to the financial aid process, there may be terms you don’t recognize or understand. That’s why we created a list of the most universal financial aid terms in the U.S. While some colleges have specific terms, you’ll see the following terms most often. Ask your admissions or financial aid counselor to explain any unfamiliar terms. 

Award Letter: The document you receive from a college that outlines the terms of your awarded financial aid. The letter includes the types and amounts of financial aid offered, what you need to do to keep the award, and a deadline for accepting the award.  

Contributor: “Contributor” is a new term on the 2024–25 FAFSA form. It refers to anyone required to provide their information, consent, and/or approval to have their federal tax information automatically transferred from the IRS to the FAFSA form, and a signature on your FAFSA form.

Note: Your grandparents, foster parents, legal guardians, siblings, and aunts and uncles are not considered contributors unless they have legally adopted you, even if they helped provide for or raise you.

Cost of Attendance (COA): The total cost to attend college. It includes tuition, room and board, books, laptop, transportation, and other personal costs.  

CSS Profile: Some schools require a CSS (College Scholarship Service) Profile for scholarship consideration. Check the schools on your list to see if they require a CSS Profile.  

Financial Aid: Money given or loaned to you to help pay for college. Financial aid can come from federal and state governments, colleges, and other organizations. 

Free Application for Federal Student Aid (FAFSA): Each year in college, you will fill out the FAFSA for need-based aid and if you want to take out federal student loans to help fund your education. The FAFSA typically opens on October 1st of the previous year. If you’re unmarried and under 24 years old, you will need your parents’ tax info from two years ago.

Grant: Gift aid that you don’t have to pay back. Grants are typically awarded based on financial need.  

Loan: Money you borrow from the government, a bank, or another source. Loans need to be paid back, typically over an agreed period. 

Merit Aid: Financial aid given to students based on their achievements. Most scholarships are considered merit aid. You can get them in many areas, including the arts, athletics, or academics.  

Need-Blind Admission: This is when a college makes admission decisions without looking at students’ financial circumstances.  

Need-Aware Financial Aid: Need-aware is the opposite of need-blind. Colleges that are need-aware consider a student’s ability to pay tuition when they make admissions decisions. 

Net Price: The actual amount a student will pay for college. Typically, this means the published full cost of attendance (tuition, fees, room and board, supplies, and other expenses billed by the college/university) minus the amount of gift aid a student receives.  

Net Price Calculator: This is an online tool that gives you a personalized estimate of what it will cost to attend a specific college. The law requires most colleges to post a net price calculator on their websites.  

Pell Grants: Pell Grants are federally funded, need-based grants for students who submit their FAFSA application. You do not need to pay back Pell Grants.  

Parent Loans for Undergraduate Study (PLUS Loans): Parents can apply for a PLUS loan up to the Cost of Attendance minus any other aid. To qualify for this loan, parents must have a positive credit history. PLUS loans begin accruing interest and require repayment as soon as they disburse. 

Scholarship: This is another kind of gift aid you don’t pay back. You can get scholarships from private organizations, governments, colleges, or universities. They are often based on academic merit, talent, particular areas of study, athletic ability, or other criteria.  

Student Aid Index (SAI): The SAI is the number colleges use to determine how much financial aid you’re eligible for and which types. The SAI is a financial need calculation on the FAFSA, the form used by colleges, states, and other scholarship providers to determine financial aid packages. Since you renew your FAFSA each year, your SAI can change while you’re in college.

Student Aid Report (SAR): You’ll receive this report via email after submitting the FAFSA. It details your expected family contribution (EFC). The SAR is your opportunity to review the information you submitted and make sure it’s accurate.