Financial Aid Glossary

Academic Year

The enrollment period beginning on the first day of classes in the fall term and concluding on the last day of exams in the spring term.

Accrual Date

The day interest on an educational loan begins to accrue.

Award Letter

The official document, issued by the office of student financial planning, which lists all the financial aid awarded to the student.

Capitalization

The process of adding unpaid interest to the principal balance of an educational loan, thereby increasing the total amount to be repaid.

Citizen/Eligible Noncitizen

You must be one of the following to receive federal student aid:

  • 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 (Alien Registration Receipt Card)

If you're not in one of these categories, you must have an Arrival-Departure Record (I-94) from the U.S. Department of Homeland Security showing one of the following designations in order to be eligible:

  • “Refugee”
  • “Asylum Granted”
  • “Indefinite Parole” and/or “Humanitarian Parole”
  • “Cuban-Haitian Entrant, Status Pending”
  • “Conditional Entrant” (valid only if issued before April 1, 1980).

If you are in the United States on an F1 or F2 student visa only, or on a J1 or J2 exchange visitor visa only you cannot get federal student aid. Also, persons with G series visas (pertaining to international organizations) are not eligible for federal student aid. 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 (FSEOGs), or Federal Work Study. These applicants should check with their financial aid administrators for more information.

Cost of Attendance

The total annual amount it should cost a student to attend school. The cost of attendance covers Centre’s comprehensive fee which includes an on-campus room and board (or a housing and food allowance for off-campus students), and allowance for books and supplies, transportation, and miscellaneous expenses.

Default

The loan repayment status for individuals who do not repay their loans. Severe legal and economic repercussions are involved for borrowers who go into default, such as garnishment of wages, repayment of all principal demanded within a month's time, and adverse credit ratings.

Deferment

An authorized period during which a borrower may postpone principal and interest payments. Deferments are usually granted for graduate studies, Peace Corps work and a limited set of other situations. Contact your lender for details.

Direct Costs

At Centre, direct costs include the amount you are charged for tuition, room and board.

Disbursement

The act of placing funds in the student's account. For example, financial aid at Centre is credited to the student's account twice, in two equal disbursements.

Eligibility

The determination of whether or not a student will receive a certain type of funding. This is usually dictated by a student's EFC, however, some funds/sources use other criteria (such as geography, major, etc.).

Entrance Loan Counseling

A required informational session provided to first-time borrowers concerning their rights and responsibilities as borrowers of a federal loan.

Exit Loan Counseling

A required informational session for students preparing to leave college before graduation, or withdrawal. Information about total indebtedness, repayment, and deferment is provided to the student.

Expected Family Contribution

The federal government's assessment of a family's ability to contribute to the student's education for a given academic year. This number is determined by filing the FAFSA.

Financial Aid Package

The total financial aid a student receives. Federal, state and institutional aid such as grants, loans, work-study, and scholarships are combined in a “package” to help meet the student's need.

First-Time Borrower

Any student who is borrowing through the Stafford or Perkins loan program for the first time. An entrance loan counseling session is required, and can be completed during fall orientation, or online on KHEAA's web page.

Forbearance

An authorized period of time during which the lender agrees to temporarily postpone a borrower's principal repayment obligation due to some hardship experienced by the borrower, such as unemployment. 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 the loan but is unable to do so at that time.

Free Application for Federal Student Aid (FAFSA)

The aid application all students must file to qualify for federal, state and Centre's need-based aid programs.

Gift Aid

Money that does not have to be repaid, such as grants or scholarships.

Indirect Costs

Expenses associated with attending college incurred by the student and family, including books, travel expenses to and from college, and personal expenses.

Interest

A fee charged for the use of borrowed money. Interest is calculated as a percentage of the principal loan amount.

Loan

A type of funding involving an institution (bank, college or organization) permitting an individual to borrow a sum of money with the understanding that the individual will repay the amount borrowed plus interest.

Loan Terms

The characteristics that define the nature of the loan including: interest rate, calculation of interest, guaranty fee, origination fee, repayment schedule, and deferment criteria.

Need

Demonstrated eligibility for financial aid as determined by comparing a school's cost of attendance with the expected family contribution. (Need = COA - EFC) Demonstrated need is a federal term and the dollar figure that establishes the maximum amount of need-based financial aid that can be provided to a student from all sources.

Need-Based Financial Aid

Resources made available to a student, based on demonstrated need.

Origination Fee

A charge for processing a loan to partially help offset administrative costs. It can be either a flat rate or a percentage of the amount you borrow.

Principal

The actual dollar amount borrowed through a loan program on which interest is calculated and from which guaranty and origination fees are removed before disbursement.

Promissory Note

A legally binding agreement stating the amount an individual borrows and the terms of the loan. The student promises to repay the principal with interest.

Repayment

The period when you are repaying the principal and interest of borrowed money. It usually begins after graduation and lasts for ten years for students with federal educational loans.

Repayment Schedule

The outline disclosing the borrower's monthly payment, interest rate, total repayment obligation, due dates and length of time for repaying the loan.

Satisfactory Academic Progress

The requirement that a student must maintain acceptable overall grades and progress towards a degree to receive financial aid funds. At Centre, this means that a full-time student must pass at least 21 credit hours per academic year and maintain a cumulative minimum GPA as outlined in the Centre College Catalog.

Scholarships

Funds provided based on a student's ability, achievement or involvement in activities. Scholarships do not have to be repaid and come from many sources.

Self-Help Money

Money the student is responsible for earning or repaying, such as work-study and loans.

Subsidized Loan

A need-based loan on which the interest is paid by the federal government during the in-school, grace and deferment periods.

Unsubsidized Loan

A non need-based loan on which the interest is not paid by the federal government. Borrowers are responsible for the interest on all unsubsidized loans from the date the loan is disbursed. Students may choose to pay the interest while they are in-school or they may allow the interest to accrue and be capitalized on the principal when they begin repayment.

Variable Interest Rate

Percentage of principal that changes at specified times based on a predetermined formula. All new federal educational loans made from October 1992 to June 30, 2006 have a variable interest rate. New loans since July 2006 are a fixed rate.



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