Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

AwardYear: 1997-1998
Edition: PostSecondary
Part: Glossary
SectionTitle: Glossary

PageNumbers: 101-105


Academic Year -- This is a measure of academic work to be
accomplished by a student. A school defines its own academic year,
but federal statute and regulations set minimum standards to
determine federal financial aid awards. For instance, the academic
year must be at least 30 weeks of instructional time in which a full-
time student is expected to complete at least 24 semester or trimester
credit hours, 36 quarter credit hours, or 900 clock hours.

Award Year -- An award year begins on July 1 of one year and
extends to June 30 of the next year. Funding for Federal Pell Grants
and campus-based programs is provided on the basis of the award
year--for example, a student is paid out of funds designated for a
particular award year, such as the 1997-98 award year.

Base Year -- For need analysis purposes, the base year is the
calendar year preceding the award year. For instance, 1996 is the
base year used for the 1997-98 award year. The Free Application for
Federal Student Aid (FAFSA) uses family income from the base year
because it is more accurate and easier to verify than projected year

Campus-Based Programs -- Federal Supplemental
Educational Opportunity Grant (FSEOG), Federal Perkins Loan, and
Federal Work-Study (FWS) programs. These three programs are
called "campus-based" because the funds are allocated to and
administered directly by a school's financial aid office, which awards
the funds to students using federal guidelines.

Central Processing System (CPS) -- The Department's
processing facility for application data. The CPS receives student
information from the application processors, calculates a student's
official EFC, performs several eligibility database matches, prints the
Student Aid Report (SAR), and produces Institutional Student
Information Records (ISIRs).

Citizen/Eligible Noncitizen -- A student 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

- U.S. permanent resident who has an I-151, I-551, or I-551C
(Alien Registration Receipt Card)

If a student is not in one of these categories, he or she must have an
Arrival-Departure Record (I-94) from the U.S. Immigration and
Naturalization Service (INS) showing one of the following

- "Refugee"

- "Asylum Granted"

- "Indefinite Parole and/or Humanitarian Parole"

- "Cuban-Haitian Entrant, Status Pending"

- "Conditional Entrant" (valid only if issued before April 1, 1980)

- Other eligible noncitizen with a Temporary Resident Card (I-688)

Or a student can be eligible on the basis of the Family Unity Status
category with an approved I-797 (Voluntary Departure and
Immigrant Petition).

If a student has only a Notice of Approval to Apply for Permanent
Residence (I-171 or I-464), he or she is not eligible for federal
student aid.

If a student is in the U.S. on an F1 or F2 student visa, or on a J1 or J2
exchange-visitor visa only, he or she can't 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 Marshall Islands,
and the Republic of Palau are eligible for Federal Pell Grants,
Federal Supplemental Educational Opportunity Grants, or Federal
Work-Study only. These applicants should check with their schools'
financial aid administrators for more information.

Consolidation Loan/Direct Consolidation Loan --
There are two categories of consolidation loans--Federal Family
Education Loan (FFEL) Program Consolidation Loans and Direct
Consolidation Loans. Both allow the borrower to combine different
types and amounts of federal student loans to simplify repayment. A
consolidation loan pays off the existing loans; the borrower then
repays the consolidation loan.

Cost of Attendance (COA) -- A student's cost of attendance
includes tuition and fees, room and board expenses while attending
school, and allowances for books and supplies, transportation, loan
fees (if applicable), dependent care costs, costs related to a disability,
and other miscellaneous expenses. In addition, reasonable costs for a
study-abroad program and costs associated with a student's
employment as part of a cooperative education program may be
included. The cost of attendance is determined by the school, within
guidelines established by federal statute. The cost of attendance is
compared to a student's Expected Family Contribution (EFC) to
determine the student's need for aid.

Default -- Failure to repay a loan in accordance with the terms of
the promissory note. Default can also occur if students fail to submit
requests for deferments or discharges (cancellations) in a timely

Default Rate -- A percentage calculated each year for a
postsecondary school on the basis of the number of former students
who defaulted on FFEL and/or Direct Loan Program Loans received
at that school.

Department (or ED) -- Abbreviated names for the U.S.
Department of Education.

Eligible Program -- A course of study that requires a certain
minimum number of hours of instruction and period of time and that
leads to a degree or certificate at a school participating in one or
more of the federal student financial aid programs described in this
handbook. Generally, to get student aid, a student must be enrolled in
an eligible program.

Expected Family Contribution (EFC) -- The amount,
determined by a formula Congress established, that a student's family
is expected to contribute toward the cost of attendance. It is
determined for the purposes of the federal SFA programs. The EFC
is printed on the front of a Student Aid Report (SAR) or on an
Institutional Student Information Record (ISIR).

William D. Ford Federal Direct Loan Program --
Federal Direct Stafford/Ford Loans (Direct Subsidized Loans),
Federal Direct Unsubsidized Stafford/Ford Loans (Direct
Unsubsidized Loans), Federal Direct PLUS Loans, and Federal
Direct Consolidation Loans. Funds for these programs are lent to
student and parent borrowers from the federal government through
colleges and career schools that participate in the program. The
program began operating on July 1, 1994.

Federal Family Education Loan (FFEL) Program --
The Federal Stafford (subsidized and unsubsidized), Federal PLUS,
and Federal Consolidation loan programs. Funds for these programs
are provided by private lenders, and the loans are guaranteed by the
federal government.

Financial Need -- The difference between a student's cost of
attendance (COA) and the Expected Family Contribution (EFC).

Free Application for Federal Student Aid (FAFSA)
and Renewal FAFSA -- The application filled out and filed by a
student that collects household and financial information used by the
federal government to calculate the Expected Family Contribution

Institutional Student Information Record (ISIR) --
A federal output record that contains the student's EFC as calculated
by the central processing system (CPS) and all the financial and
other data submitted by the student on the FAFSA. The ISIR can be
received electronically by schools that participate in the Electronic
Data Exchange (EDE) system. (See Student Aid Report.)

Need Analysis -- The process of analyzing household and
financial information on a student's financial aid application and
calculating an Expected Family Contribution (EFC).

Overaward -- Generally, any amount of federal financial aid
that exceeds the student's financial need. (The overaward concept
does not apply in the Federal Pell Grant Program.)

Overpayment -- Any payment of a Federal Pell Grant, FSEOG,
or SSIG that exceeds the amount for which a student was eligible.
An overpayment may be the result of an overaward, an error in the
cost of attendance or Expected Family Contribution (EFC), or a
student not meeting any other eligibility criterion, such as citizenship
or enrollment in an eligible program.

Promissory Note -- A binding legal document that a borrower
signs to get a loan. By signing this note, a borrower promises to
repay the loan, with interest, in specified installments. The
promissory note will also include any information about the grace
period, deferment, or cancellation provisions, and a borrower's rights
and responsibilities with respect to that loan.

Renewal FAFSA -- The version of the FAFSA that students may
use if they applied for federal financial aid the previous award year.
If a student is among those allowed to complete a Renewal FAFSA,
it will be sent directly to him or her by the FAFSA processor or the

Resources -- Other student aid that must be taken into account to
prevent an overaward in the campus-based programs, as defined in
federal regulations for the campus-based programs. Resources are
called "estimated financial assistance" in determining a student's
eligibility for some federal student loans.
SAR Information Acknowledgement -- A noncorrectable one-page
Student Aid Report composed of Part 1 only; it is sent to students
who transmit electronic applications or corrections through their

School -- A postsecondary educational institution, such as a
college, university, or career school. In this handbook, the term
"school" refers to such an institution.

Simplified Needs Test -- The primary purpose of the
Simplified Needs Test is to make it easier for some students to fill
out the Free Application for Federal Student Aid (FAFSA). If a
dependent student's parents' income is less than $50,000 and the
relevant family members were non-tax filers or were eligible to use a
1040A or a 1040EZ to file their taxes, the student completes only the
first part of the application; the asset information will not have to be

Student Aid Report (SAR) -- A federal output document sent
to a student by the application processor. The SAR contains financial
and other information reported by the student on the Free
Application for Federal Student Aid (FAFSA). That information is
entered into the processing system, and the SAR is produced. The
student's eligibility for aid is indicated by the EFC, which is printed
on the front of the SAR. (See Institutional Student Information

SFA Programs -- The programs administered by the office of
Student Financial Assistance Programs within the U.S. Department
of Education: Federal Pell Grants, Federal Supplemental Educational
Opportunity Grants, Federal Work-Study, Federal Perkins Loans,
Federal Direct Stafford/Ford Loans, Federal Direct PLUS Loans,
Federal Stafford Loans, Federal PLUS Loans, and State Student
Incentive Grants.

Verification -- A procedure where a school checks the
information a student reported on the FAFSA, usually by requesting
a copy of signed Federal tax returns filed by the student and, if
applicable, the student's parent(s) and spouse. Schools must verify
students selected for verification by the federal central processing
system, following procedures established by federal regulations. The
contractor prints an asterisk next to the Expected Family
Contribution (EFC) on SARs to identify students selected for
verification. Many schools also select students for verification in
addition to those selected by the central processing system.

Last Modified: 08/23/1998