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-Student Eligibility
-Dependency Status
-Academic Progress
-Professional Judgement
Types of Financial Aid
-Scholarships
-Federal & State Grants
-Stafford Loans
-Stafford Loans MPN
-PLUS Loan
-Alternative Loan
-Choosing a Loan Lender
-Applying for a Stafford Loan
-Entrance & Exit Interviews
-Federal Perkings Loans/Nursing Loan
-Federal Work Study
-Additional Sources of Aid
Important Financial Aid Numbers
Calendars
Directories
A
Academic Year: The period during which school is in session, consisting of at least 30 weeks of instructional time. At Northeastern, the academic year runs from the beginning of September through the end of August.
Accrue: Accumulate. The accrual date is the date on which interest charges on an educational loan begin to accrue.
Adjusted Gross Income (AGI): Used to determine how much of your income is taxable, AGI consists of "gross income" from taxable sources such as wages and salaries, unemployment compensation, tips and gratuities, interest, and certain other types of income, minus your maximum allowable adjustments including alimony paid, penalties on early withdrawal of savings, payments to an IRA, payments to a Keogh retirement plan, and self-employed health insurance payments and moving expenses.
Amortization: The process of gradually repaying a loan over an extended period of time through periodic installments of principal and interest.
Annual Percentage Rate (APR): The APR reflects the total cost of borrowing money over the life of the loan, considering not only the interest rate, but also the effect of other fees on the total cost of repaying the amount financed.
Asset: An item of value, such as a family's home, business and farm equity, real estate, stocks, bonds, mutual funds, cash, certificates of deposit (CDs), bank accounts, trust funds and other property and investments.
Award Year: The academic year for which financial aid is requested (or received).
B
Borrower: The person who receives the loan funds from the bank. For student loans, such as the Stafford Loan, the student is the borrower. For parent loans, such as the PLUS Loan, the parent is the borrower.
C
Campus-Based Aid: Financial aid programs that are administered by Dutchess Community College. The federal government provides the university with a fixed annual allocation, which is awarded to deserving students. Such programs include the Perkins Loan, Supplemental Education Opportunity Grant (SEOG) and Work-Study. There is no guarantee that every eligible student will receive financial aid through these programs, because the awards are made from a fixed pool of money.
Capitalization: The 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.
Certify: To attest that something is true or meets a certain standard. To certify a loan application, the school confirms the borrower’s eligibility for the loan to the lender.
Cost of Attendance (COA): The cost of attendance is the total amount it may cost the student to go to school. This amount includes tuition and fees, room and board, allowances for books and supplies, transportation, and personal and incidental expenses.
Consolidation Loan: A loan that combines several student loans into one bigger loan from a single lender. The consolidation loan is used to pay off the balances on the other loans.
Cosigner: A cosigner on a loan assumes responsibility for the loan if the borrower should fail to repay it.
Credit Rating: A credit rating is an evaluation of the likelihood of a borrower to default on a loan. Credit Bureaus and Credit Reporting Agencies provide credit information to creditors, such as banks and businesses, to help them decide whether to issue a loan or extend credit. This information 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. Defaulting on a loan can negatively impact 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.
D
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 federal financial aid, unless a satisfactory repayment schedule is arranged, and can affect your credit rating.
Deferment: Deferment occurs when a borrower is allowed to postpone repaying a loan. If you have a subsidized loan, the federal government pays the interest charges during the deferment period. If you have an unsubsidized loan, you are responsible for paying 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 a forbearance. You can't get a deferment if your loan is in default.
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 support. Spouses do not count as dependents in the Federal Methodology. You and your spouse cannot both claim the same child as a dependent.
Disbursement: Disbursement is the release of loan funds to the school for delivery to the borrower. Loan funds are first credited to the student's account for payment of tuition, fees, room and board, and other school charges. Any excess funds are then paid to the student by check. Loan disbursements are made in equal installments over all periods of enrollment.
E
Eligible Non-Citizen: Someone who is not a US citizen but is eligible for Federal student aid. Eligible non-citizens include US permanent residents who are holders of valid green cards, US nationals, holders of form I-94 who have been granted refugee or asylum status and certain other non-citizens. Non-citizens who hold a student visa or an exchange visitor visa are not eligible for Federal student aid.
Entrance Interview: Students with federal education loans are required to receive counseling before they receive their first loan disbursement, during which the borrower’s rights and responsibilities and loan terms and conditions are reviewed with the student.
EFC (Estimated Family Contribution): The amount of money that the family is expected to be able to contribute to the student's education, as determined by the Federal Methodology need analysis formula approved by Congress. The EFC includes the parent contribution and the student contribution, and depends on the student's dependency status, family size, number of family members in school, taxable and nontaxable income, and assets. The difference between the cost of attendance (COA) and the EFC is the student's financial need, and is used in determining the student's eligibility for need-based financial aid.
Exit Interview: A counseling session conducted when the student is leaving college at which the student’s loan obligation and responsibilities are reviewed.
F
Federal Family Education Loan Program (FFELP): Includes the Federal Stafford Loan (Subsidized and Unsubsidized), the Federal Perkins Loan, and the Parent Loan for Undergraduate Students (PLUS). The funds for these loans are provided by private lenders, such as banks, credit unions, and savings & loan associations. These loans are guaranteed against default by the federal government.
Financial Need: Financial Need determines a student's eligibility for need-based financial aid, according to a federally-approved need-analysis formula. It is calculated by the difference between the Cost of Attendance (COA) at a particular college or university and your Expected Family Contribution (EFC).
Fixed Interest Rate: In a fixed interest loan, the interest rate stays the same for the life of the loan.
Forbearance: During a forbearance the lender allows the borrower to temporarily postpone repaying the principal, but the interest charges continue to accrue, even on subsidized loans. The borrower must continue paying the interest charges during the forbearance period. Forbearances are granted at the lender's discretion, usually in cases of extreme financial hardship or other unusual circumstances when the borrower does not qualify for a deferment. You can't receive a forbearance if your loan is in default.
FAFSA (Free Application for Federal Student Aid): 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.
G
Grace Period: A short time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period may also begin 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 (Stafford Loans) or nine months (Perkins Loans) before you must start making payments on your student loans. The PLUS Loans do not have a grace period.
Graduated Repayment: A schedule where the monthly payments are smaller at the start of the repayment period and gradually become larger.
Grant: A grant is a type of financial aid based on financial need that the student does not have to repay.
Guarantor, Guarantee Agency: A state or non-profit organization that approves student loans and insures them against default. Guarantee agencies also enforce federal and state regulations based on an agreement with the Secretary of Education.
I
Interest Rate: Interest is an amount charged to the borrower for the use of 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.
Independent: An independent student 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). A parent refusing to provide support for their child's education is not sufficient for the child to be declared independent.
ISIR (Institutional Student Information Report): The electronic version of Student Aid Reports delivered to schools by EDExpress.
L
Lender: A bank, credit union, savings & loan association, or other financial institution that provides funds to the student or parent for an educational loan.
Loan: A type of financial aid which must be repaid, with interest. The federal student loan programs are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.
Loan Certification: To certify a loan application, the school confirms the borrower’s eligibility for the loan to the lender.
Loan Period: The period of enrollment for which a loan application is certified.
M
Master Promissory Note (MPN): A contract the student signs when taking a federal Stafford or Perkins loan.
N
Need Analysis: Need analysis is the process of determining a student's financial need by analyzing the financial information provided by the student and his or her parents (and spouse, if any) on a financial aid form. The student must submit a need analysis form to apply for need-based aid. The FAFSA is a Need analysis form.
Need-based: Financial aid that is need-based depends on your financial situation. Most government sources of financial aid are need-based.
Nursing Student Loan: A low interest loan administered by the U.S. Department of Health and Human Services (HHS) and available to students enrolled in nursing programs.
O
Origination: Origination represents the activities associated with processing a loan application. These activities may include data entry of application information, underwriting (credit review), ensuring all approvals are in place, and disbursement of funds.
Origination Fee: The origination fee is paid to a lender to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed, and typically represent a percentage of the amount disbursed.
Outside Resource: Funds that are available because a student is in school that are counted after need is determined. Outside scholarships, prepaid tuition plans and Veterans educational benefits are examples of outside resources.
Outside Scholarship: A scholarship that comes from sources other than the school and the federal or state government.
P
Parent Contribution: An estimate of the portion of your educational expenses that the federal government believes your parents can afford. It is based on their income, the number of parents earning income, assets, family size, the number of family members currently attending a university, and other relevant factors. Students who qualify as independent are not expected to have a parent contribution.
Pell Grant: The Pell grant is a federal grant that provides funds of up to $4,050 based on the student's financial need.
Perkins Loan: The Perkins Loan has a fixed 5% interest rate and is awarded to students with exceptional financial need. The student must have applied for a Pell Grant to be eligible. The interest on the Perkins Loan is subsidized while the student is in school.
PLUS Loan: Federal loans available to parents of dependent undergraduate students to help finance the child's education. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received. PLUS loans may be used to pay the EFC. There is a minimal credit check required for the PLUS loan, so a good credit history is required. If your application for a PLUS loan is turned down, your child may be eligible to borrow additional money under the unsubsidized Stafford loan program.
Principal: The principal is the 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: For need-based federal aid programs, the Financial Aid Counselor can adjust the EFC, adjust the COA, or change the dependency status (with documentation) when extenuating circumstances exist. For example, if a parent becomes unemployed, disabled, or deceased, the Counselor can decide to use estimated income information for the award year instead of the actual income figures from the base year. This delegation of authority from the federal government to the Financial Aid Administrator is called Professional Judgment (PJ).
Promissory Note: The binding legal document that must be signed by the primary borrower or student borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy, and cancellations. The borrower should keep this document until the loan has been repaid.
R
Repayment Schedule: The repayment schedule discloses the monthly payment, interest rate, total repayment obligation, payment due dates, and the term of the loan.
Repayment Term: The term of a loan is the period during which the borrower is required to make payments on his or her loans. When the payments are made monthly, the term is usually given as a number of payments or years.
S
Satisfactory Academic Progress (SAP): A student must be making Satisfactory Academic Progress (SAP) in order to continue receiving federal aid. If a student fails to maintain an academic standing consistent with Dutchess Community College ’s SAP policy, they are unlikely to meet the school's graduation requirements.
Scholarship: A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships are a form of gift aid and do not have to be repaid. Many scholarships are restricted to students in specific courses of study or with academic, athletic, or artistic talent.
Stafford Loan: Stafford Loans are federal loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on need; unsubsidized loans aren't. The federal government pays the interest on the Subsidized Stafford Loan while the student is in school and during the 6-month grace period. Undergraduates may borrow up to $23,000 ($3,500 during the freshman year and $4,500 during the sophomore year) These limits are for subsidized and unsubsidized loans combined. The difference between the subsidized loan amount and the limit may be borrowed by the student as an unsubsidized loan. Higher unsubsidized Stafford Loan limits are available to independent students, dependent students whose parents were unable to obtain a PLUS Loan, and graduate/professional students.
Student Aid Report (SAR): Summarizes the information included in the FAFSA and must be provided to your school's Financial Aid Office. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC). You should receive a copy of your SAR four to six weeks after you file your FAFSA. Review your SAR and correct any errors on part two of the SAR. Keep a photocopy of the SAR for your records. To request a duplicate copy of your SAR, call 1-800-4FED-AID (1-800-433-3243).
Student Contribution: The amount of money the federal government expects the student to contribute to his or her education; included as part of the EFC. The SC depends on the student's income and assets, but can vary from school to school. As of 2007-2008, a student is expected to contribute about 20% of his or her savings and approximately one-half of his summer earnings above $3,000.
Subsidized: With a subsidized loan, such as the Federal Perkins Loan or the Subsidized Federal Stafford Loan, the government pays the interest on the loan while the student is in school, during the six-month grace period, and during any deferment periods. Once you enter repayment, you will pick up responsibility for the remaining interest costs. Subsidized loans are awarded based on financial need and may not be used to finance the family contribution.
U
Unmet Need: In an ideal world, the Financial Aid Office would be able to provide each student with the full difference between their ability to pay and the cost of education. Due to budget constraints the FAO may provide the student with less than the student's need. This gap is known as the unmet need.
Unsubsidized: An unsubsidized loan is a 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 and may be used to finance the family contribution.
Untaxed Income: Contributions to IRAs, Keoghs, tax-sheltered annuities and 401k plans, as well as worker's compensation and welfare benefits.
V
Variable Interest Rate: In a variable interest rate loan, the interest rate changes periodically.
W
Work Study: A Federal program providing undergraduate and graduate students with part-time employment during the school year. The federal government pays a portion of the student's salary, making it easier for departments and businesses to hire the student. Eligibility for FWS is based on need. Money earned from a FWS job is not counted as income for the subsequent year's need analysis process.
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