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Glossary of Terms
ATB or Ability to
Benefit
– Test of measured knowledge used to determine a
student’s ability to succeed in college level work. If a student has not
graduated from High School or has not received a GED, he must pass an approved
ATB test. Trinity Valley Community College uses the Compass Test to meet the
ATB requirement. Passing scores for financial aid purposes are as follows:
Reading – 62, PreAlgebra/Numerical – 25, Writing – 32 (scaled scores only).
Academic Year
– The period during which school is in session. At
TVCC a 9-month academic year is from September through May (Fall and Spring
semesters); 12 months is September to August (Fall, Spring, and Summer).
Award Letter
– A Financial Aid Notification that lists all of the
financial aid awarded to the student. It will show the amount, source and type
of aid awarded.
Award Year
– The academic year for which financial aid is
requested and/or received. Typically this is a 9-month award/academic year
(from September through May) unless aid is specifically requested for the
summer.
Budget
– An amount based on the average cost of education for
a 9-month school year. This amount is used to determine eligibility for
financial aid. Also known as the Cost of Attendance (COA), the budget includes
tuition and fees, books and supplies, room and board, transportation, and
various other items.
Cancellation
– Cancellation of a loan means that the student is no
longer responsible for paying the balance on the loan. Cancellation can occur
in several ways. Sometimes loans can be cancelled or discharged under certain
circumstances, such as death or permanent disability of the borrower. Sometimes
a loan must be cancelled before it is released to the student account. This can
happen because of a recent eligibility change or because of an over-award
(student receives additional grant or scholarship aid).
Capitalization
– The practice of adding interest to the principal or
loan amount, instead of paying the interest while in school. Through
capitalization, a student can put off payments on an unsubsidized loan until
after their class hours drop below half time status, but the amount owed after
college will increase as the interest is accrued on the capitalized interest each month.
Capitalization costs you money in the long run.
COA or Cost of
Attendance – Also known as the Cost of Education or “budget” The
total amount it should cost the student to go to school, including tuition and
fees, room and board, allowances for books and supplies, transportation, and
personal and incidental expenses. Loan fees, if applicable, may also be
included in the COA. Child care and expenses for disabilities may also be
included at the discretion of the financial aid administrator. Schools
establish different standard budget amounts for students living on-campus and
off-campus, married and unmarried students, and in-state and out-of-state
students.
Default
– Failure to repay or otherwise meet the terms and
conditions of a loan . For most student loans, it takes nine months (270) days
of delinquent payments for a loan to go into default. The penalties for
defaulting include loss of financial aid ability, garnishing wages, a bad credit
rating, seized tax refunds, and loss of monthly payment options (the whole loan
may become due and payable at once).
Deferment –
When a borrower
is allowed to postpone repayment of the loan for a variety of reasons. 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
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, and loans in default are not
eligible for a deferment.
Delinquency –
When a borrower
fails to make a schedule payment for a student loan on time the student is
considered delinquent in payment. There may be late fees charges, and if the
borrower misses payments for nine months, they will be considered in default.
Disbursement –
The release of
loan funds to the school for delivery to the borrower. The Disbursement Date is
not the date the loan check is available for the student to pick up. The
Financial Aid and Business Offices must have time to process the checks before
releasing them to the student. Generally, loan checks are available to be
picked up at regular registration for each semester, and on the 2nd
and 4th Fridays of each month thereafter.
Disclosure
Statement –
A statement issued to
the borrower by the lender that provides information about the actual cost of
the loan, including the interest rate, origination, insurance, loan fees and any
finance charges.
Entrance
Loan
Counseling
–
Required counseling for
all student borrowers during which the terms and conditions of the loan are
explained. The counseling session is conducted online and a test is
administered to ensure understanding.
Exit Loan
Counseling
– A
required session for student borrowers who are graduating or otherwise leaving
school, or dropping below half-time enrollment, during which the terms and
repayments of the loan(s) are explained.
EFC
or
Expected
Family
Contribution
–
The amount a
student (and parents, if dependent) is expected to pay towards the cost of
attending college. This figure accurately determines eligibility for financial
aid. The EFC 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 COA and the EFC is the student’s financial need, and is
used in determining the student’s eligibility for need-based financial aid such
as grant aid and subsidized Stafford loans.
FAFSA
–
Free Application
for Federal Student Aid used to apply for federal and state financial aid. A
new FAFSA is released each year and can be completed beginning January 2nd
before the Fall semester you plan to start college.
FFELP
or
Federal
Family
Education
Loan
Program
–
Includes the
Federal Stafford Loan (Subsidized and Unsubsidized) and the Parent Loan for
Undergraduate Students (PLUS). Private lenders, such as banks, credit unions
and savings & loan associations provide the funds for these loans. These loans
are guaranteed against default by the federal government.
Financial
Aid
Package
–
Grants, scholarships, loans
and work-study employment offered to a student to help them afford their
education. Typically the financial aid package is presented to the student in
the form of an award letter or financial aid notification.
Financial
Need –
Financial Need
represents the amount of money the student needs to afford their education.
This is also known as unmet need. It is determined by the following
calculation:
Cost
of Expected Family Other Aid Awarded Financial
Attendance - Contribution - (i.e. Scholarships
= Need
(COA)
(EFC) etc)
Forbearance –
During
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 usually granted in cases of extreme
financial hardship or other unusual circumstances when the borrower does not
qualify for a deferment. You can not receive a forbearance if your loan is in
default. Forbearance differs from a deferment in that it is not a legal
requirement; it is given at the lender’s discretion.
Grace
Period
–
Period of time
during which a borrower is not required to make payments on a student loan.
Grace periods can last as long as 6 months and normally begin after the student
is no longer enrolled at least half-time.
Half-Time
–
A student must be
enrolled at least half-time to be eligible for aid and some programs may require
full-time enrollment for eligibility. Half-time is generally counted as a
minimum of six (6) credit hours in a 16-week semester; it is counted as a
minimum of three (3) credit hours in a 6-week semester, and a minimum of five
(5) credit hours in a 12-week semester.
ISIR
or
Institutional
Student
Information
Record
–
An electronic
version of the Student Aid Report (SAR) sent to all schools who are listed in
Step 6 of the FAFSA application.
Promissory
Note
–
A written,
legally binding promise to repay a loan. The promissory note outlines the terms
and conditions of the loan, including repayment schedule, interest rate,
deferment policy, and cancellation requirements.
SAR or
Student
Aid
Report
–
This a report sent to the
student by the Department of Education after completing the FAFSA. This report
is also sent to all schools listed on your FAFSA application and is called an
ISIR (Institutional Student Information Record).
Satisfactory
Academic
Progress
–
Refers to the
schools policy concerning the minimum numbers of hours that must be completed
each semester, the maximum time frame, and the minimum Grade Point Average (GPA)
required while receiving financial aid.
Verification
–
A review process
through which a Financial Aid Office must request documentation from a financial
aid applicant to verify the accuracy of the information provided on the
application.
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