Understanding Financial Aid TermsWhen you first set out on your journey to your financial aid destination, the course may seem unclear. Terms, acronyms, and phrases pop up without explanation. How can you chart a course when you don’t completely understand the signs along the way? The STLCOP Office of Financial Aid is here to help. Not only do we work with families to develop individualized financial aid packages that provide the funds needed to help pay for college expenses, we are also happy to answer questions and help familiarize you with the financial aid process.
- Fin Aid is a website providing student financial aid information, advice, and tools. Here you can find a financial aid glossary covering acronyms from ACT to VA and terms from “academic year” to “work-study.”
- Because many types of financial aid are determined by and processed through the U.S. Department of Education, a good resource is the government’s Federal Student Aid Glossary. Terms and phrases commonly used on government forms and financial aid applications are covered in detail.
- Another good glossary is available from FastWeb, an online resource that matches students to relevant scholarship opportunities and provides information about other types of financial aid.
We Can Help You Navigate
We encourage students to schedule a financial aid appointment to discuss questions in person. Contact the Office of Financial Aid at 314.367.8700 ext. 8328 (or toll-free at 800.2.STLCOP) or email Asha Hall, coordinator of financial aid, at email@example.com.
A Short Glossary of Key Words
Although there are several good financial aid glossaries online, you will see some key words used time after time on the STLCOP Web site. Here are some brief definitions of the most commonly used terms.
- FAFSA: This common acronym stands for “Free Application for Federal Student Aid” and refers to the form required by the government used to determine the expected family contribution to a student’s educational expenses based on key financial information. The expected family contribution forms the basis for determining eligibility for various federal grants and loans.
- Financial Aid Package: This refers to the complete collection of grants, scholarships, loans, and work-study offered to a student based on financial need and merit. Students may accept or decline individual components of a financial aid package.
- Grant: Another form of financial aid, which does not need to be repaid, grants are often awarded to students who exhibit financial need. As noted above, information gleaned from the FAFSA is often the basis for determining eligibility for federal grants.
- Master Promissory Note (MPN): This is a legal document that borrowers must sign before receiving a loan. By signing, the borrower promises to repay the loan, with interest, in specified installments.
- PLUS: This acronym stands for “Parent Loans for Undergraduate Students” and is a type of federal student loan in which parents can borrow money to pay for expenses of their dependent children who are enrolled in college. PLUS loans are offered to parents who pass a credit check.
- Scholarship: In the world of financial aid, scholarship refers to a sum of money or other aid granted to a student because of merit, need, or the like to pursue his or her studies. Scholarships do not need to be repaid. STLCOP students are recipients of scholarships awarded by the College and by external organizations or institutions.
- Student Loan: Student loans are borrowed specifically to cover college expenses. Repayment is not required until after graduation. Many loans are offered by the federal government, but private banks or financial institutions also lend money to students. Private student loans may have different repayment terms than federal loans, and some may require repayment to begin prior to graduation.
- Subsidized Student Loan: A subsidized loan is one in which the government pays the interest while the student is enrolled in college. Awarded to students who demonstrate financial need, the federal Stafford and Perkins loans are among the most common.
- Unsubsidized Student Loan: Unlike a subsidized loan, unsubsidized loans accrue interest while the student is enrolled in college. This interest is added to the balance that is owed by the student under the loan’s repayment terms. For students who do not qualify for subsidized loans based on financial need, unsubsidized loans are another option.
- Work-study: This term refers to a plan in which a student works, usually for a few hours per week on campus. Students must qualify for work-study based on their FAFSA and exhibit some degree of financial need. Like any other job, students are paid for the hours worked, with their earnings put toward their college expenses.