Financial Aid Glossary

For your convenience, The Rhode Island Foundation has compiled a glossary of frequently-used financial aid terms:

• Free Application for Federal Student Aid (FAFSA)

  is the form necessary to apply for federal and state grants, loans and student employment programs. A FAFSA is filed each year that a student wants to apply for aid. It is never necessary to pay for this to be submitted.
  
  

• Expected Family Contribution (EFC)

  is the amount that has been calculated as the family portion to contribute based on the family and the student’s income and assets. The EFC is the same, regardless of the college or university the student attends.
  
  

• Cost of Attendance (COA)

  is the tuition and fees, room and board, books, supplies, transportation, personal and miscellaneous expenses incurred by the average family in an academic year. The COA varies with each college or university.
  
  

• Need for Financial Aid

  is the COA minus the EFC. This is the ceiling of all grants, loans and/or student employment funds you can receive. Because the COA can vary, so, too, can the financial aid you are awarded from school to school.
  
  

• Financial aid award

  is the amount that will typically contain a mixture of grants or scholarships, called gift aid, and loans and student employment, called self-help aid, and must either be repaid or earned.
  
  

• Federal Pell Grant

  is available to students with exceptional need and can range from $400 to $5,000 per academic year. A Pell Grant is guaranteed by the Department of Education and is available regardless of the institution a student attends. The amount may vary based on the COA.
  
  

• Federal Supplemental Educational Opportunity Grant (SEOG)

  is available to students with exceptional need, with priority given to students with Pell eligibility. SEOGs are campus-based funds and are awarded based on availability at each institution. They range from $100 to $4,000 per year.
  
  

• Institutional grants and scholarships

  are specific to each institution and based on criteria determined by that institution. A list of those available is usually in the catalog or at the Web site and can range from $100 up to the cost of tuition.
  
  

• Student loans

  are available through either the William D. Ford Direct Loan or the Federal Direct Stafford Loan program. The student borrows the funds and begins repayment of the principal six months after graduation. A student loan is either subsidized or unsubsidized. A subsidized loan is based on need and the federal government pays the interest. An unsubsidized loan is not need-based and the student pays the interest. The interest rate for Stafford Loans is 6.8% through 2013. Your Financial Aid Office can advise you about the differences.
  
  

• Perkins Loans

  are borrowed by students with exceptional needs and repaid beginning nine months after graduation. They are also campus-based and made on availability of funds. Many schools offer lesser amounts because of limited funds. There are no fees, and the interest rate is 5%.
  
  

• Federal work-study

  is campus-based and allocated on student needs and availability of funds. Students work 12 to 20 hours per week, are paid at least minimum wage and receive a check at least once a month. The money is used to pay incidental expenses.