Financial Aid Glossary


Accrual Date: The accrual date is the date on which interest charges on an educational loan begin to accrue.

AGI (Adjusted Gross Income): The remaining income after allowances (taxes and a basic living allowance) has been subtracted in the Federal Methodology.

Award Period: The academic semester for which financial aid is requested (or received).

Award Year: The academic year is defined as a set number of semesters as determined by the institution.


Cost of Attendance or Cost of Education (COA/COE): The total amount it should cost a student to go to school, including items such as, tuition and fees, room and board, books and supplies, transportation, and personal expenses.

CPS (Central Processing System): The system used to process financial aid applications, renewals, and corrections through the United States Department of Education.


Deferment: occurs when a borrower is allowed to postpone repaying the loan. If the student has a subsidized loan, the federal government pays the interest charges during  the deferment period. If they have an unsubsidized loan, they are responsible for the interest that accrues during the deferment period. The student 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 halftime. If they do not qualify for a deferment, they may be able to get a Forbearance. Students cannot get a deferment if their loan is in default.

Disbursement: Disbursement is the release of loan funds to the school for delivery to the borrower. The payment will be made co-payable to the student and the school. Loan funds are first credited to the student’s account for payment of tuition and fees. Any excess funds are then paid to the student in cash or by check for the purpose of paying for other educational expenses.


EIC (Earned Income Credit): This is a tax benefit for working people with low or moderate incomes.

Enrollment Status: An indication of whether a student is a full-time or part-time student. Generally, students must be enrolled at least half-time (and in some cases full-time) to qualify for financial aid.

EFC (Expected Family Contribution): the amount of money that the family is expected to be able to contribute toward the student’s education as determined by the Federal Methodology need analysis formula through the FAFSA.


FAFSA (Free Application for Federal Student Aid): The FAFSA is the application used to apply for financial aid.

Family Educational Rights and Privacy Act:

Federal Direct Student Loan Program: The Federal Direct Student Loan Program (FDSLP) is similar to the Federal Family Education Loan Program (FFELP). The US government provides the funds for these loans directly to students and their parents through their schools. Benefits of the program include a faster turn-around time and less  bureaucracy than the old “bank loan” program. The Federal Direct Student Loan  Program (FDSLP) includes the Federal Direct Stafford Loan (Subsidized and  Unsubsidized) and the Federal Direct Parent Loan for Undergraduate Students (PLUS).  For more information about Direct Loans, contact the Direct Loan Servicing Center at 1-800-848-0979.

Federal Family Education Loan Program (FFELP): The 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)). Private lenders, such as banks, credit unions, and savings & loan associations provided funds for these loans. Effective July 2010, the FFELP Program was phased out and replaced with Direct Lending. The Department of Education now provides funds for these loans. The loans are guaranteed against default by the federal government.

Federal Methodology: The need analysis formula used to determine the EFC. The Federal Methodology takes family size, the number of family members in college,taxable and nontaxable income, and assets into account. Unlike most Institutional Methodologies, however, the Federal Methodology does not consider the net value of the family residence.

Federal Processor: The Federal Processor is the organization that processes the information submitted on the Free Application for Federal Student Aid and uses it to compute eligibility for federal student aid.

Federal Work-Study: The Federal Work-Study (FWS) program provides 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 cheaper for departments and businesses to hire the student. For this reason, work-study students often find it easier to get a part-time job. Eligibility for FWS is based on need. Money earned from a FWS job is not counted as income for the prior year’s need analysis process.

Fellowship: A form of financial aid given to graduate students to help support their education. Some fellowships include a tuition waiver or a payment to the university in place of tuition. Most fellowships include a stipend to cover reasonable living expenses (for example, just above the poverty line). Fellowships are a form of gift aid and do not have to be repaid.

Financial Aid: Money provided to the student and the family to help them pay for the student’s education. Major forms of financial aid include gift aid (grants and scholarships) and self help aid (loans and work).

(FAN) Financial Aid Notification: is an official document issued by the Financial Aid Office that lists all of the financial aid awarded to the student. This letter provides details on their analysis of your financial need and the breakdown of your financial aid package according to amount, source, and type of aid. The FAN letter will include the terms and conditions for the financial aid and information about the cost of attendance. Students are required to access the myUNT portal to indicate whether they accept or decline each source of aid.

Financial Aid Package: The financial aid package is the complete collection of grants, scholarships, loans, and work-study employment from all sources (federal, state, institutional, and private) offered to a student to enable them to attend the college or university.

Financial Need: The difference between the COA and the EFC is the student’s financial need – the gap between the cost of attending the school and the student’s resources. The financial aid package is based on the amount of financial need. The process of determining a student’s need is known as need analysis.

FSAIC (Federal Student Aid Information Center): The center answers general student aid questions, and may be reached at 1-800-4-FED-AID (1-800-433-3243).

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 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. Students cannot receive forbearance if your loan is in default.

Free Application for Federal Student Aid (FAFSA): The FAFSA is used to apply for Pell Grants and all other aid. Complete your FAFSA via web at . As the name suggests, no fee is charged to file a FAFSA. Follow the directions carefully to  ensure proper and efficient processing.


Gift Aid: Gift aid is financial aid, such as grants and scholarships, which does not need to be repaid.

Grace Period (for loan repayment): The grace period is 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 kick in if the borrower leaves school for a reason other than graduation or drops below half-time enrollment. Depending on the type of loan, students will have a grace period of six months (Stafford Loans) or nine months (Perkins Loans) before they must start making payments on your student loans. The PLUS Loans do not have a grace period.

Grant: A grant is a type of financial aid based on financial need that the student does not have to repay.

Gross Income: Income calculated before taxes, deductions, and allowances have been subtracted.


Half-Time: Half-time enrollment depends upon the program and term attended.  Please click FAQs for more information.

HELP (Health Education Loan Program): This program provides educational loans to Texas students enrolled in the following programs of study: medicine, osteopathy, dentistry, podiatry, veterinary medicine, pharmacy, public health, nursing, and allied health.


Income: Income is the amount of money received from employment (salary, wages, tips), profit from financial instruments (interest, dividends, capital gains), or other sources (welfare, disability, child support, taxable Social Security, and pensions).


Lender: A lender is a financial institution that provides funds to the student or parent for an educational loan.

Loan: A loan is a type of financial aid that must be repaid, with interest. The Federal Student Loan Program is 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. The Federal Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.

Loan Interviews: Students with educational loans are required to complete entrance counseling before they receive their first loan disbursement Students are required to complete a loan exit counseling session before they graduate or otherwise leave school.


Master Promissory Note: To take out a Direct Loan for the first time, you must  complete a Master Promissory Note (MPN). You can complete the MPN online at the website. The MPN is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan(s). If you are applying for a Direct PLUS for the first time as a graduate/professional student, you’ll need to complete and sign a PLUS MPN that is separate from the one that you use for your Direct Subsidized and Unsubsidized  Loans.

MSPF (Minnie Stevens Piper Foundation): The Foundation has a student loan  program for full-time students who are U.S. citizens/permanent residents and Texas residents attending Texas colleges or universities.   


Need-Based: Financial aid that is need-based depends on your financial situation. Most government sources of financial aid are need-based.

Net Income: This is income after taxes, deductions, and allowances have been subtracted.

NSLDS (National Student Loan Data System): The U.S. Department of Education’s Central database for student aid where students can access and inquire about their Title IV loans and/or grant data.


Origination Fee: The origination fee is paid to the bank to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed, and typically run to 3% of the amount disbursed. A portion of this fee is paid to federal government to offset the administrative costs of the loan.

Outside or Agency Scholarship: An outside or agency scholarship is one that comes from sources other than the school and the federal or state government.


Packaging: Packaging is the process of assembling a financial aid package.

Perkins Loan: Formerly the National Direct Student Loan Program, the Perkins Loan allows students to borrow up to $8,000/year for graduate school. The Perkins Loan has one of the lowest interest rates 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. At UNT, graduate students are given first priority for Perkins funding

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 Student: A student pursuing advanced study in law or medicine, education, pharmacy, or dentistry.

Promissory Note: The promissory note is the binding legal document that must be signed by the student borrower before loan funds are disbursed by the lender. The student should keep this document until the loan has been acknowledged by the lender as paid in full.


Renewable Scholarships: A renewable scholarship is a scholarship that is awarded for  more than one year. Usually the student must maintain certain academic standards to be eligible for subsequent years of the award.

Repayment Schedule: The repayment schedule discloses the monthly payment, interest rate, total repayment obligation, payment due dates, and the term of the loan.


SAP (Satisfactory Academic Progress): Students must meet certain academic criteria in order to continue receiving federal financial aid.

(SAR) Student Aid Report: The Student Aid Report (SAR) summarizes the information included in the FAFSA. The SAR will also indicate Pell Grant eligibility, if any, and the Expected Family Contribution (EFC). The student will receive a copy of your SAR four to six weeks after the FAFSA has been filed. The student should review the SAR and  correct any errors on part 2. If the Processor was able to calculate an EFC, the student will be able to submit the SAR to the FAO for corrections (in most cases). If an EFC was not calculated, the student will need to send the corrections to the Processor. It is advised that the student keep a photocopy of the SAR for their records. To request a duplicate copy of a SAR, the student would need to call 1-800-433-3243.

Scholarship: A scholarship is a form of financial aid given to 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.

SDS (Scholarship for Disadvantaged Students): This program provides scholarships to full-time, financially needy students from disadvantaged backgrounds, enrolled in health professions and nursing programs. Participating schools are responsible for selecting scholarship recipients, making reasonable determinations of need, and providing scholarships that do not exceed the cost of attendance.

Selective Service: The Selective Service Administration executes registration for the military draft. Male students who are US citizens and have reached the age of 18 and were born after December 31, 1959 must be registered with Selective Service to be eligible for federal financial aid.

Servicer: A servicer is an organization that collects payments on a loan and performs other administrative tasks associated with maintaining a loan portfolio. Loan servicers disburse loans funds, monitor loans while the borrowers are in school, collect payments,  process deferments and forbearances, respond to borrower inquiries, and ensure that the loans are administered in compliance with federal regulations and guarantee agency requirements. EduServ is the largest private servicer of student loans in the US.

Summer Leader: For summer leader schools, the award year begins with the summer semesters. UNTHSC is a summer leader school.

Summer Trailer: For summer trailer schools, the award year ends with the summer semesters.


Title IV School Code: When a student fills out the Free Application for Federal Student  Aid, they need to supply the Title IV Code for each school to which they are applying.  This code is a six-character identifier that begins with one of the following letters: O, G, B, or E. The Title IV code for UNTHSC is 009768

TPEG (Texas Public Education Grant): The purpose of this program is to provide grants to students with financial need, and each educational institutional sets its own priorities in making awards.


US Department of Education (ED): The US Department of Education administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loans, the Federal Stafford Loans, and the Federal PLUS Loans.


Variable Interest: In a variable interest loan, the interest rate changes periodically. For example, the interest rate might be pegged to the cost of US Treasury Bills (for example,T-Bill rate plus 3.1%) and be updated monthly, quarterly, semi-annually, or annually.

Verification: Verification is a review process in which the FAO determines the accuracy of the information provided on the student’s financial aid application. During the verification process the student and parent will be required to submit documentation for the amounts listed (or not listed) on the financial aid application. Such documentation may include signed copies of the most recent Federal income tax returns for the student, spouse (if any) and their parents. Financial aid applications are randomly selected by the Federal processor for verification, with most schools verifying at least 1/3 of all applications. If any discrepancies are uncovered during verification, the financial aid office may require additional information to clear up the discrepancies. Such discrepancies may cause a student’s final financial aid package to be different from the initial package described on the award letter they received from the school. If the student refuses to submit the above mentioned documentation, the financial aid package will be canceled and no aid will be awarded.

Veteran: For Federal financial aid purposes such as determining dependency status, a veteran is a former member of the US Armed Forces (Army, Navy, Air Force, Marines, or Coast Guard) who served on active duty and was discharged other than dishonorably (i.e., received an honorable or medical discharge). A student is considered a veteran even if they serve just one day on active duty – not active duty for training – before receiving your DD-214 and formal discharge papers. (Note that in order for a veteran to be eligible for VA educational benefits, they must have served for more than 180 consecutive days on active duty before receiving an honorable discharge. There are exceptions for participation in Desert Storm/Desert Shield and other military campaigns.) ROTC students not considered veterans. Since the 1995-96 academic year, a person who was discharged other than dishonorably from one of the military service academies (the U.S. Military Academy at West Point, the Naval Academy at Annapolis, the Air Force Academy at Colorado Springs, or the Coast Guard Academy at New London) is considered a veteran for financial aid purposes. Cadets and midshipmen who are still enrolled in one of the military service academies, however, are not considered veterans. According to the US Department of Education’s Action Letter #6 (February 1996), “a student who enrolls in a service academy, but who withdraws before graduating, is considered a veteran for purposes of determining dependency status.” Having a DD-214 does not necessarily mean that a student is a veteran for financial aid purposes. As noted above, a student must have served on active duty and received an honorable discharge.


This page was last modified on June 7, 2017