Understanding Grants, Scholarships, Loans and Other Financial Aid Terms
In discussing the world of financial aid it might seem like people are speaking in a different language. Here are some definitions that may help.
Award Letter: A letter from Talladega College that lists all eligible academic and need-based financial aid that is being offered to a student.
Entrance, Master Promissory Note (MPN) and Exit Interviews: Student loan recipients must complete entrance, mpn once at the beginning of their college career and exit interviews at the end of their college career respectively. These online interviews consist of a series of questions and answers that explain the responsibilities and consequences of loan repayment and default. Failure to complete these requirements can result in a hold on loan disbursements and/or student records.
Expected Family Contribution: The number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provided in your FAFSA application. Your EFC is reported to you on your Student Aid Report (SAR).
FAFSA: Free Application for Federal Student Aid. This is the first step in applying for financial aid and must be submitted each academic year.
Financial Aid – Covers any forms of financial assistance you receive to help you pay for your education. These include:
- Grants: A grant is a gift. It does not have to be repaid and it is based on the student’s financial need.
- Loans: Loans are funds borrowed by the student and/or parent. In most cases, loans must be repaid with an interest charge and have a time limit for repayment.
- Scholarships: An academic scholarship is an achievement award – based on your academic record – which is awarded once by the Admissions Office during the admissions process.
- Work Study: Work Study is an on-campus job approved by Financial Aid, often as part of a financial aid package.
Student Aid Report: The Student Aid Report, or SAR, is generated from the information you submit on your FAFSA. A copy is sent to you and to the colleges that you request through your FAFSA. It will also contain your Expected Family Contribution, which is the number that’s used to determine your eligibility for federal student aid.
Visit studentaid.ed.gov for detailed information and current federal government guidelines.