Understanding how to pay for college…

You’ve made it past the early deadlines of November 1  and December 1. Yes, there are still the regular deadlines of January 1 and January 15, but the pressure is off. Now is a great time to get serious about scholarship opportunities.

Let’s start with a Financial Aid Glossary. Below you’ll find a great vocabulary primer (today is just A-F) from https://studentaid.gov  to get started thinking about paying for the next four years of college:

An academic year is one complete school year at the same school, or two complete, half years at different schools. For schools that have a year-round program of instruction, nine months is considered an academic year.

Both the federal government and nonprofit organizations offer money for college to veterans, future military personnel, active duty personnel, or those related to veterans or active duty personnel,

Your annual taxable income is the amount of income used to determine how much tax you owe in a given year. This can include wages, salaries, bonuses, tips, investment income, and unearned income.

Cookies are bits of data that a website transfers to a computer’s hard drive. The most common use of cookies is for a website to determine your personal preferences. Some cookies disappear once you close the browser while some remain.

Credit refers to the amount of money you borrow and your ability to borrow to purchase goods and services. Credit is extended to you from a credit grantor with which you make an agreement to pay back the amount spent, plus applicable interest and fees, within an agreed-upon time.

Debt collection is the course of pursuing payments of loan debts due by borrowers.

Debt consolidation is a method of debt refinancing that involves taking out one loan to pay off others.

Default is failure to repay a loan outlined in the agreed promissory note. Most federal student loan default occurs when a payment isn’t made in more than 270 days. It can result in legal consequences and a loss of eligibility for additional federal student aid.

deferment is a temporary postponement of payment on a loan that is allowed under certain conditions and during which interest generally doesn’t accrue on certain types of subsidized loans.

Direct Consolidation Loan combines federal education loans into one loan for free via completion of the Federal Direct Consolidation Loan Application and Promissory Note. You will have a single monthly payment on the new Direct Consolidation Loan.

Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students use to help pay for education expenses.

A Direct Subsidized Loan is a federal student loan for which a borrower isn’t generally responsible for paying the interest while in an in-school, grace, or deferment period.

iscretionary income is a factor used in determining a borrower’s eligibility for certain repayment plans and/or loan rehabilitation. It’s the difference between annual income and a percentage of the poverty guideline for the borrower’s family size and state of residence.

arly action is a college admission policy that allows applicants to apply and receive notice of their admission early. Applicants accepted under early action are not under a binding agreement to attend that school and may submit applications to other schools.

Early decision is a college admission policy that allows applicants who commit to attend a school to apply and receive notice of their admission early. If an applicant is accepted, he or she agrees to attend that school and must withdraw all other applications.

An educational service agency is a regional public multiservice agency that is authorized by state law to develop, manage, and provide services or programs to local education agencies, such as public-school districts.
An eligible program is a program of organized instruction or study of a certain length that leads to an academic, professional, or vocational degree or certificate, or other recognized education credential.

An emancipated minor is someone who has been legally deemed an adult by a court in his or her state of residence. If you are an emancipated minor, you are considered an independent student and will not provide information about your parents on the FAFSA® form.,
An endorser is someone who agrees to repay the Direct PLUS Loan if the borrower becomes delinquent in making payments or defaults on the loan. The endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan.
An Endorser Code is an identifying number associated to a Direct PLUS Loan application. The code is used by an endorser when completing a Direct PLUS Loan endorser addendum to the Master Promissory Note (MPN) for the loan.

Enrollment status is reported by the school you attended, and indicates whether you are, or were, full-time, three-quarter time, half-time, less than half-time, withdrawn, graduated, etc.

Entrance counseling explains the obligations you agree to meet as a condition of borrowing a Direct Loan. Topics include: Understand Your Loans, Manage Your Spending, Plan to Repay, Avoid Default and Make Finances a Priority.

Exit counseling provides important information that you need as you prepare to repay your federal student loan(s). Topics include: Understand Your Loans, Plan to Repay, Avoid Default, and Make Finances a Priority.

The Extended Repayment Plan allows you to repay your loans over an extended period. Payments are made for up to 25 years. There are specific eligibility requirements to qualify for this plan.

ousehold size does not mean people who physically live with you. It’s about who you support financially. If you do not financially support anyone, you will just put 1 for yourself.

The Federal Family Education Loan (FFEL) Program was a program that worked with private lenders to provide education loans guaranteed by the federal government. The FFEL Program ended in 2010. All loans are now made through the Direct Loan Program.
The Pell Grant is the largest federal grant program offered to undergraduates. It is designed to assist students from low-income households. To qualify for a Pell Grant, a student must demonstrate financial need by completing and submitting the FAFSA® form.

A Perkins Loan was available to undergraduate, graduate, and professional students until Sept. 30, 2017; the program has since expired. The Perkins Loan is a subsidized loan, meaning the federal government pays the loan’s interest while the borrower is in school.

Federal student aid is aid from the government in the form of grants, loans, and/or work-study to assist students with college or career school. Students have to complete the FAFSA® form to apply for this aid.

The Federal Supplemental Educational Opportunity Grant (FSEOG) is a grant that is awarded to an undergraduate student who demonstrates exceptional financial need to help pay for their education. Awards can range from $100–$4000 and do not need to be repaid.

Federal Work-Study provides part-time jobs for undergraduate and graduate students with financial need. The program encourages community service work and work related to your field of study. To receive funds, you will need to be awarded work study and secure a job.

Financial aid is money to help pay for college or career school.

Financial awareness counseling provides tools and information to help you understand your financial aid and assist in managing your finances. Topics include: Understand Your Loans, Manage Your Spending, Plan to Repay, Avoid Default and Make Finances a Priority.

A period of time when your monthly loan payments are temporarily stopped or reduced. Interest will continue to be charged on your loans. Be aware that unpaid interest may be capitalized (added to your loan principal balance) at the end of your forbearance period.

An FSA ID consists of a username and password which gives you access to the U.S. Department of Education’s online systems and can serve as your legal signature when completing electronic documents.
While all this information is obviously relevant for families with high school seniors, it is most important for families with sophomores and juniors to prepare for what’s coming.

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Bierer is an independent college adviser based in Charlotte. Send questions to: lee@collegeadmissionsstrategies.comwww.collegeadmissionsstrategies.com


FAFSA4casteris an early eligibility estimator that can help you plan ahead when it comes to paying for college.

FAFSA4caster is a free financial aid calculator that gives you an early estimate of your eligibility for federal student aid. This information helps families plan ahead for college. You must use the Free Application for Federal Student Aid (FAFSA®) to apply for aid once you’ve decided to apply for admission and attend college.

Who should use FAFSA4caster?
How do I use FAFSA4caster?
What information does FAFSA4caster provide?

FAFSA4caster is not an application for aid; it’s a planning tool.

Who should use FAFSA4caster?

FAFSA4caster is for anyone who is not yet ready to file a FAFSA. You do not have to be a high school senior to use FAFSA4caster; in fact, the tool is recommended for juniors, and even as early as middle school.

Parents of younger students can use the tool to receive early estimates, create scenarios based on future earnings, and then establish college funding strategies. Adult students also can useFAFSA4caster to get an idea of what aid they might receive.

How do I use FAFSA4caster?

You can find FAFSA4caster at www.fafsa.gov—click on the appropriate box under “Thinking About College?”

In FAFSA4caster, you answer financial and other questions that are used to estimate your federal student aid eligibility. You may be able to answer most of the questions easily, but some of the questions may ask you to reference your personal records (for instance, your federal tax information or your bank statements). For each item, you should use the most current information you have. Be sure to answer all the questions on FAFSA4caster, even if you have to estimate or guess.

What information does FAFSA4caster provide?

When you submit FAFSA4caster, the tool displays a worksheet to help you determine the net cost of attending your chosen school. Here’s what you can expect to see on the worksheet:

  • At the top of the page, you can enter the school’s cost of attendance (there is a link to College Navigator in case you need to look up the cost).
  • Next, a number of sources of college funding are listed. FAFSA4caster indicates your estimated Federal Pell Grant amount (if any), Federal Work-Study amount (based on the average nationally), and maximum Direct Subsidized Loan and Direct Unsubsidized Loan
  • There are fields where you can fill in the amounts of state and college aid and private scholarships you expect (or hope) to get.
  • Once you click on “Calculate,” FAFSA4caster summarizes the cost, the total aid entered, and the difference (the net cost of attending college). Your estimated Expected Family Contribution (EFC) also appears. You can compare schools by changing cost of attendance, deleting state aid if you will be an out-of-state student at a particular school, amending the amount of aid available from the school, and so on.

Federal Student Aid

Financial aid from the federal government to help you pay for education expenses at an eligible college or career school. Grants, loans and work-study are types of federal student aid. You must com…

Federal Pell Grant  – A federal grant for undergraduate students with financial need.

Grant – Financial aid, often based on financial need, that does not need to be repaid (unless, for example, you withdraw from school and owe a refund).

Federal Work-Study

A federal student aid program that provides part-time employment while you are enrolled in school to help pay your education expenses.


A federal student aid program that provides part-time employment while you are enrolled in school to help pay your education expenses.

Subsidized Loan

A loan based on financial need for which the federal government pays the interest that accrues while the borrower is in an in-school, grace, or deferment status. For Direct Subsidized Loans fi…

Unsubsidized Loan

A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues througho…

College Aid

Financial aid from your college or career school.

Expected Family Contribution (EFC)

This is the number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your FAFSA®, the appl…

State Aid

Financial aid from a student’s state of legal residence.

Out-of-state Student

A student who is attending a college or career school outside of his or her state of legal residence.

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