Financial aid has its own abbreviations, vocabulary and terms. Thus, before you sign on the dotted line, get to know what these financial aid terms mean.
ACT – American College Testing Program. This is a uniform multiple-choice test that measures a student’s academic aptitude in English, math, science and reading and is given to high school students as an entrance exam to some colleges and universities. ACT.
Accrual date – This is the date on which interest charges on the educational loan begins to accumulate.
Special condition form – This is an internal student worksheet which is required to be filled by a student whose financial situation changes in the current year.
ACG - Academic Competitiveness Grant. It is a Federal Grant which is given to students as defined by Federal guidelines. The grant is up to $750 for first-year undergraduates and up to $1,300 for second-year undergraduates.
Balloon payment – This payment is larger than usual which is paid off the outstanding balance of a loan without the penalty. Balloon payments are not allowed by all loans, however, many educational loans allow balloon payments.
Collateral – The property that is used to secure a loan is known as collateral. This is done, if in case the borrower defaults on the loan then the lender can seize the collateral.
Deferment – It is the temporary postponement of loan payment for a particular period of time.
COA – Cost of Attendance. It refers to the total cost of attending the college including tuition and mandatory fees, stationery, housing, transportation and other expenses.
Credit sensitive – This refers to a student who may require a credit check prior to lending.
Delinquency – A loan which is 30-60 days past due with no payments being made which can result in default.
Expected Family Contribution – This is the amount of money that your family is required to pay for one year to your college education.
Forbearance – This allows the borrowers to suspend the payments temporarily or make reduced payments for sometime. However, interest continues to amount during forbearance.
Lifetime Learning Tax Credit – According to income eligibility guidelines, a Federal income tax credit of around $1,000 per household is granted annually.
Master Promissory Note – This is a document that a borrower must sign while borrowing a loan. The document outlines the terms of the loans.
Maturity Date – This is the date on which the loan reaches its maximum payment period at the same time the loan must be paid in full.
Need-Blind Admissions – This is a policy in which the admissions department of a school/college does not take into contemplation a student's incapability to disburse for their college expenses.
Portable funding – This is a financial aid that is not specific to any college or University. This allows the funds to be transferred to another college with the student’s transfer.
Renewable Scholarships – This is the financial aid that is awarded to students for more than one year.
Unmet need - The funds that are needed to meet the student’s schooling that is not met by grants, scholarships, loans etc.