Admission Office: Where families start the college application process. This is the college "sales force" and a good place to gather initial information about the college.
Campus Development: If you have scads of extra money and want your child to attend a specific college, talk to this office and offer to donate a new wing, building or sports arena to the college. Your child will be accepted.
College Tax Credit: For couples earning $160,000 or less and single parents earning $80,000 per year or less. If you have declared the student as an exemption on your federal taxes, feed the amount paid for books, fees and tuition for that tax year into the tax system and you can qualify for up to $2,500 in a tax credit to reduce that taxes you pay.
Cost of Attendance (COA): Includes tuition and fees, room and board and, hopefully, books for $1,200/year and personal expenses/travel for $2,200 to $2,800/year.
CSS Financial Aid Profile: A parallel (to the FAFSA) financial aid application used by approximately 360 out of the 1800 standard 4-year colleges in the US. It requires additional information such as home equity, retirement assets, information from a non-custodial parent, the list goes on... We advise divorced families to avoid selecting only colleges that insist on this form in addition to the FAFSA. Failure to understand this form and its implications have been the cause of many families bleeding more wealth than they should.
Early Action: Allows the college to process an Early Application by a student in order to let that student know much earlier about student acceptance by the college. This can be a smart alternative to early decision.
Early Decision: Generally a way for the college to manipulate families into letting go of their other choices in favor of only shopping at one college. Families paint themselves into this financial corner, giving up all negotiating rights or more attractive offers way before they are presented with an award. I don't consider this a beneficial strategy even if the college tells you it increases the chances for student acceptance to that college. The exception occurs when the college agrees to fill 100% of your need based on early decision.
Expected Family Contribution: The financial amount that the federal formula on the FAFSA says your family can pay per year for college. The total cost of college amount above your EFC is called financial need. Most families average an EFC amount $4,500 per year more than it needs to be because they don't understand the strategies needed in their case to look as poor as possible. This is based on over 5500 individualized needs analyses. Not knowing how to lower the EFC costs families an average of $18,000 in lost opportunity over 4 years.
FAFSA: Free Application for Federal Student Aid is required by every standard college. Families insert their income, assets, and personal information along with the colleges where the student has applied. Application occurs in January for the following school year commencing in September. Prospective college students have their parents complete this form in January of their senior year. The FAFSA must be renewed each year by families of college students who will be attending the following year.
Federal Work Study: Students who qualify (usually lower income students) can get a job on campus and earn around $1,800 to $2,000 per year. This money will be considered as student earnings and also increase the student's AGI for that tax year.
Financial Aid Office: Interprets the need and sometimes the degree of merit for each student. This office makes the financial offer to each incoming student in April of their senior year.
Gap: The amount of unmet financial need in the college award. If you subtract your EFC amount from the Cost of Attendance amount and come up with $20,000 and notice that your award is only $16,000, you have a $4,000 gap. Sometimes colleges fill the gap by a parent plus loan.
Grants and Scholarships: This is free money that you do not pay back. Scholarship money is based on merit and the desirability of the student. Most scholarship money comes through the colleges. Grant money is based on financial need. For the 1,400 students that have negotiated the college maze with the four-step system, scholarship money averages about 40% and grant money, student subsidized loans and work study, averages about 60% of the $17,000 per year average.
Pell Grant: Federal money for college bound students from low-income families who have an EFC lower than $4,200. As the EFC goes lower the Pell Grant increases dollar for dollar (rounded) up to $5,550.
Perkins Loan: A subsidized government loan for students, usually low income students.
PIN: A personal identification number used by the college student and the parent to sign the FAFSA. In order to access the FAFSA form for renewals and updates, use the student PIN.
SEO Grant: Supplementary Economic Opportunity Grant for low income that accompanies the Pell Grant.
Special Circumstances: Can increase your financial need. According to the Higher Education Act of 1998, page 157, section 478, special circumstances are at the "Discretion of the Financial Aid Administrators" This section is as follows:
"Special circumstances may include tuition expenses at an elementary or secondary school, medical or dental expenses not covered by insurance, unusually high child care costs, recent unemployment of a family member, the number of parents enrolled at least half time in a degree, certificate or other program leading to a recognized educational credential..."
State Need Grant: See "Grants and Scholarships." Also for low-income students who financially qualify, usually at a state college.
Subsidized Loans: The sub-Stafford Loan (for everybody with financial need) and the Perkins Loan (usually for lower income) are interest deferred loans. This means the federal government pays the interest on these loans until six months after the student graduates from or drops out of college. At that point interest begins to add to the principal and the student must commence making payments on these loans. Despite constant media and consumer unhappiness with having loans as a result of a college education, I maintain that if somebody pays interest on the money you are using, it is still helpful . At least take it and put it in the parent's bank so you can make money on the interest.
Tuition and Fees Deduction: Tuition and fees expenses that can lower your Adjusted Gross Income if you are single with an AGI of $65,000 or less or married with and income of $130,000 or less.
Tuition Payment Plans: Many colleges offer a monthly payment plan. This allows a family to set the cost of college in their budget. It also can facilitate borrowing less money by reinforcing a "beans and rice" family budget.
Tuition Reduction: See "Grants and Scholarships." Also for low-income students who financially qualify, usually at a state college.
Unsubsidized Loans: These can be called unsubsidized Stafford Loans, Parent Plus Loans, and a whole host of other names depending on the college and the banks they deal with. Colleges even include these in the April award letters fooling many parents and students. Basically the college has just introduced you to their favorite bank. Do not consider these loans as part of a financial award package.