Glossary: A thru L: M thru Z >

MERIT-BASED: Financial aid that is merit-based depends on your academic, artistic, or athletic merit, or some other criteria, and does not depend on the existence of financial need. Merit-based awards use your grades, test scores, hobbies, and special talents to determine your eligibility for scholarships.

METHODOLOGY: Refers to the system used to calculate the Expected Family Contribution (i.e., the Federal Need Analysis Methodology).

MILITARY SCHOLARSHIP: Reserve Officer Training Corps (ROTC) scholarships available for the Army, Navy, and Air Force at many colleges and universities throughout the United States. These scholarships cover tuition and fees, books and supplies, and include a subsistence allowance.

NATIONAL HEALTH SERVICE CORPS SCHOLARSHIP (NHSC): Scholarship program for students who pursue full-time courses of study in certain health professions disciplines, and are willing to serve as primary care practitioners in under served areas after completing their education.

NATIONAL AND COMMUNITY SERVICE: A program established through the National and Community Service Trust Act of 1993 designed to reward individuals who provide community service with educational benefits and/or loan forgiveness or cancellation.

NEED:  Financial need is simply defined as the difference between the student's cost of attendance and the family's ability to pay these costs, the EFC. For programs other than the Federal Pell Grant Program, other aid the student receives, known as resources or estimated financial assistance, are also subtracted from the cost of attendance to determine financial need.

NEED ANALYSIS: Nee analysis is the process of determining a student's financial need by analyzing the financial information provided by the student and his/her parents (and spouse, if any) on a financial aid form. The student must submit a need analysis form to apply for need-based aid. Need analysis forms include the Free Application for Federal Student Aid (FAFSA).

NEED ANALYSIS FORMULA: Defines the data elements used to calculate the Expected Family Contribution (EFC); there are two distinct formulas: regular and simplified. The formula determines the EFC under the Federal Need Analysis Methodology.

NEED-BASED AID: Student assistance awarded because a student's financial circumstances would not permit him/her to afford the cost of a postsecondary education. Most government sources of financial aid are need-based.

NON NEED-BASED AID: Aid based on criteria other than need, such as academic, musical, or athletic ability. Also, refers to federal student aid programs where the expected family contribution (EFC) is not part of the need equation.

OUTSIDE SCHOLARSHIP: An outside scholarship is one that comes from sources other than the school and the federal or state government.

OUT-OF-STATE STUDENT: An out-of-state student has not met the legal residency requirements for the state (12 consecutive months), and is often charged a higher tuition rate at public colleges and universities in the state.

OVER PACKAGED:  If an applicant receives financial aid dollars and later is determined to have exceeded their "need" based on new data, the individual's account will be classified as over packaged (over awarded.) The student  is responsible for any overpayments.

OVERPAYMENT: An overpayment is created whenever a student has received federal grant or loan payments in excess of his or her eligibility. Overpayments may occur when a student receives additional assistance that was not considered when he or she was first packaged. Overpayments may also be caused by misreported information on the application record that is later corrected, miscalculated EFCs or costs of attendance, payments to an ineligible student, or payments made in excess of grant or loan maximums. An overpayment may result when a student withdraws or drops out before the end of the payment period and has received a disbursement in excess of the amount he or she was entitled to for the time period he or she was actually enrolled. A student who owes an overpayment is ineligible for additional federal student aid payments until the overpayment is satisfied. Is some cases, however, it may be the school which is required to repay the overpayment.

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

PARENT CONTRIBUTION (PC): Estimate of the portion of your educational expenses that the federal government believes your parents can afford. It is based on their income, the number of parents earning income, assets, family size, the number of family members currently attending a college or university, and other relevant factors. Students who qualify as independent are not expected to have a parent contribution.

PELL GRANT: The Pell Grant is a federal grant that provides funds of up to $4,050/year based on the student's financial need.

PERKINS LOAN: Formerly the National Direct Student Loan Program, the Perkins Loan allows students to borrow up to $4,000 a year (maximum of $20,000 as an undergraduate). The Perkins Loan has one of the lowest interest rates (which is subsidized while the student is in school) and is awarded by the financial aid administrator to students with exceptional financial need. The student must have applied for a Pell Grant to be eligible.

PRINCIPAL (of a loan): The amount of money borrowed through a loan; does not include interest or other charges, unless they are capitalized.

PROFESSIONAL JUDGEMENT (PJ): For need-based federal aid programs, the Financial Aid Administrator (FAA) can adjust the EFC, adjust the COA, or change the dependency status (with documentation) when extenuating circumstances exist.

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 promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy, and cancellations. The student should keep this document until the loan has been repaid.

RENEWAL FAFSA: One type of FAFSA which resembles a SAR and bears the same questions as the FAFSA. The Renewal FAFSA is preprinted with the student's prior year responses to certain items which are likely to remain constant from year to year (i.e., your name, SSN, DOB, address, etc.).

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. Some renewable scholarships will require the student to reapply for the scholarship each year; others will just require a report on the student's progress to a degree.

ROTC SCHOLARSHIP PROGRAM: Competitive scholarship that pays for tuition, fees, books and a monthly living stipend and other benefits in exchange for participating in drills and classes during the academic year, military camp during the summer, and, upon graduation, full-time active duty in the military for at least four years.

SALLIE MAE: Sallie Mae, formerly known as the Student Loan Marketing Association (SLMA), is the nation's largest secondary market and holds approximately one third of all educational loans.

SAR INFORMATION ACKNOWLEDGMENT: A non-correctable one-page Student Aid Report (SAR). Students who file electronic applications or who make electronic corrections to applicant information through a school receive this acknowledgment.

SATISFACTORY ACADEMIC PROGRESS: A student must be making Satisfactory Academic Progress (SAP) in order to continue receiving federal aid. If a student fails to maintain an academic standing consistent with the school's SAP policy, he/she is unlikely to meet school's graduation requirements.

SCHOLARSHIP: A form of financial aid given to undergraduate students to help pay their education. Most scholarships are restricted to repaying 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.

SECONDARY MARKET: A secondary market is an organization that buys loans from lenders, thereby providing the lender with the capital to issue new loans. Selling loans is a common practice among lenders, so the bank you make your payments to may change during the life of the loan. The terms and conditions of your loan do not change when it is sold to another holder. Sallie Mae is the nation's largest secondary market and holds approximately one third of all educational loans.

SELECTIVE SERVICE: Selective Service is registration for the military draft. Male students who are US citizens or Permanent residents and who 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. If the student did not register and is past the age of doing so (18-25), and the school determines that the failure to register was knowing and willful, the student is ineligible for all federal student financial aid programs. The school's decision as to whether the failure to register was willful is not subject to appeal.

SERVICE ACADEMY: The five postsecondary institutions administered by branches of the military [U.S. Military Academy, U.S. Air Force Academy, U.S. Naval Academy, U.S. Coast Guard Academy, U.S. Merchant Marine Academy].

SIMPLIFIED NEEDS TEST: If the parents have an adjusted gross income of less than $50,000 and every family member was eligible to file an IRS Form 1040A or 1040EZ (or wasn't required to file a Federal income tax return), the Federal Methodology ignores assets when computing the EFC. If you filed a 1040 but weren't required to do so, you may be eligible for the simplified needs test.

STAFFORD LOANS: Stafford Loans are federal loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on need; unsubsidized loans aren't. The interest on the subsidized Stafford Loan is paid by the federal government while the student is in school and during the 6 month grace period. The Subsidized Stafford Loan was formerly known as the Guaranteed Student Loan (GSL). The Unsubsidized Stafford Loan may be used to pay the EFC.

STATEMENT OF EDUCATIONAL PURPOSE: The Statement of Educational Purpose is a legal document in which the student agrees to use the financial aid for educational expenses only. The student must sign this document before receiving federal need-based aid.

STUDENT AID REPORT: The Student Aid Report (SAR) summarizes the information included in the FAFSA and must be provided to your school's FAO. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC). You should receive a copy of your SAR four to six weeks after you file your FAFSA (15-20 days if you do it on the internet). Review your SAR and correct any errors on part 2 of the SAR. Keep a photocopy of your SAR for your records. To request a duplicate copy of your SAR, call 1-800-4-FED-AID or 1-800-433-3243.

STUDENT CONTRIBUTION (SC): A quantitative estimate of the student's ability to contribute to postsecondary expenses for a given year.

SUBSIDY: The money the federal government uses to help underwrite student aid programs; primarily refers to government payments to lenders of the in-school interest on Federal Stafford Loans.

SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANT: The Supplemental Educational Opportunity Grant (SEOG) is a federal grant program for undergraduate students with exceptional need. SEOG grants are awarded by the school's Financial Aid Office. To qualify, a student must also be a recipient of a Pell Grant.

TAXABLE INCOME: Income earned from wages, salaries, and tips, as well as interest income, dividend income, business or farm profits, and rental or property income.

TITLE IV PROGRAM: Those federal student aid programs authorized under Title IV of the Higher Education Act of 1965, as amended. Includes: the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant, Federal Work-Study, Federal Perkins Loan, Federal Stafford Loan, Federal PLUS Loan, Direct Loan, Direct PLUS Loan, and SSIG.

TITLE IV SCHOOL CODE: When you fill out the Free Application for Federal Student Aid (FAFSA) you need to supply the Title IV Code for each school to which you are applying. This code is a six-character identifier. Hostos Community College Title IV School Code is 008611.

TUITION PAYMENT PLAN: A strategy by which payment for present costs of postsecondary education is extended into a future period of time.

UNMET NEED: The difference between a student's total cost attendance at a specific institution and the student's total available resources.

UNTAXED INCOME: All income received that is not reported to the Internal Revenue Service or is reported but excluded from taxation. Such income would include but not be limited to any untaxed portion of Social Security benefits, Earned Income Credit, welfare payments, untaxed capital gains, interest on tax-free bonds, dividend exclusion, and military and other subsistence and quarters allowances.

US DEPARTMENT OF EDUCATION (ED or USED): The United States Department of Education administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work Study Program, and the Federal Perkins Loans, among other programs.

VERIFICATION: Verification is a review process in which the Office of Financial Aid determines the accuracy of the information provided on the student's financial aid application.

VETERANS EDUCATIONAL BENEFITS: Assistance programs for eligible veterans and/or their dependents for education or training.

VOCATIONAL REHABILITATION: Programs administered by state departments of vocational rehabilitation services to assist individuals who have a physical or mental disability which is a substantial handicap to employment.

W-2 FORM: Employers are required by the IRS to issue a W-2 form for each employee before February 28. The W-2 form lists the employee's wages and tax withheld.

WILLIAM D. FORD FEDERAL DIRECT LOAN (DIRECT LOAN) PROGRAM: The collective name for the Direct Subsidized, Direct Unsubsidized, Direct PLUS Loan, and Direct Consolidation Loan Programs. Loan funds for these programs are provided by the federal government to students and parents through postsecondary institutions that participate in the program. With the exception of certain repayment options, the terms and conditions of loans made under the Direct Loan Program are identical to those made under the FFEL program.

WORK-STUDY: (See Federal Work-Study).

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