Glossary of Financial Aid Terms

The overwhelming majority of scholarships earned by UPrep students come directly from the college or universities. While not all schools offer scholarships, many schools have academic merit or talent (athletic, musical, art, debate, etc.) scholarships available. Check the schools’ websites for specific information on scholarships and financial aid.

Additional Financing Options

College-Sponsored Payment Plans

Many colleges offer individual payment plans allowing monthly payments of the annual fees. Check with individual schools to learn about their plans and policies.

Personal Loans

There are also a variety of loans available to assist in the financing of educational expenses. Individual financial aid offices are the best source of information about these programs. Many families who have equity in their homes find that a home equity loan offers the most favorable terms because of the tax advantages. Be assertive in exploring all possible financing options with your financial aid administrator.

529 College Savings Plan

The most popular way to save for college is through a 529 plan. (Information courtesy of www.get.wa.gov/faqs). A state 529 plan is a college savings plan named for the section of the federal tax code that authorizes them. You put in after-tax money. Your money grows tax-free and all withdrawals are tax-free as long as they are used for education. There are two types of 529 plans: the College Savings Plan and the Guaranteed Education Tuition Plan. With a College Savings Plan, you pick your investments and shoulder all of the investment risk. When it is time to pay for college, you have whatever money is left in your account. GET is a prepaid college tuition plan. With GET, families can prepay for a student’s college tuition today. The state of Washington guarantees that the value of the “units of tuition” you purchase will keep pace with resident undergraduate tuition at the most expensive public university in Washington (either the University of Washington or Washington State University). GET is a qualified tuition program under section 529 of the Internal Revenue Code. For more information, please visit www.get.wa.gov/faq.shtml.

Glossary of Financial Aid Terms

Expected Family Contribution (EFC): The amount of money the federal government expects a student and their family to pay toward college costs in a given year. FAFSA: Free Application for Federal Student Aid, used to apply for U.S. government grants and loans, federal work-study, many state grants, and institutional financial aid. Every financial aid applicant must complete this form. Federal Methodology: The need-analysis system used by the U.S. government to determine an applicant’s eligibility for federal financial aid. It is also used by some states and schools. Financial Aid: Money that is given, lent, or paid to you so you can pay for college. Gapping: The practice of meeting less than a student’s full aid eligibility. Institutional Methodology: The need-analysis system used by many colleges and universities to determine an applicant’s eligibility for institutional financial aid. Merit-Based Aid: Scholarships, grants, and other aid awarded based on academic strength, artistic ability, leadership, or other special talent. Need-Based Aid: Financial aid that is awarded based on demonstrated financial need.

Need-Blind: An admissions policy that does not use financial need as a factor in selecting applicants. Need-Conscious (or Need-Aware): An admissions policy that takes into account students’ financial need before making admissions decisions. Note: A school may be need-blind for one group of applicants and need-conscious for another group. Preferential Packaging: The practice of awarding more desirable (e.g., higher grants, lower loans) financial aid packages to highly favored students.

Profile (also known as the CSS Profile): The application required by many schools to apply for institutional aid. Complete this form only if the school to which you are applying requires it. SAR: The Student Aid Report, generated when the FAFSA is processed, includes all of the data entered on the FAFSA and indicates the amount of the EFC.

Work-Study: A federally subsidized or college program in which students hold part-time campus jobs in areas such as the library, academic departments, food services, administrative offices, etc., as part of their financial aid packages.