Award - As a noun, a specific amount of student financial aid. As a verb, approving such student’s financial aid.

Campus-Based Programs - Two Title IV federal student aid programs administered directly by the school:

  • Federal Work-Study (FWS) Program
  • Federal Supplemental Educational Opportunity Grant (FSEOG) Program

Central Processing System (CPS) - The FSA facility that processes applications for federal student aid (FAFSA), determining a student's eligibility for aid and conducting a series of quality control and eligibility checks on the application data. See also FAFSA, EFC, ISIR, SAR, edit checks, federal output document, and NSLDS.

Cohort Default Rate - A measure of the percentage of a school's student borrowers who have defaulted on their federal student loans.

Common Origination and Disbursement (COD) - Common Origination and Disbursement (COD) is a streamlined method for processing Federal Pell Grant and Federal Direct Loan data.

Conflicting Information - Any information obtained by the school that is different from information previously available to the school and that impacts a student's eligibility for aid. See also verification and verification items.

Cost of Attendance (COA) - For federal student aid purposes, a student's total cost of attending a postsecondary institution for a specified period of time, as established by law. The COA includes tuition and fees; room and board (or an allowance for housing and food); an allowance for books, supplies, transportation, loan fees, and dependent care (if applicable); disability related expenses, a one-time allowable cost of obtaining the first professional credential in a program requiring professional licensure or certification, and some miscellaneous expenses as well.

Data Matches - When a federal student aid application is processed, the Central Processing System (CPS) compares (or matches) the application data with records at other federal agencies (the Social Security Administration, the Department of Homeland Security, the Department of Veterans Affairs, and the Selective Service) and FSA's internal databases (such as the National Student Loan Data System (NSLDS).

Data Release Number (DRN) - The four-digit number on the SAR (and on the ISIR) that the student uses when changing certain SAR information by telephone. With student permission, schools can use the DRN to access the student's application information. The DRN is different from the PIN, which is the student's personal code and should not be shared with anyone.

Default - For federal student loans, a specific status wherein the borrower has failed to make payments and the loan is delinquent. (Specific terms vary by loan program.)  There can be serious legal consequences for student-loan defaulters. See also cohort default rate.

Deferment - For federal student loans, a period of time in which loan payments do not have to be made and interest does not accrue. Depending on the loan program, students may be granted deferments for many reasons, such as returning to school, economic hardship, or disability. 

Dependency Override - In unusual circumstances, a financial aid administrator can use professional judgment to classify a dependent student as independent for the purposes of determining student aid eligibility.

Dependent Student - For the purposes of applying for federal student aid, a student who does not meet any of the criteria for an independent student generally would be classified as a dependent student and would report parent information when applying for federal student aid.

Disbursement - The process by which Title IV program funds are paid to a student or parent borrower. In general, all funds are credited to a student's school account.  Excess funds above the amount owed to SEARK will be disbursed by check.

Edit Checks - When a federal student aid application is processed, the Central Processing System (CPS) completes a series of quality control checks on the application data, in an effort to identify incomplete or inconsistent data and to catch errors.

Eligible Noncitizen - A student aid applicant who is not a U.S. citizen or U.S. national, but is eligible to receive Title IV assistance because of certain criteria.

Eligible Program - A legally authorized course of study that leads to a degree or certificate and meets specified Title IV student aid eligibility criteria.

Eligible Student - A postsecondary student who meets the federal student aid eligibility requirements.

eMPN (Electronic Master Promissory Note) - A Web-based Master Promissory Note which a student can complete and sign electronically using a PIN. Also see Master Promissory Note.

Enrolled - For federal student aid purposes, a student is considered enrolled when he or she completes registration requirements and begins the attendance period (or, for a correspondence course, submits one lesson).

Entrance Counseling - Title IV institutions must offer loan counseling to first-time federal student loan borrowers before disbursing the loan. Entrance counseling covers the borrower's rights and responsibilities, the terms and conditions of the loan, and the consequences of default. See Exit Counseling.

Estimated Financial Assistance (EFA) - The amount of federal, state, and private financial assistance a school estimates a student will receive.

Exit Counseling - Title IV institutions must offer loan counseling to federal student loan borrowers who are leaving school or dropping below half-time enrollment. Exit counseling covers the borrower's rights and responsibilities, loan repayment, and the consequences of default. During the exit counseling, borrowers are also required to provide updated personal information, such as address, telephone number, and employer. See Entrance Counseling.

Expected Family Contribution (EFC) - A comparative measure, determined according to a need analysis formula specified by law, of how much the student and his or her family can be expected to contribute to the cost of the student's education for an award year. This figure is used to determine an applicant's eligibility for federal student aid. The EFC figure is shown on the SAR and ISIR received after completing the FAFSA.

Federal Consolidation Loan - A loan funded by a private lender that combines multiple Title IV student loans into a single loan with one monthly payment. Borrowers may also consolidate certain student loans provided by the U.S. Department of Health and Human Services.

Federal Direct Consolidation Loan - A loan funded by the federal government rather than a private lender that combines multiple Title IV student loans (including non-Direct loans) into a single loan with one monthly payment. Borrowers may also consolidate certain student loans provided by the U.S. Department of Health and Human Services.

Federal Direct Loan Program - A federal program in which the U.S. government (not a commercial lender) provides four types of education loans to student and parent borrowers directly through schools:

  • Federal Direct Stafford Loan (subsidized, for students)
  • Federal Direct Unsubsidized Stafford Loan (for students)
  • Federal Direct PLUS Loan (for parents) and
  • Federal Direct Consolidation Loan (for students and parents)

These loans are referred to collectively as Direct Loans. The same types of loans are available through the Federal Family Education Loan (FFEL) Program, but in that program, commercial lenders provide the funds to eligible students.

Federal Direct PLUS Loan - An education loan which parents can borrow on behalf of their dependent children. As part of the Federal Direct Loan Program, Direct PLUS Loans are made directly by the federal government (rather than a private lender) through participating schools.

Federal Direct Loan (Subsidized) - A federally subsidized, low-interest student loan, awarded on the basis of financial need. The federal government does not charge interest on subsidized loans while borrowers are enrolled at an eligible school at least half time, during the six-month grace period, or during authorized periods of deferment. As part of the Federal Direct Loan Program, these loans are made directly by the federal government (rather than by a private lender) through participating schools.

Federal Direct Unsubsidized Stafford Loan (Unsubsidized) - A low-interest loan for students who do not meet the financial-need criteria for a subsidized loan. The borrower is responsible for all interest on the loan. As part of the Direct Loan Program, these loans are made directly by the federal government (rather than by a private lender) through participating schools
Federal Need Analysis Methodology - The statutory formula used to determine the Expected Family Contribution (EFC) for all students applying for Title IV federal student aid. See also full data element formula and simplified formula.

Federal Output Document - A record of application data and need analysis generated by FSA's Central Processing System (CPS) as a result of processing an application for federal student aid. See Student Aid Report (SAR), SAR Information Acknowledgement, and Institutional Student Information Record (ISIR).

Federal Pell Grant Program - A federal grant program for undergraduate students with financial need.

Federal Stafford Loan (Subsidized) - A federally subsidized, low-interest student loan funded by a private lender and awarded on the basis of financial need. The federal government does not charge interest on subsidized loans while borrowers are enrolled at an eligible school at least half time, during the six-month grace period, or during authorized periods of deferment.

Federal Supplemental Educational Opportunity Grant (FSEOG) Program - A Campus-based Program that provides grant assistance to needy undergraduate students. Priority in awarding Federal Supplemental Educational Opportunity Grant (FSEOG) funds is given to students who have exceptional financial need and are Federal Pell Grant recipients. See also Campus-based Programs.

Federal Work-Study (FWS) Program - A Campus-based, federally funded employment program that provides paid jobs for students with financial need. The rate of pay is the current minimum wage, $7.25 per hour.

Forbearance - An approved time period when a borrower is willing, but financially unable, to make required payments on a federal student loan. Payments can be temporarily postponed, payment due dates can be extended, or smaller payments than were previously scheduled can be accepted.

Free Application for Federal Student Aid (FAFSA) - The FSA form that must be completed in order to receive federal student aid. The FAFSA gathers data needed to calculate the Expected Family Contribution (EFC), to determine federal student aid eligibility. See also Renewal FAFSA and need analysis.

Gift Aid - Financial aid that does not have to be repaid or earned through work. Generally, gift aid is in the form of a grant or scholarship.

Higher Education Act (HEA) - Federal legislation passed in 1965, and its subsequent amendments and reauthorizations (most recently in 1998), authorizing the majority of the federal student financial aid programs and mandating that the programs be regulated and administered by the U.S. Secretary of Education. Approximately every five years, Congress reauthorizes the act or extends the legislation for up to one additional year. The statute's most current version, as amended, is always the official version of the law.

Independent Student - To be classified as an independent student for Title IV aid, a student must meet one or more of the following criteria:

  • be at least 24 years old by December 31 of the applicable award year for which aid is sought;
  • be an orphan or a ward of the court through the age of 18;
  • be a veteran of the U.S. Armed Forces;
  • have legal dependents other than a spouse (for example, dependent children or an elderly dependent parent);
  • be on active military duty for purposes other than training;
  • be a graduate or professional student; or
  • be married.

Institutional Student Information Record (ISIR) - An electronic output document transmitted to the schools the student specified on the application and to state agencies. Sent by FSA's Central Processing System (CPS), the ISIR summarizes information submitted on a student's Free Application for Federal Student Aid (FAFSA) and provides the student's Expected Family Contribution (EFC). The ISIR also includes full applicant data, information on eligibility matches, NSLDS financial aid history, comments, assumptions, and reject reasons. See also Student Aid Report (SAR).

Late Disbursement - A disbursement may be made to an ineligible student who has withdrawn or otherwise ceased attendance; if the student became ineligible only because of a change in enrollment status and he or she is otherwise eligible for the funds.  In addition, other conditions must be met depending on the FSA program from which the late disbursement is to be made.

Master Promissory Note (MPN) - The legal document that requires a federal student loan borrower to repay the funds borrowed. It may be used for several loans.

National Student Loan Data System (NSLDS) - The ED database that collects and maintains student loan and grant data on Title IV federal student aid recipients.

Need - The difference between a student's cost of attendance (COA) and what the student's family is able to pay—the Expected Family Contribution (EFC). [The cost of attendance minus the Expected Family Contribution equals the student's financial need.] Also see need analysis.

Need Analysis - The statutorily defined method of analyzing household and financial information to determine a postsecondary student's need for federal student aid. See also cost of attendance (COA), Expected Family Contribution (EFC), Federal Need Analysis Methodology, and Free Application for Federal Student Aid (FAFSA).

Overaward - An award of federal student aid that in combination with the resources available to that student that exceeds the student's financial need.

Overpayment - Any federal student aid paid in excess of the amount the student is eligible to receive. Except for Federal Work-Study funds (which are earned) the student must repay an overpayment unless adjustments can be made to eliminate the overpayment within the same award year.

Packaging - The process of assembling one or more financial aid awards (loans, grants, scholarships, and employment) for a student; also referred to as award packaging.

Personal Identification Number (PIN) - A unique identifier that lets students access or change their personal information in various ED systems. Similar to a bank PIN, it should be kept secure and private.  Students and parents can obtain a PIN at ED's PIN Registration Web site, www.pin.ed.gov.

Primary EFC - The Expected Family Contribution (EFC) that appears on the first page of the SAR or ISIR.

Priority Deadline - The latest date a school recommends that students apply for financial aid for the award year to be able to receive maximum consideration for institutional funds. Many schools award the bulk of their institutional financial aid to students who apply by this deadline.

Professional Judgment - A provision in the law allowing financial aid administrators to make individual adjustments to override a student's dependency status (from dependent to independent), to adjust the components of a student's cost of attendance (COA), and to adjust the data elements used to calculate the student's Expected Family Contribution (EFC). Professional judgment can only be used on a case-by-case basis and the reason must be documented in the student's file. Professional judgment cannot be used to circumvent the law or Title IV regulations.

Regular Student - A person enrolled or accepted for enrollment in an eligible program at an eligible postsecondary institution for the purpose of obtaining a degree or certificate offered by that institution.

Renewal FAFSA - A FAFSA application that is pre-populated with the prior-year data so that students who applied in the previous year do not have to complete an entirely new application.

Repayment - A period of time when a federal student loan borrower is required to make payments on the loan according to a schedule agreed to by the lender.

Return of Title IV funds - When a student withdraws from school without completing a payment period or period of enrollment, the school must determine the amount of Title IV funds "earned" for the portion of the payment period or period of enrollment the student attended. Unearned federal student aid must be returned. Earned aid that the student has not yet received must be offered to the student by the school as a post-withdrawal disbursement.

Satisfactory Academic Progress (SAP) - A satisfactory rate of student course-completion determined using qualitative and quantitative measures. By law, schools whose students receive Title IV funds must establish policies for monitoring satisfactory academic progress (SAP). Schools must check at least once each academic year and document for each payment period that each student receiving Title IV aid is progressing satisfactorily in their academic program.

Satisfactory Status – Status attained when a student meets the minimum SAP standards and for those on Warning Status from a prior semester resolves what has placed him/her on Warning Status.

Self-Help Aid - Financial aid that must be repaid (loans) or is earned through employment. See  Gift Aid.

Student Aid Report (SAR) - A federal "output" document sent directly to a student from FSA's Central Processing System (CPS) that summarizes information submitted on the student's Free Application for Federal Student Aid (FAFSA) and provides the student's Expected Family Contribution (EFC). If the student provided an e-mail address on the FAFSA, FSA will send an e-mail instructing the student how to access the SAR electronically. A student who applies using a paper FAFSA but does not give an e-mail address will receive a paper SAR. A student who applies electronically but does not give an e-mail address will receive a paper SAR Information Acknowledgement. See also federal output document, Institutional Student Information Record (ISIR).

Student Aid Report (SAR) Information Acknowledgement - A federal "output" document, similar to the Student Aid Report (SAR) that is sent to a student who applies electronically but provides no email address. The SAR information Acknowledgement cannot be used as a correction document.

Title IV Federal Student Aid - Financial aid programs for postsecondary students, authorized under Title IV of the Higher Education Act of 1965, as amended (HEA). The programs are administered by the U.S. Department of Education. Title IV federal student aid programs are:

  • Federal Pell Grant Program
  • Federal Supplemental Educational Opportunity Grant (FSEOG) Program
  • Federal Work-Study (FWS) Program
  • William D. Ford Federal Direct Loan Program


Tolerance Levels (Verification) - The maximum error level (in dollars) at or below which a federal student aid applicant's income or asset information does not have to be corrected or reprocessed. See also verification.

Transaction Number - A two-digit number that identifies how many times an applicant's data is processed by ED's Central Processing System (CPS). The CPS generates a new transaction number (and a new output document) each time an applicant's data is processed. For example, the initial processed FAFSA creates Transaction 01, the first processed correction creates Transaction 02, and a subsequent processed correction creates Transaction 03.  The transaction number is located in the lower right-hand corner of the applicant's SAR, after the applicant's Social Security number and the first two letters of the last name.

Transfer Student Monitoring - A function of the National Student Loan Data System (NSLDS) that monitors student transfers from one school to another. Following a student transfer, the new school sends identifying information about the student to NSLDS, and will then receive data updates that will allow the school to disburse and/or deliver aid to the student. (Schools were previously required to obtain financial aid history information from the previously attended schools, through a paper Financial Aid Transcript. This is no longer required.)
Verification - The process a school follows to check the accuracy of information reported by a student on the Free Application for Federal Student Aid (FAFSA). If an application is selected for verification by the Central Processing System (CPS), it will be indicated on the resulting Student Aid Report (SAR): an asterisk will appear to the right of the applicant's Expected Family Contribution (EFC). Schools may also choose to verify other applications. Whether the application is selected by the CPS or chosen for verification by the school, the school verifies the application information by comparing it to documentation provided by the student (and parents, if required).

Verification Items - Specific federal student aid application information that must be checked for accuracy during the verification process. See also conflicting information and verification.

Warning Status – Status when a student fails to meet the minimum SAP standards for the prior term of enrollment.  A student on Warning Status is still eligible for financial aid.