Scholarship & Financial Aid Glossary

Plain-language definitions of the scholarship and financial-aid terms you'll run into. Amounts, deadlines, and eligibility rules change year to year and vary by country — always confirm specifics against official sources for the current year.

Award letter

The offer a college sends after you are admitted, listing the specific financial aid — grants, scholarships, work-study, and loans — it is offering you for the year. Compare award letters across schools to understand your real out-of-pocket cost.

Cost of attendance(COA)

A school’s estimated total yearly cost, including tuition, fees, housing, food, books, and other expenses. It sets the ceiling for how much financial aid you can receive.

CSS Profile

An additional financial-aid application that some colleges require to award their own institutional aid. It is separate from the FAFSA and asks for more detailed information.

Expected Family Contribution(EFC)

The older term for the number, calculated from FAFSA data, that schools used to estimate a family’s ability to pay. It has been replaced by the Student Aid Index (SAI).

FAFSA

The Free Application for Federal Student Aid — the U.S. form that opens the door to most need-based federal aid, and which many states and colleges also use. As the name says, it is free to file; never pay to submit it.

Gift aid

Money for education that you generally do not have to repay, such as grants and scholarships. It is the most valuable kind of aid because it lowers cost without creating debt.

Grant

Need-based gift aid — money you usually do not repay — awarded by the government or a college. The Pell Grant is the best-known federal example.

Merit aid

Scholarships or grants awarded for achievements such as academics, talent, athletics, or leadership, rather than for financial need. Some awards combine merit and need.

Need-based aid

Financial aid awarded according to your family’s financial circumstances, as determined by forms like the FAFSA. Awards shrink as ability to pay rises.

Need-blind admission

An admissions policy in which a college decides whether to admit you without considering your ability to pay. It concerns admission only — it does not guarantee that all of your financial need will be met.

Pell Grant

A federal grant for U.S. undergraduate students with significant financial need that generally does not have to be repaid. Eligibility is determined from FAFSA information.

Scholarship

Gift aid awarded by a school, organization, employer, or individual, often based on merit, field of study, background, or a specific application. Like grants, scholarships generally do not have to be repaid.

Student Aid Index(SAI)

A number calculated from your FAFSA information that colleges use to estimate how much financial aid you may receive. It replaced the Expected Family Contribution (EFC).

Student loan

Money borrowed to pay for education that must be repaid, usually with interest. Federal loans typically offer more flexible terms and protections than private loans.

Subsidized vs. unsubsidized loan

For federal student loans, "subsidized" means the government covers the interest during certain periods (such as while you are in school), whereas "unsubsidized" loans accrue interest the whole time. Subsidized loans cost less overall.

Verification

A process in which a school asks you to confirm the information on your FAFSA with documents. Being selected does not mean you did anything wrong; respond promptly so your aid is not delayed.

Work-study

A form of financial aid that lets eligible students earn money through a part-time job, often on campus, to help pay education costs. You earn it by working rather than receiving it up front.