Financial Aid Offer Glossary

The intent of this glossary is to provide greater clarity and understanding by students through consistency in the use and meaning of terms on award notifications across all colleges and universities.


Active/Affirmative Confirmation: A process under which a school obtains written confirmation of the types and amounts of Title IV aid a student wants for the period of enrollment before the institution credits the student’s account with those funds.


Adverse Credit History: A credit history is a summary of financial strength, including the history of paying bills and the ability to repay future loans. To qualify for a PLUS or private loan, a student cannot have an adverse credit history.


Budget or Cost of Attendance (COA): The estimated cost of attending this institution for one academic year. This amount includes the following:

  • Expected charges for one academic year of tuition and fees
    • Tuition – Charges assessed for classes
    • Fees – Charges assessed for other college services
  • Estimated room and board allowance – allowance for rent, utilities and food
  • Estimated books and supplies
  • Estimated transportation costs
  • Estimated personal and miscellaneous costs


Capitalization: The addition of unpaid interest to the principal balance of a loan. When the interest is not paid as it accrues during periods of in-school status, the grace period, deferment, or forbearance, your lender may capitalize the interest. This increases the outstanding principal amount due on the loan and may cause your monthly payment amount to increase. Interest is then charged on that higher principal balance, increasing the overall cost of the loan.


Direct or Institutional Costs: Expenses the student/family pays to the college.


Disbursement Date: The date student aid funds were credited to a student’s account at a school or paid to the student or borrower directly, as reported by the school.


Educational Loan: A form of financial aid that must be repaid with interest. Educational loans have varying interest rates and repayment terms. Students and/or parents are required to sign a promissory note when accepting an educational loan.

  • Federal Direct Student Loan: Loan funds provided to the student by the U.S. Department of Education, through the school. There are two types of Federal Direct Student Loans: subsidized and unsubsidized. Graduate students are only eligible for unsubsidized Direct Loans. These loans accrue interest while the student is in school.
  • Federal Graduate (Grad) PLUS Loan: A loan program offered by the U.S. Department of Education that allows graduate students who have no adverse credit history, or have a credit-worthy co-signer, to apply for up to the cost of attendance each year, less any other financial aid. PLUS loans will be repaid with interest to the federal government.
  • Private (Alternative) Loan: Loan funds from a commercial, state-affiliated or institutional lender used to pay for up to the annual cost of education, less any financial aid received. Private loans require the applicant to be creditworthy, or have a co-signer, and have varying interest rates, fees and repayment options. Repayment of interest (and often times the principal) generally begins immediately, with some lenders offering deferment options for in-school periods.


Financial Aid Offer: Previously described as an award letter or award notice. The offer from the school with the student’s calculated financial assistance from federal and private sources.


Indirect Costs: Expenses incurred as a result of attendance that the student/family may pay to a third party (merchant, landlord, etc.) other than the college.