Glossary of Financial Aid Terms
Adjusted Gross Income (AGI)
Appearing on your federal tax return, it is used to determine how much of your income
is taxable, AGI consists of "gross income" from taxable sources such as wages and
salaries, unemployment compensation, tips and gratuities, interest, and certain other
types of income, minus your maximum allowable adjustments including alimony paid,
penalties on early withdrawal of savings, payments to an IRA , payments to a Keogh
retirement plan, and self-employed health insurance payments and moving expenses.
Asset
An asset is an item of value, such as a family's home, business, and farm equity,
real estate, stocks, bonds, mutual funds, cash, certificates of deposit (CDs), bank
accounts, trust funds, and other property and investments.
Award Letter
An award letter is an official document issued by the financial aid office that lists
all of the financial aid awarded to the student. This letter provides the breakdown
of your financial aid package according to amount, source, and type of aid. The award
letter will include the terms and conditions for the financial aid and information
about the cost of attendance.
Cosigner
A cosigner on a loan assumes responsibility for the loan if the borrower should fail
to repay it.
Cost of Attendance
The cost of attendance is also known as the cost of education or budget, is the total
amount it should cost the student to go to school. This amount includes tuition and
fees, food and housing, and allowances for books and supplies, transportation, and
personal and incidental expenses. Loan fees, if applicable, may also be included in
the COA. Childcare and expenses for disabilities may also be included at the discretion
of the Financial Aid Administrator. MCC establishes different standard budget amounts
for students off-campus, living with parents, and in-state and out-of-state students.
Parent of Record
If a student's parents are divorced or separated, the custodial parent is the one
who proivided the most financial support over the 12 months prior to filing the FAFSA
even if the student does not live with that parent. Much of a student's need analysis
is based on financial information supplied by the custodial parent.
Default
Failure to make required debt payments on a timely basis or to comply with other conditions
of an obligation or agreement.
Deferment
Deferment occurs when a borrower is allowed to postpone repaying the loan. If you
have a subsidized loan, the federal government pays the interest charges during the
deferment period. If you have an unsubsidized loan, you are responsible for the interest
that accrues during the deferment period. You can still postpone paying the interest
charges by capitalizing the interest, which increases the size of the loan. Most federal
loan programs allow students to defer their loans while they are in school at least
half-time. You can't get a deferment if your loan is in default.
Disbursement
Disbursement is the release of financial aid funds to your school account. The payment
is made by semester.
SAI
The Student Aid Index (SAI) is determined by the FAFSA federal processor and is used
to determine eligibility for federal student aid.
Federal Processor
The organization that processes the information submitted on the Free Application
for Federal Student Aid (FAFSA) and uses it to compute eligibility for federal student
aid.
Federal Work-Study
The Federal Work-Study (FWS) program provides students with part-time employment during
the school year. The federal government pays a portion of the student's salary, making
it cheaper for departments and businesses to hire the student. For this reason, work-study
students often find it easier to get a part-time job. Eligibility for FWS is based
on need. Money earned from a FWS job is paid directly to the student in a bi-weekly
check and, therefore, does not apply to the students' billed charges. FWS wages are
not counted as income for the subsequent year's need analysis process.
Financial Aid
Money provided to the student and the family to help them pay for the student's education.
Major forms of financial aid include gift aid (grants and scholarships) and self-help
aid (loans and work).
Financial Aid Package
The financial aid package is the complete collection of grants, scholarships, loans,
and work-study employment from all sources (federal, state, institutional, and private)
offered to a student to enable them to attend MCC.
Financial Need
Financial Need determines a student's eligibility for need-based financial aid, according
to a federally-approved need-analysis formula. It is calculated by the difference
between the Cost of Attendance (COA) at MCC and your Student Aid Index (SAI).
Free Application for Federal Student Aid (FAFSA)
The Free Application for Federal Student Aid (FAFSA) is used to apply for federal
Pell Grants, Massachusetts state grants and all other need-based aid.
Grant
A grant is a type of financial aid based on financial need that the student does not
have to repay.
Income Tax Paid
Appearing on your federal tax return, it the amount of money determined through the
completion of your tax return that you must pay the IRS. It is different from the
tax withheld amount indicated on your W-2 form.
Loan
A loan is a type of financial aid, which must be repaid with interest after you leave
school or fall below half-time attendance (5 credits or less).
MassGrant
The MassGrant is need-based grant funding requiring full time attendance (12 credits
or more) awarded by the Commonwealth of Massachusetts for state residents. It is available
to families based on residency requirements, financial need, and by completing the
FAFSA by the required filing date of May 1st each year.
Monthly Payment Plans
Middlesex Community College offers you the opportunity to spread your tuition payments,
interest -free, over either 5 monthly payments, 4 monthly payments or 3 monthly payments.
See the college Student Accounts Office web site at for details.
Packaging
Packaging is the process of assembling a financial aid package.
Parent Contribution
The Parent Contribution (PC) is an 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 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 $7,395 based on the
student's financial need. The grant award is prorated based on your enrollment as
a full-time, 3/4 time 0r 1/2 time student.
Master Promissory Note (MPN)
The master promissory note is the binding legal document that must be signed by the
primary borrower or 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 borrower should
keep this document until the loan has been repaid. THe MPN can be completed and signed
electronically using your federal PIN at the federal web site called studentloans.gov.
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, they are unlikely to meet the school's graduation requirements.
Students must meet a minimum grade point average, generally a 2.00, as well as meet
a minimum credit completion rate of 66.6% (two thirds) of your attempted credits.
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 federal government
pays the interest on the Subsidized Stafford Loan while the student is in school on
at least a half-time basis. The Unsubsidized Stafford Loan may be used to pay the
SAI.
Student Aid Report
The Student Aid Report (SAR) summarizes the information included in the FAFSA and
must be provided to your school's Financial Aid Office. The SAR will also indicate
the amount of Pell Grant eligibility, if any, and the Student Aid Index (SAI). You
should receive a copy of your SAR four to six weeks after you file your FAFSA using
the paper FAFSA, four to seven days if you file the FAFSA electronically on the federal
web site called www.fafsa.gov. Review your SAR and correct any errors on part two of the SAR. Keep a photocopy
of the SAR for your records. To request a duplicate copy of your SAR, call 1-800-4FED-AID
(1-800-433-3243).
Verification
Verification is a review process in which the Financial Aid Office (FAO) determines
the accuracy of the information provided on the student's financial aid application.
The federal processor selects applications for verification before your FAFSA is sent
to the college. During the verification process the student and parent will be required
to submit documentation for the amounts listed (or not listed) on the financial aid
application. Such documentation may include federal tax return transcripts for you,
your spouse (if any) and your parents, proof of citizenship, proof of registration
with Selective Service, and W2, and 1099 forms, among other things. Financial aid
applications are randomly selected by the federal processor for verification
W2 Form
Employers are required by the IRS to issue a W2 form for each employee before January
31. The W2 form lists the employee's wages and tax withheld. It does not indicate
tax paid.