Financial Aid Terms to Know

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Academic Year

The time between the beginning of the fall semester, usually in late August/early September, through the end of the spring semester, usually in late April/early May. The Academic Year at Franklin & Marshall consists of two (2) semesters of approximately 15 weeks each and several semester breaks. It does not include summer course study.

Award Year

July 1 of one year through June 30 of the following year. The same as a fiscal year.

Certification (as in certifying a loan)

The responsibility of Franklin & Marshall to verify a student's and/or parent's eligibility for their requested amount of a Federal Direct Student Loan, Federal Direct Parent PLUS Loan, or a Private (Alternative) Loan. Certification is performed by the Student Loan Coordinator in the Office of Financial Aid.

College Work-Option

A need-based, campus work-study program. This program, unlike Federal Work-Study, is funded by the College.

Cost of Attendance (COA)

Also known as Cost of Education, this is the total cost of educating an F&M student for an entire academic year. The COA includes actual Direct Costs and estimated Indirect Costs. The COA includes Direct Costs of tuition, room, meal plan, and fees as well as Indirect Costs of transportation, books, supplies, loan fees, and miscellaneous expenses. The COA is used as a best benchmark of expense for use in determining true financial need.

CSS Profile

The financial aid application serviced by the College Board that Franklin & Marshall uses to collect additional financial indicators not included on the Free Application for Federal Student Aid (FAFSA). The CSS Profile employs use of the Institutional Methodology.


Spouse, children, and other household members for whom the parent or independent aid applicant provides more than half support.

Dependent Student

Undergraduate students who are under age 24 as of December 31 of the award year are considered to be dependent for federal student aid purposes unless they are married, have dependents other than a spouse, are an orphan, are a veteran or active duty member of the US Armed Forces or satisfy other very limited criteria. If a student who is under age 24 doesn’t satisfy one of these criteria, the odds of being considered independent are very slim. In short, it doesn’t matter how financially independent a student is; if they don’t meet any of the above requirements, they are not considered independent for financial aid purposes. Dependency status for federal student aid purposes is not the same as dependency status for federal income tax purposes. Students who are dependent for federal student aid purposes must supply parent information on the Free Application for Federal Student Aid (FAFSA).

Direct Costs

Expenses incurred by a student at the College for which there is an actual cost billed by the College's Student Accounts Office. Direct costs include tuition, room, meal plan, and fees. Both Direct and Indirect Costs (see below) comprise the Cost of Attendance. Financial Aid goes toward the sum total of Direct and Indirect Costs, not any one specific Cost.


When funds from a lender are released to the College's Student Accounts Office to pay down a student's college bill; as in "The F&M Student Accounts Office received your Federal Direct Loan disbursement today from 'Fill-In-Blank Lender Agency,' thereby paying down your overall College bill."

Early Decision

An admission program with earlier deadlines for admission and financial aid applications as well as earlier notification of the admission committee's decision and financial aid package, if applicable. Early Decision (ED) is a binding commitment of interest in the College. If a student is admitted ED, they are expected to enroll shortly following their admission notification, well before the regular May 1 deadline.

Early Financial Aid Estimate

A special service program offered only to students intent on applying Early Decision who would like to have an early estimate of out-of-pocket expenses. This is an estimate only, not a guaranteed financial aid package. It also doesn’t guarantee or imply admission. For more information, please see Early Financial Aid Estimate.


The amount of financial need for which you qualify, as determined by the need-based aid formula.

Enrollment Level

Level of the degree-granting program in which a student is enrolled. Basic levels of enrollment include: undergraduate (students seeking an associate's degree, a certificate, or a baccalaureate degree); post-baccalaureate (such as teacher certification); graduate (students working on a master's degree or professional degree); and post-graduate (such as students enrolled in a doctoral program). The amounts and types of financial aid a student is eligible for is determined, in part, by their enrollment level.

Enrollment Status

Academic workload (or course load), as defined by the institution, that a student is carrying for a defined academic period. This normally relates to the number of credit hours taken by a student during a given academic period. For most traditional undergraduate term-based schools:
  • Full-time status = at least 4 credit hours
  • Half-time status = at least 2 credit hours

Entrance Counseling

The goal of entrance counseling is to help you understand what it means to take out a Federal Direct Student Loan. It is a mandatory information session that takes place before you receive your first Federal Direct Student Loan that explains your responsibilities and rights as a student borrower.

Exit Counseling

A mandatory information session that takes place before you graduate or drop below half-time enrollment that explains your Federal Direct Student Loan  repayment responsibilities and when repayment begins.

Expected Family Contribution (EFC)

A measure of how much the student and his or her family can be expected to contribute to the cost of the student's education for the year. The EFC is calculated according to a formula specified in the law and is based upon the information provided by the student and his or her family during the CSS Profile and FASFA filing process.

FAFSA - Free Application for Federal Student Aid

A form that can be prepared annually by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for federal student financial aid such as grants, loans, and work-study. Completing the application correctly enables the Federal Methodology to calculate for the student and family an Expected Family Contribution (EFC) toward the education of the student. There is no fee charged to the student for completing, submitting, or processing the application.

Family Financial Responsibility

Franklin & Marshall College awards our institutional, need-based scholarships and grants based upon a more comprehensive calculation of family financial circumstances using information provided on the CSS Profile. This can result in a higher (or lower) financial responsibility for the student (and his/her family) than the FAFSA might indicate with its Expected Family Contribution (EFC) estimate.

Federal Direct Student Loan

Loan funds provided to the student by the U.S. Department of Education, through the school. Repayment of principal begins six months after the borrower ceases to be a student on at least a half-time basis. The Free Application for Federal Student Aid (FAFSA) is the annual application. There are two types of Federal Direct Student Loans: subsidized and unsubsidized. Students with financial need can qualify for a subsidized loan, and the government pays the interest on the loan while the student remains enrolled at least half time. Students who don't demonstrate financial need qualify for an unsubsidized loan and interest accrues while the student is in school. For information on loan limits per year and over the course of enrollment, please visit:

Federal Eligibility

The amount of financial need for which a student has been determined to have according to the federal government formula. Federal eligibility is tested via information gathered from the Free Application for Federal Student Aid (FAFSA).

Federal Methodology

The formula used by the federal government to determine your Expected Family Contribution (EFC) for federal student aid such as a Federal Pell Grant and Federal Direct Student Loans.

Federal Parent Loan (PLUS)

A federal loan program that allows parents who have no adverse credit history to apply for up to the Cost of Attendance (COA) each year, less any financial aid. PLUS loans must be repaid with interest.

Federal Pell Grant

A grant provided by the federal government to qualified undergraduate students who demonstrate exceptional financial need and have an Expected Family Contribution below a threshold designated annually by the U.S. Department of Education, based on the amount of program funds appropriated by Congress. For more information, visit: Named for Senator Claiborne Pell.

Federal SEOG - Federal Supplemental Educational Opportunity Grant

A grant provided by the federal government to qualified undergraduate students who demonstrate exceptional financial need. Priority is given to Federal Pell Grant recipients and funds must be awarded by the school in lowest EFC order.

Federal Work-Study

A program that provides part-time employment to students attending institutions of higher education who need the earnings to help meet their costs of postsecondary education and encourages students receiving FWS assistance to participate in community service activities.

Financial Aid

Money provided to enrolled Franklin & Marshall students, who are in good standing, that is put toward paying the total Cost of Attendance (COA). Financial Aid can comprise of various amounts and combinations of loans, grants, work, and scholarships from sources such as the U.S. federal government, private outside agencies, and Franklin & Marshall College itself.

Financial Aid Letter

Students who are admitted to the College and who qualify for need-based financial aid will receive a Financial Aid Letter from the Office of Financial Aid included with their notification from the Office of Admission. The letter outlines each type and amount of offered financial assistance.


The FSA ID is a username and password combination that serves as a student’s or parent’s identifier to allow access to personal information in various U.S. Department of Education systems and acts as a digital signature on some online forms. Your FSA ID confirms your identity when you access your financial aid information and electronically sign Federal Student Aid documents.  If you do not have an FSA ID, you can create one.

Full-Time Status

At Franklin & Marshall, enrollment in three (3) or more courses per semester is concidered full time. Students who reduce their enrollment to less than three (3) courses in a semester are no longer eligible to receive institutional need-based funds.

Gift Aid

Funds awarded to the student that do not have to be repaid, unless the student fails to meet certain terms, such as a service requirement, specified as a condition of the grant. Gift aid includes awards with titles such as grants, scholarships, remissions, waivers, etc. Gift aid can be awarded based upon many factors, including (but not limited to) financial need, academic excellence, athletic, musical, and theatrical talent, affiliation with various groups, or career aspirations.

Grace Period

For the federal direct subsidized loan, a period of time after you graduate, leave school, or drop below half-time enrollment when you are not required to make payments. You are responsible for paying the interest that accrues on unsubsidized loans during the grace period. If the interest is unpaid, it will be added to the principal balance of the loan (capitalized) when the repayment period begins.


Gift aid awarded to the student that does not need to be repaid. Grants are typically based on financial need.

Half-Time Status

At Franklin & Marshall, enrollment in two (2) courses per semester is considered half-time.  Half-time status can affect need eligibility for federal aid programs such as the Pell Grant. Students must be at least half-time in order to receive a Federal Direct Loan, or PLUS Loan.

Students who reduce their enrollment to less than three (3) courses in a semester are no longer eligible to receive institutional need-based funds.

Home Equity

The value of a home minus what is owed on the home.

Independent Student

A student who has attained age 24 by January 1 of the year prior to the aid year*, or who has not attained age 24 but:
  • is an orphan
  • is a ward of the court
  • is a veteran
  • is married
  • is a graduate or professional student
  • has legal dependents (other than a spouse) to whom more than half of their support is provided by the student
  • has other unusual circumstances in the Professional Judgment of the aid administrator

Indirect Costs

Expenses incurred by a student at the College for which there is NO actual cost billed by the College's Business Office because the costs vary from student to student. Indirect costs include books, supplies, transportation expenses, loan fees, and miscellaneous expenses. Both Indirect and Direct costs (see above) comprise the Cost of Attendance. Financial Aid goes toward the sum total of Indirect and Direct Costs.

Institutional Methodology

A formula used by Franklin & Marshall to determine a student's family contribution. The CSS Profile financial aid application employs Institutional Methodology and determines the amount of expected family contribution, if any, above the federal EFC. Unlike Federal Methodology, Institutional Methodology includes Home Equity as an asset in its calculation and tends to be a more conservative measure of financial need.

Interest Rate

The amount charged by a lender to a borrower for the use of money over a period of years. Interest rate is expressed as an annual percentage of the principal amount borrowed. It is calculated by dividing the amount of interest by the amount of principal. Interest rates often change as a result of inflation and Federal Reserve policies. For example, if a lender (such as a bank) charges a customer $90 in a year on a loan of $1000, then the interest rate would be 90/1000 *100% = 9%.

IRA - Individual Retirement Account

Retirement withholdings are NOT INCLUDED in the aid calculations unless they are being tapped for income.

LEAP - Leveraging Educational Assistance Partnership

The LEAP Program provides grants to states to assist them in providing need-based grants and community service work-study assistance to eligible postsecondary students. States must administer the program under a single state agency and meet maintenance-of-effort criteria.

Less-Than-Half-Time Status

At Franklin & Marshall, enrollment in one (1) course is considered less-than half-time. Less-than-half-time status will affect need eligibility for institutional and federal aid programs.


An advance of funds evidenced by a promissory note requiring the recipient of the loan to repay the specified amount(s) under prescribed conditions. Loans may be borrowed from the federal government, private banks, lending agencies, or individuals, usually with an interest rate which ensures that the money repaid in the future equals or exceeds the amount initially borrowed.

Master Promissory Note (MPN)

Also known as a Promissory Note, is required for Federal Direct Student Loan, and the Federal Direct Parent PLUS Loan. This is a legal document that a borrower (student or parent) signs when obtaining the loan. The MPN lists the conditions under which the loan is made and the terms under which the borrower agrees to pay back the loan.


Financial need is determined by a formula: Student's Cost of Attendance (budget) minus the Expected Family Contribution (EFC) minus non-need-based aid (i.e. Merit Scholarships) equals need-based financial aid.

Need Analysis

A system used to estimate a student applicant's need for financial assistance to help meet his/her educational expenses.

Need-Based Employment

Students must have financial need as determined by the FAFSA and CSS Profile in order to qualify for Federal Work-Study or College-Work Option. Need-based employment money is earned and NOT DEDUCTED from your bill.

Net Cost

Amount of direct and indirect costs remaining after all gift aid (scholarship and grant) is subtracted.

Noncustodial Parent

Effective with the 2024-2025 academic year, for divorced or separated parents, income and assets are reported on the FAFSA and CSS Profile for the parent who provides the most financial support over the 12 months prior to filing the FAFSA and CSS Profile even if the student does not live with that parent or lives with the other parent.
If neither parent provided support in 12-month period, parent of record is parent who provided greater support during most recent year student received financial support from aparent; andthen if equal support is given; parent of record is one with the higher
income or assets.

NSLDS - National Student Loan Data System

NSLDS is the U.S. Department of Education's central database for FEDERAL student aid. It receives data from schools, agencies that guaranty loans, the Direct Loan program, the Pell Grant program, and other U.S. Department of Education programs. NSLDS provides a centralized, integrated view of Title IV loans and Pell grants that are tracked through their entire cycle. The NSLDS Student Access web site is available 24 hours a day, 7 days a week. (

Off-Campus Student

A student who is not living in College residential housing. Off-campus housing is considered a non-billed indirect cost and is accounted for in the total Cost of Education for a student in the same way as would be for an On-Campus Student.

Off-Campus Study (also Study Abroad)

Academic program opportunities where students may study at universities outside of the United States or other colleges and universities within the United States. Financial aid for study abroad is applicable and congruent with financial aid at Franklin & Marshall.

On-Campus Student

A student who is living in a College residence. On-Campus students are billed directly by the Business Office for their resident accommodations.

Out-of-Pocket Cost

Difference between the Cost of Attendance (COA) and all gift aid. Out-of-pocket cost can be covered through a variety of sources, including: savings, income and educational loans.


A loan fee charged by the lending agency that is passed on to the borrower. It is calculated on the amount borrowed for a Federal Direct Loan.


A student's mother, father, or an adoptive parent is considered to be the student's mother or father.

Parent Contribution

A quantitative estimate, according to the need analysis methodologies, of the parents' ability to contribute to postsecondary educational expenses. Note: This assessment measures ability, not willingness, to contribute.

Payment Period

An institutionally defined length of time for which financial aid funds will be paid to a student.


To be given approval by a lender to borrow a student loan for up to a certain amount. Pre-approval is a helpful tool when considering educational costs throughout the college selection process.


The loan amount borrowed.

Priority Period

The period between the beginning of the fall semester and mid-September when priority for seeking campus employment is given to students with demonstrated financial need who have been awarded need-based employment.

Private (Alternative) Loan

A loan 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 usually 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 principal) generally begins immediately, with some lenders offering deferment options for in-school periods. Elm Select will provide you with a list of lenders most often used by F&M families. Once you are on their website, select "Undergraduate" or "Parent Loans" in the drop-down box for the loan type.

Professional Judgment

A Financial Aid Administrator's authority to adjust data elements used in Federal Methodology to determine need on a case-by-case basis with sound documentation.


The legislative process generally carried out every 4 to 6 years in the case of the Higher Education Act of 1965 which instituted the use of Title IV aid programs. During Reauthorization Congress reviews and either renews, terminates, or amends existing programs.


The period of time when a student borrower repays a loan. Repayment often has a limited length of time of no more than 10 years.


Gift aid awarded to the student that does not need to be repaid. Scholarship awards are typically based on merit or a combination of merit and need, such as academic excellence, talent, affiliation with various groups, or career aspirations.

Self-Help Aid

Financial aid in the form of loans or student employment. Loans are used to help pay the remaining net costs after gift aid is deducted. Student employment earnings (including Work-Study awards) are generally not deducted from billed costs but can be used to help cover indirect costs and are paid in the form of wages to the student.

Split Loan

If a student achieves their next yearly enrollment status between fall and spring semesters, they may receive a Split Loan. The fall semester loan limit amount will be representative of their former status (e.g., sophomore) and the spring semester loan limit will be representative of their new status (e.g., junior).

Student Loan

Funds awarded to the student that must eventually be paid back to the lender by the student.

Taxable Income

Income earned from wages, salaries, tips, interest income, dividend income, business or farm profits, and rental property income.

Title IV Funds

Federal student financial aid programs for student attending postsecondary institutions. These programs are authorized under Title IV of the Higher Education Act of 1965, as amended, and administered by the Department of Education. Title IV programs include the Pell Grant, the Supplemental Educational Opportunity Grants (SEOG), Federal Work Study, the Federal Direct Loan, the Parent Loan for Undergraduate Students (PLUS), and LEAP.

Trustee Grant

Grant aid offered to needy students by the College to fill the gap between federal need-based aid awards and overall need eligibility.

Undergraduate Student

A student who has not completed the requirements of a baccalaureate or first professional degree. Franklin & Marshall College provides an education strictly for the undergraduate student.

Unmet Need

The difference between a specific student's total available resources after financial aid has been awarded and the Cost of Education.

Variable Rate

This refers to a loan whose interest rate varies over the repayment term of the loan. For example: The interest rate for Federal Direct and PLUS Loans varies annually over the life of the loan.


Process to confirm the accuracy of data provided by the applicant on the FAFSA. In order to complete the verification process, students are required to provide certain documents to the school for review such as income tax returns and other supplemental worksheets.

Withdrawal or Leave of Absence (LOA)

Students who withdraw or stop attending all of their courses prior to completing 60% of the term may only keep the federal financial aid they have earned up to the time of withdrawal. According to federal regulations, federal funds that were disbursed in excess of the earned amounts must be returned in the following order:
  • Federal Direct Unsubsidized Loan
  • Federal Direct Subsidized Loan
  • Federal Direct Parent PLUS Loan
  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grant (SEOG)