Definitions

Cost of Attendance: See “Student Budget”

Dependent Student: The traditional college student entering college shortly after completing high school. For federal financial aid purposes, students are considered dependent if they do not have their Bachelor’s degree, are under 24 years old, are unmarried, childless, and not a military veteran or former foster child. Financial aid policies generally expect one or more parents of a dependent student to contribute to the student’s college expenses.

EFC or Expected Family Contribution: An amount the family and student are estimated to be able to contribute toward college expenses, based on either a federal formula (known as Federal Methodology or FM) or an alternative formula (known as Institutional Methodology or IM). The amount depends on many factors and can be adjusted by financial aid administrators based on a student’s special circumstances. But as a snapshot sense of the amounts generated by the federal formula, here are some example EFCs for some dependent students (see XAP http://www.xap.com/GetMoney/pay_for_college/efc_examples.html for the specific situations on which these are based):

Family income $32,000 EFC: $818

To determine an estimated EFC based on a specific family scenario, see the calculators available on colleges’ sites and at:

Federal Methodology or FM: See EFC.

Financial Need: The amount of the Student Budget not covered by the EFC.

Institutional Methodology or IM: See EFC.

Parent Contribution: That portion of the EFC that comes from the parent’s income and/or assets.

Pell-eligible: Students who qualify for at least a minimum Federal Pell Grant. The grants generally go to students from families with incomes under $40,000, though some students with incomes as high as $60,000 (depending on the student’s EFC) may be eligible.

Poverty Level: This is a federal measure, updated annually, of the amount of income that a family needs for basic survival. For a family of four in the contiguous 48 states, the amount is $20,650 in 2007.

150% of poverty for a family of four: $30,975

185% of poverty for a family of four: $38,203

200% of poverty for a family of four: $41,300

School Lunch Program: Some programs use eligibility for the federal free and reduced-price school lunch program as an indicator of a family’s low-income status. Families with incomes below 185% of the poverty line are eligible for school lunch subsidies. See http://www.fns.usda.gov/cnd/governance/notices/iegs/iegs.htm

Self-help: The amount of a financial aid award that requires the student to work or borrow. This may include an expectation of earnings during the summer, as well as loans and/or work-study during the school year.

Student Budget: Also known as the “cost of attendance,” this is the total, as estimated by the college, of: tuition and required fees; room and board (rent and food); books and supplies; transportation; and miscellaneous personal expenses (including computer expenses). Institutions do not necessarily use consistent methods of estimating these amounts, but the U.S. Department of Education does issue guidelines for what campuses may include.

Student Contribution: That portion of the EFC that comes from the student’s income and/or assets. Some colleges have a standard or minimum contribution that they expect from the student’s summer earnings.