Financial Aid Glossary

Federal Methodology (FM)

The formula the federal government uses to determine the amount of money a family is expected to contribute to their child's college education. A few colleges and universities use their own formula, or Institutional Methodology (IM). See also Expected Family Contribution.

FICO® Scores

Credit bureau risk scores produced from models created by the Fair Isaac Corporation are commonly known as FICO® scores. FICO® scores are used by lenders and others to assess the credit risk of prospective borrowers or existing customers, in order to help make credit and marketing decisions. These scores are based on information contained in credit bureau reports.

Financial Aid Officer

The college or university official responsible for reviewing the Student Aid Report (SAR) and for awarding financial aid to students based on demonstrated need.

Financial Aid Package

The total amount of financial aid (federal and nonfederal) a student is awarded, including loans, grants, scholarship, or work-study programs.

Financial Need

The difference between the Cost of Attendance (COA) at a college and the Expected Family Contribution (EFC). See also Need Analysis.

Fixed Interest

The interest rate that is in effect when the loan is made and that remains the same for the life of the loan.

Free Application for Federal Student Aid (FAFSA)

The form that must be completed by students and parents applying for all federal student financial assistance (SFA) programs as well as many state and college programs.

Full-time Student

A student who meets the school's requirements for full-time attendance based on the number of credits the student is currently carrying during the enrollment period.

Grant

Financial aid that does not have to be paid back and is awarded to students based on financial need. Grants are typically included in the financial aid package and outlined in the award letter.

Half-Time Enrollment

Enrollment by a student at an education institution for the number of course credit hours (usually at least six) defined by the institution as half-time. To be eligible to receive federal Direct or FFEL Program loans, or a CampusDoor.com student loan, you must be attending school at least half-time. Half-time enrollment is not required for the Federal Pell Grant, Supplemental Educational Opportunity Grant, Work-Study, or Perkins Loan programs.

Index

The tool used to identify the applicable interest on a loan. The index used for CampusDoor loans is the Prime Rate five (5) Business Days before the beginning of a calendar quarter, rounded up or down to the nearest one hundredth of one percent (0.01%). See also Margin.

Interest Change Date

The day when the variable interest rate of a loan may change. Frequency of this date depends on the terms of the loan.

Interest Rate

The premium charged to the borrower on the outstanding principal of the loan.

Interim Period

The time during which the borrower is not required to make monthly loan payments.

Lender

An institution providing funding for loans.

LIBOR

London Interbank Offered Rate of Interest. The LIBOR rate is the interest rate at which banks lend to one another. It is also used as a reference point for the majority of overnight and/or future interest rate levels.

Loan Amount

The gross dollar amount loaned to a borrower. See also Cumulative Loan Amount.

Loan Fee

A percentage of the loan amount that is payable by the borrower. The loan fee covers the cost of administering and insuring the loan.

Margin

The difference between the interest rate and the index.