When you apply to college, you’re going to run across some unfamiliar financial aid terms. FAFSA, Pell grants, subsidized loans and unsubsidized loans, it’s enough to make your head spin!
To help you make sense of it all, we’ve put together this list with some of the most common financial aid terms you’ll run across.
FAFSA (Free Application for Federal Student Aid)
The U.S. Department of Education form that you and your family complete to determine if you’re eligible for federal student aid, including grants, loans, scholarships and work-study programs. University of the Pacific and the state of California also use FAFSA information to award additional aid for eligible students.
Need-based aid
Financial aid offered based on a demonstrated financial need, determined by FAFSA information.
Merit-based aid
Financial aid offered based on a student’s achievements, such as academic performance, leadership, artistic talent or athletics.
Grants
Money for college that you don’t need to repay. Grants are usually awarded based on financial need demonstrated in your application.
Pell Grant
A federal grant offered to undergraduate students with exceptional financial need. It does not have to be repaid.
Scholarships
Similar to grants, scholarships also do not need to be repaid. They are often offered based on merit (such as academic or athletic achievement) but can also be given based on need or other criteria.
You can find scholarships through your college applications, but you may also be eligible for scholarships offered by outside sources.
Federal Work-Study
A program that funds part-time job opportunities for students with financial need, helping them work to pay for educational expenses.
Subsidized loan
A federal student loan where the government pays the interest when you are enrolled in school (at a minimum of half-time) and for the first six months after you leave school. These are offered based on demonstrated financial need.
Unsubsidized loan
A federal student loan where you’re responsible for all interest, which starts accumulating while you’re in school. Unlike subsidized loans, you do not need to demonstrate financial need.
Parent PLUS loan
A federal loan that your parent or guardian can borrow to help you pay for college. To qualify for this loan, your parent or guardian must meet eligibility requirements and not have an adverse credit history
Private loans
Loans from banks, credit unions or other private lenders that you can use to pay for college. These usually have higher interest rates than federal loans and may be less flexible with repayment than federal loans.
CSS Profile
An online application that some universities use to offer institutional aid (financial aid offered directly by a college). Pacific does not accept the CSS Profile
Cost of Attendance (COA)
The total estimated cost to attend a university for one school year. This amount includes tuition, fees, food and housing, books, supplies, transportation and some personal expenses.
Net Price
The cost you pay to attend college after subtracting the amount covered by grants, scholarships and other aid.
Expected Family Contribution (EFC)
This has been supplanted by the Student Aid Index starting with the 2024-2025 FAFSA.
The EFC is an indicator of the financial strength of a student’s household and a tool to determine need-based aid eligibility.
The amount is calculating using provided FAFSA information about family income, assets and household details
Student Aid Index (SAI)
The updated version of the EFC, starting with the 2024-25 FAFSA. The SAI is used to determine how much financial support you may need.
Offer letter or award letter
The document a college sends you to explain what financial support you’re eligible to receive. It may list grants, scholarships, work-study and loans based on your eligibility.
Verification
When a college asks you to provide documentation to confirm information provided on your FAFSA. Not all students are selected for verification. Verifying your information is a routine process and doesn’t necessarily mean that you’ve made a mistake.
Satisfactory Academic Progress (SAP)
The requirement that students maintain a certain GPA and complete enough credits each year to keep receiving financial aid. To meet this requirement, Pacific students must maintain a cumulative 2.0 GPA and pass 67% of all units attempted.
Disbursement
When financial aid funds are paid to your college to cover costs like tuition, fees and on-campus housing and food. Any remaining funds are refunded to you to use on other educational expenses.