Financial Aid Definitions

Ability To Benefit (ATB) Test – An option available to become eligible for Federal Student Aid if the financial aid applicant does not already have a high school diploma, proof of completing a Home School Secondary Education, or General Education Development (GED) certificate. Note: current high school or secondary home school students are not eligible to receive Federal Student Aid funds.


Additional Unsubsidized Direct Loan - see Unsubsidized Direct Loan

Alternative Loan (also known as a Private Loan) – Is a consumer loan that college students may seek from a private lender to supplement education costs. The student’s ability to obtain a private loan is typically based on his/her credit score and ability to secure a co-signer on the loan. Alternative loans typically carry higher rates of interest than federal loans. LTC will only certify private loans up to the annual Cost of Attendance (also known as Budget). The total amount of aid that a student receives cannot exceed the Cost of Attendance or Budget.

Award Period or Award Year - The time period during an academic year in which financial aid is processed. At LTC, the award year is made up of the Summer, Fall and Spring semesters. The start date(s) selected by a student determines which semester(s) are in the student’s award period or award year.

Borrower - The person who obtains and receives a student loan to pay for college costs.

Budget- See Cost of Attendance

Capitalization of Loan Interest - The process of deferring interest payments as those payments come due. Deferring interest payments adds the accrued interest to the principal amount of the loan. Although capitalizing is a way to postpone interest payments, it adds to the amount of the principal and, consequently, increases both the interest (based on the higher principal) and the overall amount that must eventually be repaid.

Consortium Agreement - An agreement that allows a student to take courses at more than one college during the same semester and receive aid based on the combined enrollment at these institutions. The course must count towards graduation from your degree at LTC. LTC may enter into a consortium agreement with any accredited school that is eligible to offer Federal Financial Aid to their students.

Cost of Attendance or COA (also known as Cost of Education or Budget) – The estimated maximum cost for the student to attend LTC. Costs factored into the COA include: tuition and fees, room and board, transportation, books, supplies, and other personal expenses. Different standard budget amounts are established for students living with parents and off-campus based on the length of time they will be attending for the award year.

Deferment - A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s).

Dependent Student - for financial aid purposes, is defined as a student who did not turn 24 by December 31st of the most recent year; is not married; is not currently on active duty for purposes other than training; is not a veteran of the U.S. Armed Forces; does not have children or dependents that receive more than one half of their support from the student; has not been in foster care since the age of 13; is not an orphan; is not an emancipated minor or a minor in legal guardianship; has not been verified as an unaccompanied youth who was homeless or are at risk of homelessness.

Enrollment Status - An indication of whether a student is attending school full time, three quarter time, half time or less than half time.

Family Educational Rights and Privacy Act (FERPA) – Federal legislation enacted to protect the privacy of students’ educational records. In order for a third party (such as your spouse or parent – anyone who is NOT the student) to gain access to your educational records, you must provide written consent.

Federal Student Aid (FSA) Programs (also known as federal financial aid, financial aid or Title IV Programs) - Financial aid programs that are administered by the U.S. Federal Government.

Financial Aid Package (also known as an aid package, award or financial aid offer) - The amount of financial assistance offered to a student to help reduce the cost of post-secondary education. Types of awards can include a combination of scholarships, grants, work study and loans.

Financial Aid Notification (also known as an award letter) – A letter sent to students informing them of the financial assistance they qualify to receive. This notice includes types and amounts of aid being offered, standard budget, family contribution, minimum required credit hours, residency, award period, and terms and conditions. Here at LTC this will be based on assumed full time enrollment unless noted.

Financial Need – A federal formula to determine the student’s financial need. Financial Need is the difference between the COA and the EFC (COA – EFC = Financial Need). This is the financial gap between the cost of attending the school and the student's financial resources (as determined by the FAFSA). Eligibility for need-based financial aid programs is determined using this formula.

Forbearance, Student Loan – An agreement when a loan is in repayment between the lender and the student loan borrower that results in a temporary postponement or reduction of repayment amount on a previously borrowed student loan. Forbearance may be available to you if you have experienced a financial hardship such as unemployment or are in a situation that your monthly minimum repayment amount exceeds a defined percentage of your monthly income.

Free Application for Federal Student Aid (FAFSA) - The application used to apply for Federal Student Aid Programs including grants and loans. The student’s eligibility to qualify for Federal and State Student Aid programs is based on the expected family contribution (EFC) determined from the information reported on the FAFSA, and on a number of other factors. Completion of the FAFSA is required each academic year that the student requests Federal and State Student Aid.

Grace Period - A six-month period after you leave school and before the first payment of your Subsidized and/or Unsubsidized Stafford Loan(s) must be made. The grace period begins the day after the borrower ceases to be enrolled at least half time. Students are entitled to one grace period.

Grant - A type of financial aid based on financial need.

Independent Student - For purposes of Federal Student Aid eligibility, an independent student is one who, by federally determined rules, meets one or more of the following criteria:

  • 24 years old as of January 1 of the upcoming academic year.
  • Married prior to signing and filing the FAFSA.
  • Has children who receive more than half their support from the student, and will continue to receive such support during the award year.
  • Has legal dependents (other than a spouse or child) who live with the student and receive more than half their support from the student and will continue to receive such support during the award year.
  • A veteran of the U.S. Armed Forces.
  • Currently serving on active duty in the U.S. Armed Forces for purposes other than training.
  • An orphan, foster child or ward of the court effective at age 13 or older even if the status has changed later.
  • Is or was, upon turning age 18 an emancipated minor (released from control of their parent or guardian) or in legal guardianship, both as adjudicated by a court in their state of legal residence.
  • An unaccompanied homeless youth or an unaccompanied youth who is self-supporting and at risk of being homeless.

A parent refusing to provide support for their child's education is not sufficient for the child to be declared independent.

Institutional Student Information Record (ISIR) – The file that the U.S. Department of Education sends to the schools that the student asks to receive your FAFSA. The ISIR contains all of the student's FAFSA data. After the U.S. Department of Education processes a student’s FAFSA, the student receives a Student Aid Report, and the schools that the student lists on the FAFSA will receive the student’s ISIR.

Interest – money charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal balance of the loan.

Loan - A type of financial aid which must be repaid with interest.

Master Promissory Note (also known as an MPN) – a legally-binding contract between a lender and a borrower. The promissory note contains the terms and conditions of the loan, including how and when the loan must be repaid even if the loan is sold to another lender or servicing agency.

National Student Loan Database System (NSLDS) - A system of the federal government which houses a student's federal educational loan borrowing history. All lenders are required to report students’ loan information to this database system.

Official Withdrawal - A student who drops all course sections on or after the first day of instruction. Students must request to drop a class in person as the student’s signature is required on a Drop Form unless the student is enrolled in all distance learning courses. If the student is enrolled in all distance learning courses, a student may call a counselor or the LTC Information Service Center to request a drop.

Pell Grant - A federal grant program offered to undergraduate students enrolled for a minimum of one (1) credit with high financial need based on the student's expected family contribution (EFC) as reported on the FAFSA (or if selected for verification, the student’s verified EFC). The actual awards vary based on the number of enrolled credits.

Professional Judgment - Financial aid administrator discretion, based on special circumstances of a student, to change data elements used in determining financial aid eligibility for a student.

Program of Study- A degree, program or major plan of study. Students must designate an eligible program of study before being awarded Federal Student Aid.

Satisfactory Academic Progress or SAP - A student must maintain Satisfactory Academic Progress or SAP (or the terms and conditions of a previous appeal) in order to be eligible to continue receiving Federal Student Aid.

Selective Service - Registration for the military draft. Male students who are U.S. citizens between 18 – 26 years of age and who were born after December 31, 1959, must be registered with Selective Service to be eligible to receive Federal Student Aid. Students needing help resolving problems concerning their Selective Service registration should visit www.sss.gov or call 1-847-688-6888. LTC is unable to process your request for Federal Student Aid until Selective Service matters are resolved by the student.

Student Aid Report - The Student Aid Report (SAR) includes the information students reported on the FAFSA. The SAR will contain information on eligibility for grants.

Subsidized Direct Loan - This loan is awarded on the basis of financial need. Students will not be charged interest before they begin repayment or during authorized periods of deferment.

Subsidized Loan - A federally financed student loan made to students meeting eligibility requirements. The federal government does not charge interest on these loans while the borrowers are enrolled at least half time, during the grace period, or during authorized periods of deferment. Eligibility for a subsidized loan is based on need.

Unofficial Withdrawal - A student who has stopped attending at some point during a term and did not go through the official withdrawal process. Since LTC is not required to take attendance, the Financial Aid Department assumes a student who receives all F’s for a term has stopped attending and is considered an unofficial withdrawal.

Verification - The process the U.S. Department of Education uses to make sure that the information reported on the FAFSA is accurate. Technical and administrative procedures are used by the educational institution to detect and resolve inaccuracies in the data supplied on the FAFSA. Evaluation of tax and asset documentation is required. If you have been selected for verification by the U.S. Department of Education, LTC will request the information that you are responsible to provide. Once you have provided the information, LTC will evaluate the documents for processing.

Withdraw-

  1. The grade received once a student formally removes themselves from a course or is administratively removed from a course after the course’s drop/add period has passed.
  2. The act of exiting one, several or all courses after the drop/add period has passed. If the student withdraws from all classes after the drop/add period has passed, the student may owe a balance to LTC for Federal Student Aid disbursed, but for which the student is no longer eligible.
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