Below are some of the terms you may encounter during the Federal Aid direct loan application process.



A formal request to have a financial aid administrator review your aid eligibility

Award Letter

An official document issued by the University’s Financial Aid Office that lists all of the financial aid awarded to the student. The award letter will include the terms and conditions for the financial aid and information about the cost of attendance. You are required to sign a copy of the letter, indicating whether you accept or decline each source of aid, and return it to the Financial Aid Office

Award Year

The academic year for which financial aid is requested (or received)

Cost of Attendance (COA)

The total amount it should cost the student to go to University, including tuition and fees, room and board, allowances for books and supplies, transportation, and personal and incidental expenses. Loan fees, if applicable, may also be included in the COA.


Occurs when a borrower is allowed to postpone repaying the loan. If you have a subsidized loan, the federal government pays the interest charges during the deferment period. If you have an unsubsidized loan, you are responsible for the interest that accrues during the deferment period. You can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan


If the borrower fails to make a payment on time, the borrower is considered delinquent and late fees may be charged. If the borrower misses several payments, the loan goes into default

Dependency Status

Determines to what degree a student has access to parent financial resources

Direct Loan Program (DLP)

Includes the Federal Subsidized and Unsubsidized Loans, the Graduate PLUS Loan and the Parent/family Loan for Undergraduate Students (PLUS)


The release of loan funds to the University for Delivery to the borrower. The payment will be sent electronically to the University. Loan funds are first credited to the student's account for payment of tuition, fees, room and board and other school charges. Any excess funds are then paid to the student bank account

Eligible Non-Citizen

Someone who is not a US citizen but is nevertheless eligible for Federal student aid. Non-citizens who hold a student visa or an exchange visitor visa are not eligible for Federal student aid

Expected Family Contribution (EFC)

The amount of money that the family is expected to be able to contribute to the student's education, as determined by the Federal Methodology need analysis formula approved by Congress. The EFC includes the parent contribution and the student contribution, and depends on the student's dependency status, family size, number of family members in school, taxable and nontaxable income and assets.

Federal School Code

When you fill out the FAFSA you need to supply the Title IV Code for each school to which you are applying. For University of Wollongong it is G30914.

Free Application for Federal Student Aid (FAFSA)

Is an online organized method of gathering information about you and your family’s financial situation? This information is then analyzed according to US federal guidelines. On completion of the FAFSA, you will receive a Student Aid Report (SAR)

Grace Period

A short time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period may also kick in if the borrower leaves school for a reason other than graduation or drops below half-time enrolment. Depending on the type of loan, you will have a grace period of six months (Subsidized/Unsubsidized Loans) before you must start making payments on your student loans. The PLUS Loans do not have a grace period


An independent student is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18)


A type of financial aid which must be repaid, with interest

Loan Consolidation

A loan that combines several student loans into one bigger loan from a single lender. The consolidation loan is used to pay off the balances on the other loans


The difference between the COA and the EFC is the student's financial need -- the gap between the cost of attending the school and the student's resources. The financial aid package is based on the amount of financial need. The process of determining a student's need is known as need analysis. (COA – EFC = Financial Need)

Private Loans

Education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments

Master Promissory Note

The binding legal document that must be signed by the student borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy and cancellations. The student should keep this document until the loan has been repaid

Selective Service

Registration for the military draft. Male students who are US citizens and have reached the age of 18 and were born after December 31, 1959 must be registered with Selective Service to be eligible for federal financial aid. If the student did not register and is past the age of doing so (18-25), and the university determines that the failure to register was knowing and wilful, the student is ineligible for all federal student financial aid programs.

Subsidized/Unsubsidized Loans

Federal loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on need; unsubsidized loans aren't. The interest on the subsidized Stafford Loan is paid by the federal government while the student is in school and during the 6 month grace period. The Unsubsidized Stafford Loan may be used to pay the EFC

Student Aid Report (SAR)

Report that summarizes the information included in the FAFSA and must be provided to your school's FAO

Title IV Loans

Title IV of the Higher Education Act of 1965 created several education loan programs. One of this can be administered by an approved foreign school, namely the Direct Loan Program (DLP). These loans, also called Title IV Loans, which include the Federal Subsidized and Unsubsidized Loans, Federal PLUS Loans and Federal Consolidation Loans

US Department of Education reference: Glossary and acronyms