Glossary of Financial Aid Terms

Academic Year
This is a measure of the academic work to be accomplished by a student. Mountwest Community & Technical College defines our own academic year, but federal regulations set minimum standards for the purpose of determining financial aid awards. By federal requirement, the academic year must be at least 30 weeks of instructional time in which a full-time student is expected to complete at least 24 semester hours.

Award Year
The award year begins in August and extends through July of the next year. Funding for the Federal Pell Grant and campus based programs (such as Federal Work Study and SEOG ) is provided to Mountwest Community & Technical College on the basis of the award year.

Base Year

The base year is the calendar year proceeding the award year. For instance 2007 is the base year used for the 2008-2009 award year. The FAFSA uses family income from the base year because it is more accurate and easier to verify. Beginning with the 2017-2018 aid year students will begin using the income for two year’s prior to the application. For instance, students filing the 2017-2018 FAFSA will use the 2015 income information.

Campus-Based Aid Programs
The Federal Supplemental Educational Opportunity Grant and the Federal Work Study program are examples of “campus-based” aid programs because the funds are administered directly by Mountwest Community & Technical College’s Office of Student Services. Mountwest Community & Technical College awards these funds to students using federal guidelines.

Central Processing System (CPS or The Processor)
The CPS is the US Department of Education’s processing facility for application data and is currently located in Illinois. The CPS receives student information from the application processors, calculates the student’s official EFC and returns the student’s information to the application processor who then mails a Student Aid Report to the student.

Cost of Attendance (Also Known As Cost of Education or Student Budget)
The student’s cost of attendance includes not only tuition and fees, but also living expenses while attending school. The cost of attendance is determined by the school using guidelines established by federal regulation. A student’s cost of attendance is compared to the expected family contribution to evaluate the student’s need for aid.

When a borrower is allowed to postpone repaying a loan is known as deferment. 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 postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. Federal loan programs allow students to defer their loans while they are in school at least part-time. If you don’t qualify for a deferment, you may be able to get forbearance. You cannot get a deferment if your loan is in default.

Failure to repay a loan in accordance with the terms of the promissory note.

Default Rate
A percentage calculated each year for each post-secondary school based on the number of former students who have defaulted on a Federal student loan received while attending that school.

The release of funds to the school for delivery to the borrower. Disbursement credits the student account with aid funds. Aid is posted to charges on the student account and any remaining difference is issued to the student in a difference check. The difference check is generally available within 10 working days of disbursement and is mailed to the local student address which is on file in the Office of Student Services. Parent loan proceeds are first credited to the student account charges and any difference funds are mailed directly to the parent.

The Data Release Number is your personal identifier printed in the upper right corner of your Student Aid Report.

Electronic Award
Electronic awards will be offered after April 15. You will receive an e-mail notification to your campus assigned e-mail address instructing you to access your award on myMCTC. Students must accept students loans. They will not be automatically accepted.

Estimated Award Letter
An official document issued by the Office of Financial Aid that lists all the aid awarded to the student. The letter provides details on the analysis of your financial need and the breakdown of your financial aid package according to amount, source and type of aid. This type of paper notification ceased at the end of the 2004-2005 award year. The award letter has been replaced with an electronically available version on MyMCTC. A paper copy may be provided upon request.

Expected Family Contribution (EFC)
This is the amount the student’s family is expected to contribute towards the cost of attendance for the purposes of the financial aid programs. The EFC is printed on the front of the Student Aid Report.

Financial Aid Counselor
A college employee who is involved in the administration of financial aid.

Financial Need
This is the difference between the student’s cost of attendance and the expected family contribution (EFC).

During forbearance the lender allows a borrower to temporarily postpone repaying the principal of a loan, but the interest charges continue to accrue, even on subsidized loans. The borrower must continue paying the interest charges during the forbearance period. Forbearances are granted at the lender’s discretion, usually in cases of extreme financial hardship or other unusual circumstances where a borrower does not qualify for a deferment. You cannot receive forbearance if your loan is in default.

Free Application for Federal Student Aid (FAFSA)
This is the federal aid application used to collect household and financial information from students. This is an application for Pell, Campus-Based Aid, Student and Parent Loans and State Grants.

Professional Judgement
For need based federal aid programs, the financial aid administrator can adjust the EFC, COA or change dependency status when extenuating circumstances exist. This delegation of authority from the federal government to the financial aid administrator is called Professional Judgment (PJ). PJ decisions are final at the level of the Financial Aid Office. A PJ decision cannot be appealed to the U.S. Department of Education.

Promissory Note (Prom Note)
This is a legal document which the borrower must sign to get a loan. By signing this note the borrower promises to repay the loan, with interest, in specified installments. The promissory note includes information about the grace period, deferment or cancellation provisions, and the student’s rights and responsibilities with respect to the loan.

Student Aid Report (SAR)
An output document mailed to the student by the Federal Aid Application Processor. The SAR contains financial and other information reported by the student on the FAFSA. That information is entered into the processing system and a SAR is produced. The student’s eligibility for aid is determined by using the EFC printed on the front of the SAR.

A procedure where schools check the information the student reported on the financial aid application. Schools must verify information provided by students who are selected by the federal Central Processing System. If your application is selected, you will receive e-mails requesting that you access your missing documents online.

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