Financial Aid Terminology & FAQs
The Free Application for Federal Student Aid (FAFSA) is the form used by the U.S. Department of Education to determine your Expected Family Contribution (EFC) by conducting a “need analysis” based on financial information, such as income, assets and other household information, which you (and your parents if you are a dependent student) will be asked to provide. The form is submitted to, and processed by, a federal processor contracted by the U.S. Department of Education (ED), and the results are electronically transmitted to the financial aid offices of the schools that you list on your applications. For more information about the FAFSA, see "How to apply for Financial Aid."
The Student Aid PIN is used to electronically sign a FAFSA by both the student and their parent. Students would need to apply for a PIN. For more information, see "How to apply for Financial Aid."
The COA, also referred to as the “student budget,” includes both direct and indirect costs for a student’s education. Direct costs consist of tuition, room, board, and applicable fees. Whereas indirect costs include other important educational expenses such as books, personal expenditures, and transportation. Indirect costs are determined by the Office of Financial Aid and are based on regional and national averages.
The EFC is determined by results that are reported on the FAFSA. This value is calculated by using the income figures reported,
number in household, number in household going to college, and state of legal residence in a formula written by Congress. In most cases, the EFC represents the minimum amount a family would pay out of pocket.
A student’s financial need is calculated by subtracting the student’s cost of attendance (COA) by the expected family contribution (EFC). SNHU creates financial aid awards based on financial need.
Your SAR summarizes the data that you have reported from your FAFSA and indicates your Expected Family Contribution (EFC). For more information regarding the Student Aid Report, see "How to apply for Financial Aid."
At times, the Department of Education selects a student’s FAFSA application for a process called Federal Verification. In fact, 30 percent of all FAFSA applicants are selected at random. If a student is selected, SNHU is required to collect information to confirm the accurate information. More information about Federal Verification can be found in the Award Guide.
Stafford loans are fixed low interest loans that must be repaid and are available to both graduate and undergraduate students. Starting with the 2010-2011 academic year, SNHU will be participating in the William D. Ford Direct Loan Program (Direct Loan Program). This will allow the university to request student loan funds directly through the federal government.
Subsidized Stafford Loans are based on financial need and carry a 5.6% fixed interest rate for undergraduate students. For the 2010-2011 academic year that rate will decrease to 4.5% for undergraduates. Repayment of principal is deferred until 6 months after you graduate or cease half-time enrollment. The interest is paid by the government while you are enrolled at least half-time status in a degree program.
Unsubsidized Stafford loans are not based on financial need and have a 6.8% fixed interest rate. Repayment of the principal is deferred until 6 months after you graduate or cease half-time enrollment. Interest accrues while enrolled. Deferment options are available for
interest payments.
A master promissory note (MPN) is a document that is signed by students and their parents if they accept a Federal Student Loan. Before we can request any awarded Federal Student loans, SNHU must receive notification that a valid MPN must be signed. For more information about signing an MPN, see "Educational Loans."
Entrance loan counseling is required by all student loan borrowers in both the Stafford and Perkins loan programs. Entrance loan counseling will provide borrowers with an understanding of their rights and responsibilities of borrowing federal student loans. For more information regarding entrance loan counseling, see "Loan Counseling."