Glossary of Financial Aid Terms

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Acronyms

National Merit Scholarship Qualifying Test (NMSQT): See PSAT.

National Service Trust: President Clinton's national community service program. If you participate in this program before attending school, the funds may be used to pay your educational expenses. If you participate after graduating, the funds may be used to repay your federal student loans. Eligible types of community service include education, human services, the environment and public safety.

Need: The difference between the Cost of Attendance (COA) and the Expected Family Contribution (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

Need Analysis: The process of determining a student's financial need by analyzing the financial information provided by the student and his or her parents (and spouse, if any) on a financial aid form. The student must submit a need analysis form to apply for need-based aid. Need analysis forms include the Free Application for Federal Student Aid (FAFSA).

Need-Based: Financial aid that is need-based depends on your financial situation. Most government sources of financial aid are need-based.

Net Income: This is income after taxes, deductions and allowances have been subtracted.

New Borrower: See First-Time Borrower.