Glossary of Financial Aid Terms

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Acronyms

Satisfactory Academic Progress (SAP): To be eligible to receive federal student aid at MSU-Northern, a student must make satisfactory academic progress toward your degree objective. See: the Policies and Procedures page on Satisfactory Academic Progress.

Scholarship: A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships are a form of gift aid and do not have to be repaid. Many scholarships are restricted to students in specific courses of study or with academic, athletic or artistic talent. See Scholarships available at MSU-Northern.

Scholarship Search Service: A service that charges a fee to compare the student's profile against a database of scholarship programs.

Scholastic Assessment Test (SAT): One of the two national standardized college entrance examinations used in the US. The other is the ACT. The SAT (previously known as the Scholastic Aptitude Test) is administered by the Educational Testing Service (ETS). Most universities require either the ACT or the SAT as part of an application for admission.

Secondary Market: An organization that buys loans from lenders, thereby providing the lender with the capital to issue new loans. Selling loans is a common practice among lenders, so the bank you make your payments to may change during the life of the loan. The terms and conditions of your loan do not change when it is sold to another holder. Sallie Mae is the nation's largest secondary market and holds approximately one third of all educational loans.

Secured Loan: A loan backed by collateral. If you fail to repay the loan, the lender may seize the collateral and sell it to repay the loan. Auto loans and home mortgages are examples of secured loans. Educational loans are generally not secured.

Selective Service: Registration for the military draft. Male students who are US citizens and are between the ages of 18 and 25 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 school determines that the failure to register was knowing and willful, the student is ineligible for all federal student financial aid programs. The school's decision as to whether the failure to register was willful is not subject to appeal. Students needing help resolving problems concerning their Selective Service registration should call 1-847-688-6888. Register on-online today!

Separated Marital Status: A separated student is one who is married but is currently living in a separate residence form his/her spouse and intends to file for a divorce.

Servicer: An organization that collects payments on a loan and performs other administrative tasks associated with maintaining a loan portfolio. Loan servicers disburse loans funds, monitor loans while the borrowers are in school, collect payments, process deferments and forbearances, respond to borrower inquiries and ensure that the loans are administered in compliance with federal regulations and guarantee agency requirements.

Simple Interest: Interest that is paid only on the principal balance of the loan and not on any accrued interest. Most federal student loan programs offer simple interest. Note, however, that capitalizing the interest on an unsubsidized Stafford loan is a form of compounded interest.

Simplified Needs Test: If the parents have an adjusted gross income of less than $50,000 and every family member was eligible to file an IRS Form 1040A or 1040EZ (or wasn't required to file a Federal income tax return), the Federal Methodology ignores assets when computing the Expected Family Contribution (EFC). If you filed a 1040 but weren't required to do so, you may be eligible for the simplified needs test. Details on the eligibility requirements appear on the Simplified Needs Test Chart.

Special Circumstances: A formal request to have a financial aid administrator review your aid eligibility and possibly use Professional Judgment to adjust the figures. For example, if you believe the financial information on your financial aid application does not reflect your family's current ability to pay (e.g., because of death of a parent, unemployment or other unusual circumstances), you should definitely request a review. The financial aid administrator may require documentation of the special circumstances or of other information listed on your financial aid application.

Stafford 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 Subsidized Stafford Loan was formerly known as the Guaranteed Student Loan (GSL). The Unsubsidized Stafford Loan may be used to pay the Expected Family Contribution (EFC).

Undergraduates may borrow up to $23,000 ($2,625 during the freshman year, $3,500 during the sophomore year and $5,500 during the third, fourth and fifth years) and graduate students up to $65,500 including any undergraduate Stafford loans ($8,500 per year). These limits are for subsidized and unsubsidized loans combined. The difference between the subsidized loan amount and the limit may be borrowed by the student as an unsubsidized loan.

Higher unsubsidized Stafford loan limits are available to independent students, dependent students whose parents were unable to obtain a PLUS Loan and graduate/professional students. Undergraduates may borrow up to $46,000 ($6,625 during the freshman year, $7,500 during the sophomore year and $10,500 during each subsequent year) and graduate students up to $138,500 including any undergraduate Stafford loans ($18,500 per year). These limits are for subsidized and unsubsidized loans combined. The amounts of any subsidized loans are still subject to the lower limits.

Student Aid Report (SAR): Report that summarizes the information included in the FAFSA and must be provided to your school's Financial Aid Office. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC). You should receive a copy of your SAR four to six weeks after you file your FAFSA. Review your SAR and correct any errors on part 2 of the SAR. Keep a photocopy of the SAR for your records. To request a duplicate copy of your SAR, call 1-800-4-FedAid.

Student Contribution (SC): The amount of money the federal government expects the student to contribute to his or her education and is included as part of the Expected Family Contribution (EFC). The SC depends on the student's income and assets, but can vary from school to school. Usually a student is expected to contribute about 35% of his or her savings and approximately one-half of his summer earnings above $2,250.

Student Data Form: A financial aid form that requires supplemental information, which was not asked for, on the Free Application for Federal Student Aid (FAFSA).

Student Educational Plan (SEP): The section on an appeal which requires information on the student's academic goal and the classes he/she will take to reach that goal.

Subsidized Loan: With a subsidized loan, such as the Perkins Loan or the Subsidized Stafford Loan, the government pays the interest on the loan while the student is in school, during the six-month grace period and during any deferment periods. Subsidized loans are awarded based on financial need and may not be used to finance the family contribution. See Stafford Loans for information about subsidized Stafford Loans. See also Unsubsidized Loan.

Supplemental Documentation: Forms and statements required by the Financial Aid Office to support and prove information reported on the Free Application for Federal Student Aid (FAFSA).