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The Aspen Institute Aspen Prize for Community College Excellence Top 150 2017
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Glossary of Financial Aid Terms


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Academic ProbationA status imposed on a student because of poor grades (less than 2.0 GPA) or improper conduct. Usually the cause for probation must be corrected in a specified period of time.
Academic YearThe school year typically beginning with Summer semester and ending with the Spring semester.
AdmissionThe process a student takes to apply to college. Students interested in applying for MCC may contact the Admissions Office to complete the admissions process at (810) 762-0315.
Award LetterAn official document from the Student Financial Services that indicates the type and amount of financial aid awarded to a student per semester in an academic year.
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Bankruptcy A person is declared bankrupt, when found to be legally insolvent and the person's property is distributed among creditors or otherwise administered to satisfy the interests of creditors. Generally, federal student loans cannot be discharged through bankruptcy.
BorrowerThe person who applies for a loan and receives the proceeds (or money) of the loan.
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CapitalizationAddition of unpaid interest to the principal balance of a loan which increases the total outstanding balance due. See also Interest Capitalization
ClaimAn application made to a guarantor for payment of an insured student loan for loss of payment due to borrower death, total and permanent disability, bankruptcy, default, or school closure.
CollectionsThe activities and or actions associated with getting payment for unpaid balances to the college.
Combined BillingLenders (or servicers) generally offer a combined bill for all of a borrower's loans serviced by that lender/servicer so that the borrower only needs to make one payment per month for all of the loans.
ConsolidationCombining several federal (and possibly private) loans from multiple lenders into a single loan to reduce the monthly payment amount and/or increase the repayment period.
Contact HourThe amount of course class time used to calculate tuition charges. Financial Aid does not use contact hours when determining and calculating financial aid eligibility.
CosignerA person who signs the promissory note in addition to the borrower and is responsible for the obligation if the borrower does not pay. A cosigner must be able to pass a credit review and must live in the United States.
Cost of AttendanceThe total amount it costs a student to go to school. This amount is used by financial aid when determining eligibility for need-based aid. The cost of attendance or budget includes tuition & fees, books, transportation, room & board and miscellaneous expenses.
Course FeeFee associated with a specific class for additional costs that are incurred using specialized equipment or laboratory supplies.
Credit BalanceThe amount remaining in the student's account after all on-campus charges have been paid. A credit balance is processed as a refund to the student.
Credit HourCredit given for a course completion toward graduation. Financial Aid eligibility is determined and calculated based on credit hours of enrollment.
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Date of RecordSpecific date during a semester when credit hours enrolled are reported to the State of Michigan. Credit hours enrolled as of the date of record will be reflected on the academic transcript. See specific semester schedules to determine the Date of Record for that semester. Classes added to a student's schedule on or after the Date of Record will not be reflected. Some types of financial aid, including Pell Grants and TIP will not pay for any classes registered on or after the date of record.
DefaultThe failure to repay a loan according to the terms of the promissory note. Default occurs at 180 days when the delinquency date is prior to 10/7/98, and 270 days when the delinquency date is on or after 10/7/98. Defaulting on a student loan makes you ineligible to receive financial aid in the future until the default has been cleared.
DefermentAn approved, temporary suspension or reduction of loan payments. Student must meet certain criteria set by the federal government. For some loans the federal government pays the interest during a deferment. On others, the interest accrues and is capitalized, and the borrower is responsible for paying it.
DelinquencyFailure to make monthly loan payments when due. Delinquency begins with the first missed payment.
Dependent StudentA college student who does not meet the criteria, as defined by federal law, to be considered an independent student for the purpose of receiving financial aid. A dependent student must report parental income and asset information on their FAFSA.
Dependency OverrideA request for a change in dependency status of a financial aid student, based on special circumstances. The federal government does not consider a parent's refusal to provide financial assistance or the required FAFSA information a valid reason for a student being deemed as independent. Requesting a dependency override does not guarantee approval. Students should be aware that the school is not required to perform dependency overrides, and if the financial aid administrator determines that an override is not appropriate, the decision cannot be appealed to the U.S. Department of Education.
Direct Lending (DL)The Direct Loan lender is the federal government, through the U. S. Department of Education, rather than through banks and credit unions as with the Federal Family Educational Loan Program (FFELP).
DisbursementRelease of financial aid to the student’s school account.
DischargeThe release of a borrower from a loan obligation.
Disclosure StatementA statement sent from the lender explaining actual costs and terms of the student loan, including interest rate and additional finance charges, and anticipated disbursement dates.
DocumentationAny requested information that verifies or supports the data provided by the student on their FAFSA.
DropWhen the student withdraws from one or more courses during the semester. Students can do this by either logging into WebAdvisor or filling out a registration worksheet and turning it into Registration. A drop is during the college's refund period, and is for either a 100% refund or 50% refund. Refund periods are designated in the class schedule booklets. If the student drops classes which changes enrollment status after financial aid has been paid to his/her account or paid to the student in a refund, the student will be billed for the amount received and for which the student was not eligible.
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EFC (Expected Family Contribution)The dollar amount that a family is expected to pay toward a student's educational costs as determined by the US. Dept. of Education. The federal formula is based on family earnings, assets, number of students in college and size of the family.
Enrollment FeeA non-refundable fee charged to students for enrollment each semester.
Enrollment StatusDetermined by actual credit hours of enrollment per semester. The enrollment status determines the amount of the student's financial award, based on the following categories
Full-time = 12 credit hours or more
Three-quarter time = 9-11 credit hours
Half-time = 6-8 credit hours
Less than half-time = 1-5 credit hours
Entrance CounselingRequired counseling to inform students of their rights, responsibilities, and borrower options under the Federal Direct Stafford Loan Program. At Mott these sessions are conducted online.
Exit CounselingRequired counseling to inform students of their rights, responsibilities, and borrower options under the Federal Direct Stafford Loan Program. At Mott these sessions are conducted online.
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Free Application for Federal Student Aid (FAFSA)An online application that the student (and parents of dependent students) must complete every year to apply for federal financial assistance including Direct loans.
Financial Aid HoldStudents classes will be held for a specific semester based on the financial aid eligibility.
Financial Aid PackageThe total amount of financial aid a student is offered by the school. This information which includes grants, scholarships, work-study and loans is listed in the college's financial aid "Award Notification" section on WebAdvisor.
First Half ClassesFirst Half classes meet for approximately 7 1/2 weeks. Fall and Winter First Half classes begin on the same start date as a 15 week class. First Half classes end on the 37th day.
Fixed InterestOn a fixed interest loan, the interest rate remains the same for the life of the loan.
ForbearanceTemporary cessation of regularly scheduled payments or temporarily permitting smaller payments than were originally scheduled.
Fresh StartAn official procedure for waiving course grades for MCC courses that are more than 5 years old. Fresh Start is not used for Financial Aid.
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Garnish WagesIf you default on your student loan, money may be withheld from your paycheck and paid to your lender on your behalf.
Grace PeriodA time period during which the borrower is not required to begin repaying their student loans. This period will begin if the borrower graduates or drops below half-time enrollment. The grace period is six months long for Direct loan borrowers. PLUS loan borrowers do not have a grace period.
Grade Point Average (GPA)Calculated by using the final grade point value received in each course and the number of attempted credits.
Graduated RepaymentA repayment schedule where the monthly payments are smaller at the start of the repayment period and become larger later on.
GrantGrants are forms of financial aid that the student does not have to pay back unless the student receives grant money and does not attend classes or withdraws from all classes during a portion of the semester.
Guest StudentA student attending one semester with permission from their home school. These students are required to complete a special application process. Final grades are forwarded directly to the home school. Guest students are not eligible for financial aid.
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HoldPrevents registration due to an unpaid bill or unresolved student disciplinary issue.
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Independent StudentA student who meets one or more of the following criteria and therefore is not required to include parental information on their FAFSA:
  • Age 24 by December 31 of the academic year for which aid is requested
  • Orphan or ward of the court
  • Veteran of the U.S. Armed Forces
  • Graduate or professional student
  • Married prior to signing and filing the Free Application for Federal Student Aid (FAFSA)
  • Have legal dependents other than a spouse
  • Deemed to be independent by the school's financial aid administrator because of special circumstances.
Information DeskAreas designated throughout campus to provide general information to students. In addition they may also provide tickets in order to be seen by certain departments. Also referred to as an Information Kiosk.
InterestAn amount, calculated as a percent of the principal loan amount that is charged for borrowed money. See Fixed Interest and Variable Interest.
Interest CapitalizationAddition of unpaid interest to the principal balance of a loan which increases the total outstanding balance due. See also Capitalization.
Interest-Only PaymentA payment that covers only accrued interest owed on a loan and none of the principal balance. Interest-only payments do not prohibit borrowers from making additional or larger payments at any time if the borrower desires.
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LenderThe financial institution that provides loan funds to be borrowed.
LoanA sum of money borrowed from a lender that requires repayment. The borrower promises to repay a specified amount under prescribed conditions. The lender usually charges interest for use of the money, and the amount borrowed typically is repaid with interest over a period of time.
Loan ProceedsThe money the borrower receives from a loan (or the amount borrowed minus fees).
Loan TermA length of time in which to repay a loan. The term is usually agreed to by lender and borrower within the borrower's contract of promissory note. Also refers to language used in legal documents, such as the promissory note, that defines how a loan will be borrowed and repaid. Also refers to some postsecondary educational institutions' academic period.
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Master Promissory Note (MPN)The promissory note the student signs when borrowing a loan from the Federal Direct Loan program. When the student signs a Federal Direct Loan promissory note, a binding legal document, they promise to repay the student loan(s). The note also includes important language about rights and responsibilities as a borrower. The Master Promissory Note covers both the Subsidized and Unsubsidized Direct Loans.
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Origination FeeAn amount, payable by the borrower and deducted from the principal of a loan prior to disbursement to the borrower. For federally backed loans, the origination fee is paid to the federal government to offset the cost of the interest subsidy to borrowers. For private loan programs, the origination fee is generally paid to the originator to cover the cost of administering and insuring the program.
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PLUS LoanParent Loans for Undergraduate Students. A student loan taken out by the dependent student's parent to cover the student's educational costs. The parents' credit history is considered with this loan.
PrincipalAmount borrowed, which may increase as a result of interest capitalization, and the amount on which interest is calculated. Also known as principal balance.
Private LoansPrivate loans, also known as alternative loans, can provide supplemental funding when other financial aid does not cover costs. These loans are offered by banks, other financial institutions, and schools to parents and students. Student's credit history is considered with these loans.
Program of StudyDeclared major or program that a student is pursuing. This can be an associate degree, certificate program or transfer program. Students must have an approved Program of Study in order to receive Title IV funding.
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Reduction of Family IncomeA form the student may complete (at their option) if their financial situation changes significantly from the previous year, based on special circumstances (i.e., death in the family, divorce, separation, loss of employment). This form can only be received between June 1st and January 31st. Requesting a Reduction in Family Income does not guarantee approval.
RepaymentThe time during which a borrower actively pays back an education loan.
Return of FundsMoney returned to the U.S. Department of Education for a student who dropped classes prior to the 60% completion date for a semester.
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ScholarshipA form of financial aid that doesn't have to be repaid. These awards come from many different sources and are based on a wide variety of criteria.
School CodeA federal code assigned to each college or university that participates in financial aid programs. The code number for Mott Community College is 002261. By listing this code on your Free Application for Federal Student Aid (FAFSA), Mott Community College will receive the results of your application.
Second Half ClassesSecond Half classes meet for approximately 7 1/2 weeks. Fall and Winter Second Half Classes begin one day after First Half classes end. Second Half classes have the same end date as a 15 week class.
ServicerA third party organization that maintains a lender's student loan portfolio and is paid a fee to do so.
Standard RepaymentA repayment schedule reflecting equal monthly payments over a 10 to 15 year period.
Standards of Academic Progress (SAP )A policy the student must meet in order to be eligible to receive financial aid. Satisfactory Academic Progress (SAP) is calculated on all attempted courses and is determined by a GPA of 2.0 or better, completion of a minimum of 67% of credit hours and completing an associate degree within 93 maximum credit hours.
Student Aid Report (SAR)A report sent by email or mail to the student by the US Dept. of Education showing the results of the student's processed FAFSA application.
Student Loan CollectionsThe activities and/or actions associated with getting payment for unpaid loan principal and interest from a borrower after that borrower defaults on the loan. The players in the loan process that could be taking these actions include lenders, guarantors, servicers, and collection agencies.
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Unmet NeedThe difference between the student's educational costs (also known as Cost of Attendance or budget) and their EFC. This is used to determine grant, work-study, loan and scholarship eligibility. Students can not receive more financial aid than there is need.
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Variable InterestWith a variable interest loan, the interest rate changes periodically. For example, the interest rate might be affected by the cost of the U.S. Treasury Bills (e.g., T-Bill rate plus 1.7%) and be updated monthly, quarterly, semi-annually, or annually.
VerificationProcess whereby a student must document information reported on their FAFSA and submit it to Student Financial Services.
Verification FormMCC internal form used to collect information needed to complete the Financial Aid verification process.
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WithdrawWhen a student drops a class or all classes after the Date of Record.
Work StudyA financial aid program providing students, who demonstrate a financial need, part-time employment on campus during the school year. Funds offered under this program must be earned through on campus employment.

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May 18, 2016
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