Career Cost 

FINANCIAL AID TERMS you need to know

Award Letter

This is a term sometimes used for an offer from a college or career school that states the type and amount of financial aid the school is willing to provide if you accept admission and register to take classes at that school.

Cost of Attendance (COA)

The total amount it will cost you to go to school—usually stated as a yearly figure. COA includes tuition and fees; room and board (or a housing and food allowance); and allowances for books, supplies, transportation, loan fees and dependent care. It also includes miscellaneous and personal expenses, including an allowance for the rental or purchase of a personal computer; costs related to a disability; and reasonable costs for eligible study-abroad programs. For students attending less than half-time, the COA includes tuition and fees and an allowance for books, supplies, transportation and dependent care expenses. It can also include room and board for up to three semesters or the equivalent at the institution. But no more than two of those semesters, or the equivalent, may be consecutive. Contact the financial aid administrator at the school you’re planning to attend if you have any unusual expenses that might affect your COA.

Direct PLUS Loan

A loan made by the U.S. Department of Education to graduate or professional students and parents of dependent undergraduate students. The borrower is fully responsible for paying the interest regardless of the loan status

Expected Family Contribution (EFC)

This is the number that’s used to determine your eligibility for federal and state student financial aid. This number results from the financial information you provide in your FAFSA® form, the application for federal student aid. Your EFC is reported to you on your Student Aid Report (SAR).

Federal Pell Grant

A federal grant for undergraduate students with financial need.

Federal Perkins Loan

A federal student loan made by the recipient’s school, for undergraduate and graduate students who demonstrate financial need. 

Federal Student Loan

A loan funded by the federal government to help pay for your education. A federal student loan is borrowed money you must repay with interest.

Federal Work-Study

A federal student loan program that provides part-time employment while you are enrolled in school to help pay your education expenses.

Financial Aid Package

The total amount of financial aid (federal and nonfederal) a student is offered by a college or career school. The school’s financial aid staff combines various forms of aid into a “package” to help meet a student’s education costs.


Financial aid, often based on financial need, does not need to be repaid (unless, for example, you withdraw from school and owe a refund).


Based on a student’s skill or ability. Example: A merit-based scholarship might be awarded based on a student’s high grades.


Based on a student’s financial need. Example: A need-based grant might be awarded based on a student’s low income.

Net Price

An estimate of the actual cost that a student and his family need to pay in a given year to cover education expenses for the student to attend a particular school. Net price is determined by taking the institution’s cost of attendance and subtracting any grants and scholarships for which the student may be eligible.

A Student Aid Report (SAR)

A document that provides basic information about your eligibility for federal financial aid.


Money awarded to students based on academic or other achievements to help pay for education expenses. Scholarships generally do not have to be repaid. 

Get more information about how to read your award letters at

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