Glossary of Terms

A

ACT - a test required or accepted at all public and many private universities in Kentucky. The ACT Assessment includes four sections-English, math, reading, and science reasoning. Scores are used in college admissions, awarding scholarships, and class placement, including honors programs.

Advanced Placement (AP) Program - a program that lets high school students study college-level subjects and receive advanced placement and/or credit upon entering college.

alternative loan - a loan other than a federal student loan that is used to pay for college expenses not covered by a student's financial aid package.

associate degree - up to a 3-year program in applied science (AAS) or applied technology (AAT) in tech majors meant to lead directly to a job. Typically, courses do not transfer to a 4-year degree. Or, up to a 3-year program of associate of arts (AA) or science (AS) in programs that can transfer to 4-year colleges and lead to a bachelor's degree.

B

bachelor's degree - a program lasting 4 to 5 years, including general education, a major, and electives leading to degrees like a bachelor of arts (BA) or a bachelor of science (BS).

borrower - a person legally responsible for repaying a loan and who has signed a promissory note.

C

certificate - a 6- to 15-month program typically in a vocational or technical area to prepare for a job in a specific career.

CLEP - the College-Level Examination Program (CLEP) offers tests for subjects often taken during the first two college years. Many colleges use CLEP scores to award college credit. Some private industries, businesses, and other groups use CLEP scores to satisfy requirements for licensing, advancement, and admissions to training programs.

commuter students - students who live off-campus instead of in a college dormitory or other campus housing.

consolidation - the combination of several types of federal education loans into one new loan that can simplify repayment.

conversion scholarship/loan - a financial aid award that requires you to provide certain services after you graduate. If you perform the services, the award doesn't have to be paid back. If you don't perform the services, the award is considered a loan that you have to pay back with interest.

credit-by-examination - a process in which students can earn credit for college-level knowledge by passing a test. The College-Level Examination Program, the Advanced Placement Program and the International Baccalaureate Program allow students to earn college credit in this way.

credit hour or clock hour - a unit of measurement for a school's educational program. A class meeting for an hour on three days a week typically counts for three credit hours. Most community colleges, four-year colleges, and universities use credit hours. Many private proprietary schools use clock hours.

D

diploma - a program lasting up to two years in a vocational or technical area to prepare for a job. This diploma is not the same as your high school graduation diploma.

Direct Loans - loans made by the U.S. Department of Education. Students and parents can receive Direct Loans only if the school participates in the Direct Loan Program.

doctoral degree - an advanced degree that generally takes at least three years after a bachelor's degree. The most common is the doctor of philosophy (PhD).

dual credit - courses that count for both high school and college credit. They can save time and money in pursuing a college degree.

E

expected family contribution (EFC) - what the federal government formula says your family should be able to pay toward yearly college costs. The EFC amount is based on financial aid information submitted on the Free Application for Federal Student Aid about your family's income and assets.

F

Federal Family Education Loan Program (FFELP) - the term for the federal loan program of Federal Stafford Loans provided by The Student Loan People^sm and other lenders and insured by agencies such as KHEAA.

Free Application for Federal Student Aid (FAFSA) - the need analysis form which must be completed by all students applying for federal and state student aid.

financial aid - money which can come from state and federal governments, schools, private organizations, associations, and companies to help pay the costs of a college education or technical training.

financial aid package - the total financial aid award received by a student. It may consist of several types of aid, including grants, scholarships, loans, work-study, and other aid. The student's financial need, availability of funds, school aid policies, and the number of students who need financial assistance all influence the financial aid package.

financial need - the amount of higher education expenses that a student's expected family contribution (EFC) falls short of paying. Financial need equals the cost of education minus the EFC.

G

graduate student - a student who has earned a bachelor's degree and is working toward a master's, doctoral, or professional degree.

grant - a financial aid award, usually based on financial need, to help pay the cost of higher education. A grant generally does not have to be repaid.

guarantor - a state or nonprofit private agency that administers the Federal Family Education Loan Program (FFELP) in each state. KHEAA is the guarantor for Kentucky.

I

institutional aid - various types of student financial assistance administered by the school.

interest - a charge for a loan, usually a percentage of the amount borrowed.

International Baccalaureate (IB) Program - a program that lets high school students study college-level subjects and receive advanced placement and/or credit upon entering college. The IB diploma program is a rigorous program that takes two years to complete. The IB certificate program offers the opportunity to take individual IB classes without earning an IB diploma.

K

Kentucky Higher Education Assistance Authority (KHEAA) - the state agency that helps students attend college by administering student financial aid programs, providing free college planning materials, and distributing financial aid information.

L

lender - the organization (school, bank, credit union, other financial institution, or the U.S. Department of Education) that makes a loan.

loan - money borrowed to help pay for college costs. Loans must be repaid with interest.

M

major - the primary field of study chosen by a college student.

master's degree - an advanced degree that generally takes at least a year after a bachelor's degree. The most common are the master of arts (MA) and master of science (MS).

minor - the secondary field of study chosen by a college student.

N

need analysis - a process used to determine how much students and their families can reasonably be expected to pay toward college expenses. Need analysis formulas are updated each year by the federal government and other organizations to reflect changes in the economy.

P

Perkins Loans - low-interest loans made under the Federal Perkins Loan Program to undergraduate and graduate students through your school. You repay the school or the agent the school hires to service the loan. These loans are made based on financial need.

PLUS Loans - loans made to parents to help pay college expenses.

postsecondary - a term that means "after high school." Postsecondary education can be received through study at a college, university, community college, technical college or trade school, on or off campus.

professional degree - an advanced degree in a field such as medicine, dentistry, law or pharmacy. They generally take at least six years to complete, including at least two years of college before students are admitted to the degree program.

promissory note - a binding legal contract between a loan holder and a borrower. The promissory note contains the loan terms and conditions, including how and when the loan must be repaid. By signing, the borrower agrees to repay the loan.

principal - the total sum of money borrowed. Loan principal includes the original amount borrowed plus any interest that has been added to the loan.

proprietary school - the proper term for what most people call a trade school.

R

repayment schedule - a statement the loan holder gives the borrower showing the amount borrowed, the monthly payment amount, and the date payments are due.

S

SAT I: Reasoning Test - a three-hour test typically taken as a junior or senior. The multiple-choice questions are divided into math and verbal sections. It is scored up to 800 for each section. Scores are used for admissions purposes and in awarding scholarships.

SAT II: Subject Tests - one-hour tests given in specific subjects such as mathematics, science, English, or foreign languages. More selective schools require two or three for freshman placement.

scholarship - a financial aid award to help pay for college. It does not have to be repaid and is generally based on skill, ability, talent, and/or achievement.

Stafford Loans - loans made to undergraduate and graduate students under the FFELP and Direct Loan program. Borrowers can receive FFEL or Direct Stafford Loans regardless of financial need. Interest rates vary but cannot exceed 8.25 percent.

Student Aid Report (SAR) - a document produced from information provided on the Free Application for Federal Student Aid (FAFSA) and sent to the student. The SAR reports the student's eligibility for aid and expected family contribution (EFC).

subsidized loan - a federal student loan based on financial need and other requirements.

T

trade schools - privately owned schools that provide a wide range of courses of study, such as cosmetology, business, and broadcasting. Programs range from 2 to 24 months and lead to certificates or diplomas in a variety of subjects. The preferred term is proprietary school.

transcript - an academic record that lists the courses taken, grades received, and credits or credit hours received.

tuition - the amount that schools charge for instruction and for the use of certain school facilities such as libraries.

U

undergraduate student - a college student who has not yet earned a degree.

unsubsidized loan - a federal student loan not based on financial need.

W

waiver - an arrangement under which a school does not charge specific costs if a student meets certain qualifications.

work-study - employment which lets students earn money to help pay the costs of higher education.