Financial Aid Glossary

Here you will find a list of common financial aid terms organized alphabetically. If you have questions regarding any of the definitions listed below, our team is here to help. Email [email protected] for more information.

Definitions listed below include:

Award Year
An award year is generally a 12-month period that runs from July 1 to June 30 (e.g., Fall, Spring, and Summer terms) of the following year. It’s different from a calendar year, which runs from January to December. When you submit a Free Application for Federal Student Aid (FAFSA®) form, you’ll select the award year you’re planning to attend school.

Cost of Attendance (COA)
Cost of attendance refers to the total cost for a student to attend a specific school. It includes expenses such as tuition, fees, books, school supplies, food, and housing.
Your cost of attendance is not the price you’ll actually pay to attend a school. That amount is known as the net price.

Dependent Student
A student is considered dependent on the Free Application for Federal Student Aid (FAFSA®) form if they do not meet the criteria for an independent student.
Dependent students must report both their own information and their parents’ information on the FAFSA form. In most cases, a parent will be identified as a required contributor.

Entrance Counseling
Entrance counseling is required for first-time federal student loan borrowers before receiving Direct Loan funds. It explains borrower rights and responsibilities, as well as loan terms and conditions. Entrance counseling is completed through StudentAid.gov.

Exit Counseling
Exit counseling is required when a student with federal loans graduates, leaves school, or drops below half-time enrollment. It provides important information about repayment, loan terms, and available repayment plans. Exit counseling is completed through StudentAid.gov.

FAFSA Submission Summary
The FAFSA Submission Summary is an electronic or paper document that summarizes the information you reported on your Free Application for Federal Student Aid (FAFSA®) form. It may also include your estimated eligibility for a Federal Pell Grant and federal student loans, your Student Aid Index (SAI), and whether you’ve been selected for verification.
Once your FAFSA form is submitted and processed, you’ll receive an email with instructions on how to access an online copy of your FAFSA Submission Summary.
Remember: Your FAFSA Submission Summary is not your financial aid offer.

Federal Verification
Federal verification is the process used to confirm the accuracy of information provided on the FAFSA. To complete verification, students may be required to submit additional documentation to Clarkson College for review.

Financial Aid Offer
A financial aid offer (sometimes called an award letter) tells you what aid you can receive at a particular college, career school, or trade school. It includes the types and amounts of federal, state, private, and school aid you’re being offered, such as grants, scholarships, Federal Work-Study funds, and loans. This combination of aid is your financial aid package.

Independent Student
A student is considered independent on the Free Application for Federal Student Aid (FAFSA®) form if they meet one or more of the following criteria:

  • 24 years old or older by January 1 of the academic year
  • Married (and not separated)
  • Graduate or professional student
  • Veteran
  • Member of the U.S. armed forces
  • Orphan
  • Ward of the court
  • Current or former foster youth
  • In a legal guardianship (now or in the past)
  • Has legal dependents other than a spouse
  • Emancipated minor
  • Unaccompanied and homeless or at risk of becoming homeless (with proper determination)

Independent students report only their own information (and a spouse’s information, if applicable) on the FAFSA form.

Interest Capitalization
Interest capitalization occurs when unpaid interest is added to a loan’s principal balance. This increases the total loan cost and may result in higher monthly payments, because future interest accrues on a larger principal amount.

Loan Limits
Federal student loans have limits on how much you can borrow. These limits vary based on your dependency status, grade level, and whether you are an undergraduate, graduate, professional student, or parent borrower.

Master Promissory Note (MPN)
A Master Promissory Note (MPN) is a legal document you must sign before receiving funds from a Direct Loan. An MPN can cover multiple loans for up to 10 years and represents your promise to repay all borrowed funds, interest, and fees.
The MPN also outlines borrower rights and responsibilities, including loan cancellation timelines.

Net Price
Net price (sometimes called net cost) is an estimate of the amount a student must pay out of pocket each year to attend a school after financial aid is applied.

Origination Fee
An origination fee is a percentage of your total loan amount charged for processing a Direct Loan. This fee is deducted from the loan amount before funds are disbursed.

Out-of-Pocket Cost
Out-of-pocket costs are expenses a student must pay directly each year. These include remaining tuition, fees, and living or educational expenses after scholarships, grants, and accepted loans are applied.

Student Aid Index (SAI)
The Student Aid Index (SAI) is a number calculated using the information provided on your Free Application for Federal Student Aid (FAFSA®) form. It is not the amount of money you or your family will have to pay for school. Financial aid offices determine your financial need by subtracting your SAI from your cost of attendance.

Satisfactory Academic Progress (SAP)
Satisfactory academic progress (SAP) is the standard schools use to determine whether a student is successfully completing coursework toward a degree or certificate while remaining eligible for financial aid.
Additional details are available on the Policies | Clarkson College page.

Types of Financial Aid
Clarkson College offers many financial aid options, and the majority of students qualify for some form of assistance. For more information, visit Types of Financial Aid | Clarkson College.

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