Glossary of Frequently Used Financial Aid Terms
Understanding the following terms will help you easily navigate the federal financial aid process. Reference this list as you plan your funding for each term or when reviewing important aid documents.
Academic Year—Walden’s financial aid academic year is defined as three consecutive quarters or semesters.
Aggregate Level—This is the maximum loan amount set by the federal government that students can receive over their entire academic career. Students can review their outstanding loan balances from Walden and any prior schools on the National Student Loan Data System (NSLDS).
Annual Award Year—The annual award year begins when the student begins classes (see Overlapping Loans for exceptions) and continues for three consecutive semesters or quarters. For example, the award year for a student on the quarter calendar that begins in winter would include winter, spring, and summer quarters. A second award year would include fall, winter, and spring quarters. Award years continue on a rolling basis until a program is completed. However, federal grant programs must follow a set award year that runs from July 1 to June 30.
Annual Limit—The maximum amount of federal financial aid that a student can receive in an academic year. Annual limits differ by federal aid program.
Award/Financial Aid Award—A school’s official determination of a student’s federal loan and grant amounts for the award year. Awards can include loans that must be repaid or grants that generally are not repaid.B
Book Advance—A process that allows students who need assistance with the cost of books to receive an early payment of up to $500 against their future financial aid refund. Book advance processing begins no earlier than four weeks before the term begins.C
Cost of Attendance (COA)—The estimated combined cost for tuition, fees, books and supplies, living allowance, and loan fees for a particular program within an award year. A financial aid award cannot exceed the student’s cost of attendance.D
Disbursement—A disbursement occurs when the government sends federal loans and grants to the school to pay a student’s bill (tuition, fees, and book advance). If the disbursed amount is greater than the student’s billed amount, a refund is created. The school sends the refund to the student by the student’s selected payment method within 14 days following disbursement.
Drop—The process of dropping a course anytime before the start or within the first seven days of a course without any tuition charges and without it appearing on your transcript.E
Eligibility—Eligibility for loans and grants can stop or change depending on many different factors. There are three broad categories of eligibility rules:
Expected Family Contribution (EFC)—The amount of money that a student is expected to contribute toward his or her education according to the federal FAFSA results. The EFC is used to determine if undergraduate students qualify for need-based Pell Grants or federal subsidized loans.F
FAFSA PIN—The electronic signature that students use to complete their FAFSA. The PIN is unique to each student. Students can obtain a PIN and access other federal student aid websites at www.pin.ed.gov.
Federal Financial Aid Programs—These programs include the federally funded grants and loans awarded to students to pay for their education. The government funds are sent directly to the school on behalf of the student for bill payment and refund processing. Federal financial aid programs are highly regulated with strict rules set by the U.S. Department of Education, but there may be differences in how schools administer the programs. We strongly recommend that you familiarize yourself with Walden’s federal financial aid terms and conditions and contact the Office of Financial Aid anytime you want to make an enrollment or program change.
Federal Pell Grant—A federal need-based grant for undergraduate students who demonstrate exceptional financial need. The amount of eligibility is determined by need in accordance with a student’s expected family contribution (EFC).
Federal Perkins Loan—Walden does not participate in this loan program.
Federal Supplemental Educational Opportunity Grant (FSEOG)—A grant for undergraduate students with exceptional financial need. These grants are very limited and are awarded to students on a first-come, first-served basis.
Federal Direct Loans—
Financial Need—The difference between the cost of attendance (COA) and expected family contribution (EFC). The amount is used to determine the student’s eligibility for need-based aid. For example, if the COA is $30,000 and the EFC is $10,000, then the financial need amount is $20,000.
Free Application for Federal Student Aid (FAFSA)—All students who wish to receive federal financial assistance for college must complete the application and send it to the institution(s) they will attend. Students can complete the online FAFSA at www.fafsa.ed.gov.L
Leave of Absence (LOA)—A student who requests to take a break from school without having to withdraw from the university applies for a leave of absence. Students must apply for a leave of absence, not to exceed six months, through Walden’s Office of Academic Advising. For federal financial aid purposes, an LOA is considered the same as a drop or withdrawal, and federal loans and grants may have to be returned to federal programs, with students owing a tuition balance to Walden (see Return of Title IV Funds). When a student loan borrower begins a leave of absence, the student must begin repaying outstanding student loans.
Loan Period—The period assigned to a Direct Loan is typically the same as the three-term annual award year that includes three disbursements—one for each term. However, in instances of an overlapping loan, a loan period can be one or two terms and, therefore, may not directly match the annual award year.O
Origination—A school-initiated electronic process that “registers” data about each Direct Loan—such as amount, loan period, and disbursement dates—with the U.S. Department of Education. Once the school determines a student’s award amount and all additional steps are completed, the school originates the loan with the U.S. Department of Education’s system—Common Origination and Disbursement (COD). The department communicates to Walden if the loan has been accepted or rejected in the COD system. Once it is accepted by COD, the loan record moves to the disbursement stage. Generally, Walden will originate a student loan at least one week before the loan period begins.
Overlapping Financial Aid—Federal regulations require schools to monitor annual award year rules when the student changes schools or programs. When a student receives financial aid at one school and then attends another school during the same annual award year, the new school must adjust the financial aid amount to ensure that a student is not awarded beyond their eligibility. This can also happen if a Walden student changes from a semester-based program to a quarter-based program.P
Participation—Student participation is the engagement of a student within his or her academic courses. A predetermined level of participation is required to receive a federal aid disbursement. Students who stop participating during the term may have to return funds to the federal programs and might owe a tuition balance to Walden (see Return of Title IV Funds).R
Refund—Once financial aid is disbursed to the Walden student account to pay for tuition, fees, and book advance (if any), any remaining financial aid is sent to the student as a refund. This process has two steps:
Renewal—Financial aid is awarded for another award year using the same FAFSA that was used for the prior award year. Not all students are eligible for renewal and may be required to complete a new FAFSA for every new award year.
Return of Title IV Funds (R2T4)—Federal regulations require Walden’s Office of Financial Aid to apply a formula established by the U.S. Department of Education called Return of Title IV Funds (R2T4) to determine the amount of federal financial aid a student has earned as of the student’s official or unofficial withdrawal date. The amount of federal financial aid returned to federal aid programs is determined by the amount of time a student spends in an academically related activity (see Participation). Students must have continued academic participation for 60.1% of the term in order to earn 100% of the federal financial aid disbursed to them.S
Satisfactory Academic Progress (SAP)—A federal requirement to maintain a set of minimum academic progress standards in order to be eligible for federal financial aid. These standards are separate and distinct from Walden’s academic progress standards. Regardless of a student’s academic standing with Walden, if a student does not meet federal SAP standards, they could lose eligibility for financial aid. There are three academic progress standards for SAP:
Undergraduate Adequate Academic Progress (UAAP)—A Walden policy for undergraduate students in the first term of their academic program. Students are required to earn a D or better after the first two weeks of their foundations course (COMM 1001 or WALD 1001) for their program. If they do not have a D grade average or higher after two weeks in the course, they will be administratively withdrawn from the university.
Unusual Enrollment History (UEH)—The Unusual Enrollment History regulation is new for the 2013–2014 FAFSA year. The U.S. Department of Education started this process to determine if Pell Grant recipients are properly using funds, to prevent fraud and abuse in the Pell Grant program. This will help ensure that students are using federal aid to fund their education at Walden.V
Verification—A school may ask a student to confirm the information reported on the FAFSA. To verify that the student provided correct information, the school may ask for financial information such as an IRS Tax Return Transcript, along with additional information. The U.S. Department of Education selects students randomly for the verification process and notifies students who have been selected via their student aid report.W
Withdrawal—This occurs when a student withdraws from a course following the seventh day of the course start or when a student officially leaves the university. The course withdrawal is noted on the transcript, and the student will be charged tuition for the course. In addition, federal funds may have to be returned to federal programs, which would result in the student owing a balance to Walden (see Return of Title IV Funds), depending on the date of withdrawal.