accelerated program A degree program that fits the class requirements for a college degree into a shortened period of time.

active-duty Military personnel who serve on a full-time basis, even if not during a time of war or in combat.

Advanced Placement Classes that can be taken during high school that can allow a student to skip certain general education courses later at the college level.

asynchronous learning A classroom environment, usually online, that allows the student and the instructor to communicate with one another at different times.

blanket insurance See group insurance.

board Most commonly refers to the costs associated with feeding a student while enrolled at a college campus, usually through the school’s cafeteria or dining facilities.

branches Refers to the various arms of the U.S. military and includes the Army, Navy, Air Force, Marines, and Coast Guard.

challenge program A program set up and run by a state, local community, or private corporation that offers to pay for some or all of the college expenses of all students who meet certain basic criteria. Such criteria might include residing in a certain area for a minimum amount of time, maintaining a minimum GPA, or attending a school within that state.

College Level Examination Program (CLEP) Tests offered by the College Board that allow successful examinees to skip certain classes.

community college An accredited school that offers college courses that can either be transferred to a four-year college or to a two-year degree known as an associate’s degree.

consolidation The process of combining all of a graduate’s federal loans into a single loan.

contribution rate In financial aid terms, this refers to the amount of an asset’s worth that a parent or student is expected to use each year for funding their education.

Coverdell ESA A special type of college savings account that allows a parent to save for a child’s college education, paying no tax on the growth of the savings if it’s eventually used for college costs.

Crummey trust A rarely used type of education trust fund that has been replaced by newer and simpler college savings vehicles.

CSS Profile A financial aid form used by many private colleges, in addition to the FAFSA form.

custodial account See UTMA and UGMA accounts.

DANTES A test that allows military personnel to receive partial college credit for their training and experience.

default When a student has failed to make his required payments on a student loan and the loan has been turned over to a collections department.

deferment A temporary suspension of loan payments under guidelines usually set by the government.

dependent student A student who, for financial aid purposes, is still considered part of her parent’s household.

direct costs The costs directly related to attending school—namely tuition, room, board, and books.

expected family contribution (EFC) A calculation from the FAFSA forms that determines the dollar amount that a family is expected to contribute in the current school year toward their child’s education. Financial aid is awarded based on this amount.

FAFSA See Free Application for Federal Student Aid.

FDIC insurance Provides a guarantee to depositors at participating banks that their deposits are protected even if the bank goes out of business.

Federal Methodology The formula used to calculate the expected family contribution for a student for federal financial aid purposes using information from the FAFSA form.

financial aid administrator The person(s) at a college who is in charge of determining what financial aid is awarded to which students.

fixed-income investment An investment whose return comes primarily from a preset rate of interest earned.

forbearance A suspension or waiving of loan payments due, usually granted on a case-by-case basis by each lender.

forgivable loans A type of student loan made to a student who intends to work in a certain field. If the student does in fact work in that field for a certain amount of time, then the loans are forgiven (erased). The primary difference between these loans and classic loan forgiveness programs is that these are unique loans made by state and local governments (as opposed to the U.S. Department of Education), with forgiveness promised in advance of graduation.

Free Application for Federal Student Aid (FAFSA) The primary form used by the U.S. Department of Education for all students seeking governmental financial aid.

GI Bill Military program that pays for a current or former soldier to receive a college education in return for a specified number of years of service.

grant A type of financial award that is typically made from a government or state program and that does not need to be repaid if the student successfully completes the courses for which the grant money was used.

group insurance An insurance policy that covers everyone who meets a certain classification or for everyone who is exposed to the same risk (for instance, physical injury).

half-time A student’s status, determined by each school, most often someone taking fewer than 12 semester hours per year.

income timing The deliberate choosing of one tax year over another to receive income in, in order to lower one’s potential expected family contribution.

independent student A student who, for financial aid purposes, is considered financially separate from his parents.

indirect costs Those costs incurred due to attending college but not directly related to the receipt of the education itself, such as travel, medical costs, and clothing.

inflation The increase in the cost of a good or service over time.

Institutional Methodology A formula used for private aid given by schools using information on the CSS Profile.

International Baccalaureate Classes that can be taken during high school that might allow a student to skip certain general education courses at the college level.

junior college See community college.

loan forgiveness programs Government programs that forgive (erase) outstanding loans in return for working in certain fields.

loan repayment programs Government or private programs that repay outstanding loans in return for working in certain fields.

National Merit Scholarship Finalist One of approximately 15,000 students who demonstrate exceptional academic ability on the PSAT exam taken by high school students. With this title comes many offers for free or discounted educations around the country.

need based Financial aid that is awarded based on someone proving that her income and asset levels are below a certain benchmark.

nontraditional college A school that focuses primarily on educating students through an alternative format.

nontraditional education An education received in some manner other than attending face-to-face classes on a full-time basis.

nontraditional student Someone who attends a nontraditional school or receives a nontraditional education.

opportunity costs The value of those things you give up when you choose one option over another. For example, the opportunity cost of choosing one job over another is the salary and benefits you won’t be getting at the job you did not take.

origination fee A fee charged at the time a new loan is issued, expressed in a percentage such as a “1% origination fee.”

peer-to-peer lending (P2P) Loans made between private parties, as opposed to those made between a business or the government and a borrower.

Pell Grant A financial aid award made by the federal government to students who demonstrate financial need when compared to their cost of attendance at the school of their choice. Pell Grants do not need to be repaid if the student successfully completes his or her education.

Perkins loan A low-cost federal loan made to students demonstrating substantial financial need. Interest on Perkins loans is subsidized (paid for) during college by the government, with these loans also being subject to unique loan forgiveness programs for graduates choosing certain careers.

phase-out Refers to tax benefits that are slowly decreased for a taxpayer after his income exceeds a certain amount.

principal The original amount someone invests in an investment.

private student loans A student loan issued by a corporation or bank without government backing or partnership and often subject to higher interest rates.

reservist Part-time military personnel who serve on a limited basis each year but can be called up to active-duty (full-time) during times of war or crisis.

return on degree A financial measure of how much someone earns for a degree from a specific school compared to what she paid to acquire it.

return on major A financial measure of how much someone earns for a degree in a certain subject area compared to what he paid to acquire it.

room The costs related to putting a roof over a student’s head, whether on or off campus.

scholarship A financial aid award made to a student, usually from a private organization or college, that does not need to be repaid.

Section 529 account A special type of college savings account that allows a parent to save for a child’s college education, paying no tax on the growth of the savings if it’s eventually used for college costs.

Stafford loan The most commonly used federal student loan, since it is available to students who demonstrate financial need, as well as many from middle- and upper-class families. Stafford loans are available to both undergraduate and graduate students and may be eligible for certain loan forgiveness programs.

subsidized loan A type of student loan on which all the interest is paid by the government until the student graduates.

tax credit A tax benefit that directly reduces the amount of taxes someone owes on a dollar-for-dollar basis.

tax deduction A tax benefit that lowers the amount of income on which someone’s tax liability is calculated.

tax-equivalent yield (TEY) A calculation that shows what a fully taxable bond would have to earn to have the same after-tax yield as a bond that is not taxed by either the federal or state government.

term life insurance Life insurance that covers someone for only a specified number of years; it’s much cheaper than whole life insurance.

total cost of attendance An estimate provided by a school of the total annual expense of attending that school, including all the direct and indirect costs.

tuition The direct costs for the education received, usually expressed in a per-unit or per-semester format.

tuition reimbursement An employer-sponsored plan where an employee receives financial assistance in earning his degree. Some programs require the employee to pay his costs and then submit a request for reimbursement, while others simply pay the employee’s tuition and expenses.

tuition reward programs Programs that set aside money into a separate account for future students every time a participating parent uses a credit or debit card or shops at a participating retailer.

tuition waiver When a college waives tuition for a certain class of students, such as National Merit Scholarship Finalists or people with incomes below a certain dollar amount.

tuition-free college A college at which all students in attendance receive a free education (as opposed to just certain students receiving scholarships), usually in exchange for a commitment to work at the college as they earn their degree. After being accepted to a tuition-free college, a student can rest assured that the majority of her education expenses will be paid for as long as she meets the school’s academic standards.

unsubsidized loan A type of student loan on which interest accumulates even prior to a student’s graduation.

UTMA and UGMA accounts Increasingly outdated accounts that allow parents to make an irrevocable gift to a child of cash or other assets, with the income on those assets receiving preferential tax treatment.

vocational school A specialized type of school that trains students for the skills required to work in certain skilled-labor professions.

whole life insurance Life insurance that has a built-in savings component that is occasionally recommended as a college savings vehicle; it’s much more expensive than term life insurance.

work-study A specialized type of financial aid that provides certain students with money to pay their living expenses by providing jobs.