Glossary of Financial Aid Terms

The following definitions should help you as you make your financial plan for your IBC education investment. For one-on-one help, contact your Admissions Representative or financial aid analyst.

A 

APR – Annual Percentage Rate: The total cost of a loan, including interest rate and fees, expressed as a percentage of the original borrowed amount paid out every year for the life of the loan.

Accrue: To add up. If you obtain loans, the interest will add up, or accrue, over the life of the loan. That determines the total that you pay back to the lending institution.

Alternative Loan: This is a loan that comes from a private institution, such as a bank, rather than the federal education loan program. Can also be called a private loan.

Army College Fund: A program that provides educational benefits to Army enlistees in certain jobs who earn a minimum score on the Armed Forces Vocational Aptitude Battery.

Army Reserve Student Loan Repayment Program: A loan repayment program available to people in the Army Reserves.

Assets: Cash available in checking and savings accounts, income-producing property, and business equipment and inventory. Part of the formula for considering Expected Family Contribution (EFC).

B

Bailey Family Foundation’s College Scholarship: An award given to one IBC student each year based on GPA and financial need.

C

COA – Cost of Attendance: For an IBC student, it can include tuition, fees, books, supplies, transportation, loan fees, dependent care, purchase or rental of a computer and other miscellaneous expenses. COA is used to determine a student’s need for borrowing money or getting need-based financial aid.

Capitalization: Adding unpaid interest to the total debt of a loan. See also accrue.

Charles Cring Adult Learner Award: A scholarship given by IBC each year in honor of the founder of the school. Recipients must be first-time, full-time students.

Cosigner: A person who signs his or her name to a student’s loan who agrees to pay the debt if the student cannot.

Credit: A summary of a person’s financial strength, often used to determine if he or she can obtain private loans. It includes a person’s history of paying bills on time and ability to pay back loans.

D

Default: Failure to pay back a loan.

Deferment: Delay or postponement. Loans may be deferred, or not paid back, for a period of up to three years if the debtor loses his or her job, goes back to school, or serves in the Peace Corps or as a soldier in a war. Interest may still accrue.

Dependent: A person who relies on others for financial support. In terms of financial aid, a student is a dependent if he or she is under 24, unmarried, not a veteran, not a parent or responsible for a child, and not declared by a court to be independent.

E

EFC – Expected Family Contribution: This is determined when you fill out the FAFSA and forecasts what your family should be able to contribute toward your education investment.

F

FAFSA – Free Application for Federal Student Aid: The application that everyone must fill out before being considered for any type of financial aid. It can be filled out online and an IBC financial aid analyst can help you through the process. It must be completed by March 10 to qualify for state aid. There is not a deadline for federal aid. To complete it you need your Social Security Number and last year’s tax forms.

FSEOG – Federal Supplemental Educational Opportunity Grant: A program for students who demonstrate exceptional financial need.

Federal PLUS Loans: For parents of dependent students who wish to borrow funds to help pay for their children's education.

Financial Aid: Refers to any assistance given in the form of money for educational expenses. The five main types for IBC students are grants and loans, scholarships, work-study jobs, employer tuition reimbursement, and veteran or military assistance.

G

GPA – Grade Point Average: A number that reflects a student’s grades and must be kept at a certain level for some scholarships to be given or to be renewed.

Grant: Free money. Many grants are need-based and come from the federal government to help with tuition. Grants do not have to be repaid.

I

Income: The amount of money received from any combination of wages, interest, dividends, sales, rental, business or farm profits, some welfare program, Social Security benefits and child support.

Independent: Someone who does not rely on someone else for money. You are independent during an academic year if you are/were at least one of the following: over 24 years old, married, supporting children, orphan or ward of the court, a soldier or a veteran.

Interest: The fee paid on a loan. It adds up over the life of a loan based on a percentage of the borrowed amount.

L

Lender: A person or organization that loans money.

Loan: Money that is borrowed and must be repaid.

M

Merit-Based Aid: Scholarships given based on academic or other talent-based qualifications.

N

Named Scholarship: A financial award named after someone who left the money or was honored for some other reason. IBC awards two named scholarships each year: Charles Cring Adult Learner Award and Bailey Family Foundation’s College Scholarship.

Need: The difference between how much a student is expected to pay and the cost of going to school. This must be figured to determine what financial aid is available. The formula is COA – EFC = Need.

Need-Based Aid: Grants, loans, work-study jobs and scholarships that are given based on the financial need of a student.

O

Out-of-Pocket Expenses: The amount that a student must pay on his or her own.

P

Pell Grant: A need-based federal grant that is given to financially needy college students. You must fill out the FAFSA to determine if you qualify for a Pell grant.

President’s Scholarship: A financial award given each year to a student enrolled in the Chef’s Academy.

Principal: In financial aid, the amount of money borrowed through a loan. Interest is added to the principal.

Private Loan: A loan that comes from a private institution, such as a bank, rather than the federal education loan program. Can also be called an alternative loan.

S

SAR – Student Aid Report: Provided by the federal government after you fill out the FAFSA. It reports how much the government believes a family can afford to pay for college.

Scholarship: Money awarded to students to help pay for education expenses.

Self-Help: Financial aid, such as loans and work study, that must be repaid or earned.

Sallie Mae Signature Loan Program: After exhausting sources of free money (such as scholarships and grants) and applying for federal student loans, you may still need extra funds to cover your education costs. That’s when you should consider the Signature Student Loan—America’s most popular private student loan and an excellent source of gap financing.

The Signature Student Loan offers several advantages:

• Competitive pricing that rewards creditworthiness
• Zero disbursement and repayment fees – save money up front and over the long term
• 0.50 percentage point interest rate reduction for automatic debit*
• No minimum income requirement and no payments required while in school*
• Applying with a creditworthy cosigner may help applicants qualify
• Cosigner release option available after the first 24 consecutive on-time payments of principal and interest*

*Learn how to earn these benefits

Stafford Loan: A loan made to college students. The interest will be paid on the loan while the student is enrolled at least half time depending upon the student’s financial need. For students without need, the interest accrues while he or she is attending school.

T

Textbooks: The materials used in class. It’s important to include these fees in your financial planning.

Tuition: The charge for taking classes at a school.

W

Work Study: A federally subsidized program that allows a student to earn money in a job, either on- or off-campus, to help cover education expenses. Eligibility is based on need.