Financial Aid Terms You Should Know
Award letter: Your award letter basically outlines your financial aid package and will be posted on my.nmsu.edu. Click here for instructions on how to get your award letter.
Expected Family Contribution (EFC): This is the measure of your family’s financial strength, and how much of your college costs it should plan to cover. This is calculated based on a specific formula, which considers taxed and untaxed income, assets, and benefits, as well as the size of your family and the number of family members attending college during the year. Your expected family contribution is calculated based on your FAFSA results. Click here for the EFC Formula.
FAFSA (Free Application for Federal Student Aid): You’ve probably heard of the FAFSA, but do you know what it is and just how important it can be for you and your family? Filling out the FAFSA is one of the first steps in the financial aid process, and determines the amount that you or your family will be contributing to your postsecondary education. The results of the FAFSA determine student grants, work-study, and loan amounts. We recommend that everyone fills out the FAFSA; it only takes about an hour to complete, and you may be surprised with the results. Click here to start your FAFSA now.
Federal Student Aid: The largest form of student aid in the country, federal aid programs come in the form of government grants, loans, and work-study assistance and are available to students at eligible post-secondary institutions (colleges, vocational schools, and graduate schools). Click here to learn more about federal student aid.
Financial Need: This is the amount of a student’s total cost of attendance that is not covered by the expected family contribution or outside grants and scholarships. A student must demonstrate financial need to be eligible for need-based financial assistance programs. For more information on financial need click here.
Grants: Did someone say free money? Unlike loans, grants—which can come from the state or federal government, from the college itself, or from private sources—provide money for college that doesn’t have to be paid back. Many grants determine eligibility by looking at your FAFSA results. For more information on grants click here.
Loans: If scholarships and grants don’t cover the entire cost of your tuition, you may have to take out a student loan to make up the difference. Some federal student loans don’t have to be paid while you are in college, and there are also a variety of loan forgiveness programs out there post-graduation. NOTE: you are responsible for repaying your student loans even if you file for bankruptcy. For more information on student loans please attend one of DACC’s In-Person Entrance Counseling Sessions Click here to sign up.
Room and Board: Everyone needs to sleep and eat. If you plan to do it on campus, those fees are part of your total cost of attendance. For more information about room and board options at NMSU/DACC click here.
Scholarships: There really isn’t much difference between a scholarship and a grant, though the general consensus is that scholarships are primarily awarded for academic merit (good grades) or for something you have accomplished (volunteer work or a specific project); however, there are many need-based scholarships out there. Similar to grants, scholarships don’t have to be repaid. For more information on scholarships click here.
Tuition: College tuition is the “sticker price” of your education, and does not include room and board, textbooks, or other fees. Colleges often calculate tuition based on the cost of one credit, or “unit.” For example, a college may charge $350 per credit for an undergraduate class. Many times colleges will simplify this by providing a flat fee for tuition; you’re often required to take a minimum amount of credits and cannot exceed a maximum amount of credits. “True cost” is a little misleading, since there are other costs on top of tuition. For more information about Tuition and Fees click here.
Tuition reimbursement: Tuition reimbursement, also sometimes called “tuition assistance,” is increasing in popularity. Some employers will refund you the cost of your tuition if you’re studying a work-related area. Tuition reimbursement can cover as little as one or two courses, or can cover up to the entire cost of your education. For more information about Tuition Reimbursement click here.
Workstudy/Work award: The Federal Work Study program provides funds to eligible students (see FAFSA above) for part-time employment to help finance the costs of post-secondary education. In most cases, the school or employer has to pay up to 50 percent of the student’s wages, with the federal government covering the rest. You could be employed by the college itself; or by a federal, state, or local public agency; a private nonprofit organization or a private for-profit organization. For more information on DACC work study opportunities click here.
Federal Student Aid Glossary
U.S. News by Scholarship America