Throughout high school, the college application process, and life in general, you’ll need to know words that mean money. It’s important to understand terms that colleges use to describe how students pay money and how colleges pay students money.
The School Bell Blog has compiled a list of basic terms that mean money. Hopefully, students leave this post having a better idea of what to look for in programs, colleges, or universities that meet their financial needs.
General Terms Relating to Money
Income– the money you receive from work, investments, paychecks, etc.
Interest rate– a percentage of the money that a person borrows, that they have to pay on top of paying back all the money borrowed in the first place.
Revenue- income or money received indirectly by a person, company, or organization.
Example- If someone borrowed $30 from a bank and the bank charged a 2% interest rate, they would have to pay back the $30 plus $0.60, which would be the revenue.
Fund/Funding– the act of giving money to something you want to support.
Sponsor– the act of paying some/all the costs of an event in exchange for promoting your product/business.
Example- McDonald’s can sponsor the Olympics.
Fiscal– relating to finances; usually taxes.
Assets– property owned by a person or property that is agreed to have value.
Capital- wealth in the form of money/assets that a someone has available for investment.
Net Price- the total price that someone has to pay after taking away any discounts.
How Colleges Pay You
Financial Aid– money that colleges give to a student to help pay for college expenses.
Most of the time, colleges will just subtract this money from your bill. This means students never actually get this money. They just have to pay a smaller amount of money to the college.
Financial Aid Award Letter– the letter that a college/university sends to you with a breakdown of all the different forms of financial aid that are helping cover your costs.
Demonstrated Need– The amount of financial aid that a college has decided you need based on your family’s income.
For example, if your family’s income is below $65,ooo a year, many universities have determined that your family shows a 100% demonstrated need which means the college will create a financial aid package that covers most of the costs for attending.
Always check the financial aid policies for schools you are interested in applying to. Many times, it can be more affordable than you think.
The common phrase used is “financial aid package” which includes all of the following types of financial aid:
- Scholarships– Money given to students that does not need to be paid back.
- Need-based scholarships– scholarships only given to students based on need.
- Merit-based scholarships– scholarships given to students for academic achievements, talents, essay competitions, or test scores.
- Loans– money that is borrowed and expected to be paid back with an interest rate.
- Unsubsidized loans– has an interest rate that increases over time (you have to pay more money over time).
- Subsidized loans– has an interest rate that stays the same over time.
- Direct PLUS loans- federal loans usually taken out by parents or graduate students (usually have high interest rates).
Grant– Money given to students that does not need to be paid back.
Expected Family Contribution- the total amount of money a college has decided your family will pay every year.
Student Contribution- the total amount of money a college has decided you will pay every year by getting a job or earning scholarships.
On-campus job– jobs for students can work in their college to pay their student contribution. On-campus jobs usually included make up a portion of the financial aid award letter.
How Colleges Charge You Money
Direct Costs- the typical costs that are considered when going to college. These are paid directly to a college.
Indirect Costs- other costs that may arise as a result of attending college. These are not always paid directly to a college.
Example: An indirect cost might be winter clothing if you are attending college in a colder region.
Tuition– the cost of taking classes at a college.
Room– the cost of living in a college dorm.
Meal Plan– a system for students to pay meals they eat in college.
Board– the cost of a student’s meal plan while living in the college.
Work-Study- a program that allows students to work part-time, usually in an on-campus job, to help pay for college.
Application fee- a sum of money that students pay to have their application to a school processed.
Make sure to check the cost of application fees for the colleges you want to apply to. Many colleges will “waive” the fee (make the application free) for students who are low-income.
Books & Travel- the cost of textbooks for class and traveling to campus might not always be accounted for in the bill sent from a college.
Cost of attendance– the total cost of attending a college including tuition, room, and board.
Net Cost of Attendance- the net amount of money a college expects you and your family to contribute through the “expected family contribution” and “work-study“.
Applications for Financial Aid
Pell Grant- A financial aid program from the federal government for students with financial need.
Florida Bright Futures- a scholarship program for residents of Florida.
FAFSA- free application for federal student aid.
Perkins loans- Federal loans with low interest rates that are specifically for low-income students.
CSS Profile- the College Scholarship Service Profile used to apply for financial aid from colleges.
Key Words to Look For
Stipend– A sum of money given to a student to help pay for expenses.
When searching for summer programs, internships, or other programs, look to see if a stipend is offered to help pay for transportation or food.
Endowment– the amount of money a university has access to in their budget.
It is convenient to look for colleges with large endowments because they will have more access to funds for financial aid, research, study abroad opportunities, or general emergency expenses that you might have.
Need-Aware Admission- A college who does consider a student’s financial status before admitting them.
Need-Blind Admission- A college who does not consider a student’s financial status before admitting them.
Keep in mind that neither system is perfect. Some colleges that are “need-aware” end up rejecting students because they cannot afford to pay for their financial aid. Some colleges that are “need-blind” end up giving financial aid award letters with large “expected family contributions” and “work-study charges“.
First-generation college student– Students who’s parents have not completed a four-year college degree. This means you and your siblings are the first in the family to graduate from a college.
If your parent received a degree outside of the U.S., you may or may not be considered a first-generation student depending on the college you ask.
Application Fee– an amount of money you have to pay to apply to something. Most colleges make you pay an application fee, but if you are a low-income student, these will many times be waived and you do not have to pay them.
Low-income students– Typically students who are eligible for free or reduced lunch and earn a household income of $40,000 a year or less.
Non-profit/ not-for-profit colleges – Public schools who are part of the state and do not make extra profit from students paying tuition.
For-profit colleges– private schools who are not part of the state and do make extra profit.
The School Bell Blog hopes this post gives students a better idea of how to make sure college is affordable!
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*The School Bell Blog is not associated with programs mentioned. This blog serves as a resource of information that may or may not apply to the readers and it is up to each individual reader to verify the information on their own. For verification on what opportunities are available to you and for formal help, please see your school counselors. The School Bell Blog encourages everyone to do their own research before taking the information stated here as fact. Thank you.
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