Before you sign on the dotted line, know what these financial-aid terms mean. By Jane Bennett Clark, Senior Editor May 13, 2010 Free Application for Federal Student Aid (FAFSA). The application that determines financial need and provides access to federal grants and loans, state grants and other financial aid.Academic Competitiveness Grant (ACG, federal). Up to $750 for first-year undergraduates and up to $1,300 for second-year undergraduates who qualify for the need-based Pell Grant. Students must be enrolled at least half-time and have completed a rigorous high school program or achieved at least a 3.0 grade-point average by the end of the first year of college. This grant program ends after the 2010-11 academic year. Sponsored Content College grant or scholarship. Free money offered by the school to meet the student’s need, reward merit or both. College loan. Offered by the college itself or through an arrangement with a bank. Some colleges offer loans that mimic federal loans, with fixed rates, subsidies on interest and in-school deferments. Other college loans are less generous. Advertisement Cost of Attendance (COA). The total cost of attending a particular college, including tuition and mandatory fees, room and board, books and supplies, transportation, and personal and miscellaneous expenses. Some schools omit certain costs, such as transportation and personal expenses, from the total, resulting in a lower estimate of need. CSS Profile. The financial-aid application, devised by the College Board, that many private colleges use to determine eligibility for institutional financial aid. Expected Family Contribution (EFC). The amount parents and their student are expected to pay toward the college bills. Most schools rely on a formula based on information from the Free Application for Federal Student Aid (FAFSA), but some colleges use another application, called the CSS Profile, and a different formula, called the institutional methodology, to calculate the amount. Federal Supplemental Educational Opportunity Grant (FSEOG). For students with high need, up to $4,000, at participating schools. The financial-aid office decides how to divvy up these funds, which are finite. Apply early or you may lose out. Advertisement Federal Work-Study. An on-campus or off-campus job paying at least federal minimum wage. Income does not count against next year’s financial aid. Grad PLUS loan. Up to the cost of attendance minus financial aid. As of July 1, 2010, available only through the federal Direct PLUS program, at a fixed rate of 7.9%. Students can defer repayment while they are still in school; no grace period. Basic credit check required. National Science and Mathematics Access to Retain Talent (SMART) Grant. Up to $4,000 for third- or fourth-year students who are eligible for the need-based Pell Grant. You must be enrolled at least half-time and majoring in certain subjects, with a 3.0 cumulative grade-point average. This grant program ends after the 2010–11 academic year. Parent PLUS loan. Up to the cost of attendance minus financial aid. As of July 1, 2010, available only through the federal Direct PLUS program, at a fixed rate of 7.9%. Parents can apply for deferment while the student is still in school and for six months after graduation. Basic credit check required. Advertisement Pell Grant (federal). For students with high need, up to $5,500 in 2010–11. The amount, dictated by law, depends on your expected family contribution (EFC) and the cost of attendance (COA). Perkins loan (federal). For high-need students, up to $5,500 a year for undergraduates and up to $8,000 a year for graduate students. Amount depends on the availability of funds and level of need. Interest is fixed at 5% and subsidized until repayment, which begins nine months after graduation. The loan may be forgiven for public service under some circumstances. Stafford loans (federal), subsidized. For students with need, up to $3,500 for freshmen, $4,500 for sophomores, and $5,500 for juniors and seniors. (Students are also eligible for additional unsubsidized Staffords.) Fixed rate of 4.5% for loans disbursed after July 1, 2010; 3.4% for loans disbursed after July 1, 2011; and 6.8% for loans disbursed after July 1, 2012, and thereafter for undergraduates, for a maximum of $23,000. Interest is subsidized until repayment, which begins six months after graduation. Flexible repayment programs and forgiveness under some circumstances. Stafford loans (federal), unsubsidized. For students who apply for federal financial aid, up to $5,500 for freshmen, $6,500 for sophomores, and $7,500 for juniors, seniors and fifth-year students (totals include subsidized Staffords), for a maximum of $31,000. Fixed rate of 6.8%. Payment deferred until six months after graduation, but interest begins accruing when the loan is disbursed. Flexible repayment programs and forgiveness under some circumstances. Advertisement Stafford loans for graduate and professional-degree students. Up to $20,500 a year, with no more than $8,500 in subsidized Staffords, to a maximum of $138,500, including undergraduate loans. Fixed rate of 6.8%. Payment deferred until six months after graduation; flexible repayment programs and forgiveness under some circumstances. State grant. Offered to state residents (and sometimes out-of-staters) based on need, merit or both. Teacher Education Assistance for College and Higher Education (TEACH) Grant. Up to $16,000 ($4,000 a year), for undergraduate, students or $8,000 for graduate students who are studying to become an elementary or secondary school teacher. After graduating, the student must teach full time for four of the next eight years in designated areas and subjects, or the grant becomes an unsubsidized Stafford loan. Total award. The amount a school offers in financial aid. Many schools do not meet full need or meet it with loans as well as grants.