Office of Financial Aid Office of Financial Aid


Academic year: the measure of the academic work to be accomplished by a student each year as defined by the University, which has two semesters that contain at least 30 weeks of instructional time in which a full-time student is expected to complete at least 24 semester credits.

Annual percentage rate (APR): Total annual cost of a loan, including fees and interest.

Award year: the period of time between fall term and the end of the following summer session.

Accrued interest: interest that accumulates on the unpaid balance of your loan.

Assets: Money in savings accounts and investments, including stocks, bonds, a business, a farm, or other real estate.

Base year: The tax year used to determine how your financial aid will be awarded. (This is usually the year before you plan to enter college.)

Being reviewed manually: Your situation requires that we review your status manually. Your status should be updated within 2 weeks.

Borrower: person responsible for repaying a loan who has agreed to the terms and signed a promissory note.

Campus-based programs: collective term that refers to the Federal Supplemental Educational Opportunity Grant, Federal Work-Study programs, and Federal Perkins Loan.

Capitalizing interest: adding unpaid, accumulated interest to the loan principal, increasing the total loan cost.

Central processing system (CPS): the system that receives your need analysis data. The CPS calculates your official expected family contribution (EFC).

Consolidation loan: A loan taken out to pay off existing student loans. By combining existing loans the borrower simplifies repayment and can lower monthly payment amount by extending the repayment period to up to 30 years.

Cost of attendance (COA): your anticipated expense to attend college. Includes tuition, fees, housing, food, transportation, books and supplies, personal expenses, and other costs, depending on individual circumstances.

Cosigner: Person with good credit who adds his or her signature to the student borrower's on a promissory note. This person becomes legally liable for repayment of the loan, if the student does not or cannot make the payments.

Credit balance: the amount remaining in your university student account after all on-campus charges have been paid.

Custodial parent: The parent you lived with for the most time, the year before you enter college. If you lived with both divorced or separated parents for the same amount of time, the custodial parent is the one who provided the most financial support.

Default: failure to repay a loan according to the terms of the promissory note. For a loan repayable in monthly installments, a loan is in default after 270 days of no payment.

Deferment: the temporary postponement of loan payments for a limited period of time. Deferments, allowed for specific borrower activities, extend the loan repayment period by the length of the deferment period.

Delinquency: this occurs when loan payments are late or missed, as specified in the terms of the promissory note and the selected repayment plan.

Dependent student: meets any one of the criteria as defined by the federal government. Detailed information can be found here. Dependent students must report their parents' income on their financial aid applications.

Direct loans: a federal loan program established by the Student Loan Reform Act of 1993 that provides loans directly to students from the federal government at a variable interest rate. You pay an origination fee on the gross amount borrowed. Loans may be either need or non-need based.

Direct Loan Servicing Center: the U.S. Department of Education's agent contracted to collect Direct Loans and handle deferments, repayment options, and consolidations.

Disbursement: the release of financial aid funds to individual student accounts; funds are disbursed when the student's financial aid file is complete and registration has been verified.

Discharge: the release of borrowers from their obligations to repay their Direct Loans when they have met certain conditions, such as permanent total disability.

Disclosure statement: a statement of the actual cost and terms of the loan, including interest rate and additional finance charges.

Drop: Term used when a student removes a class from his/her schedule before the 100% add/drop deadline for the session. This class will not show on the student's transcript.

Expected family contribution (EFC): the dollar amount that a family is expected to contribute to a student's education as determined by the needs analysis.

Entrance/exit interview: counseling sessions that borrowers attend before receiving their first loan disbursements and again before leaving school.

Eligible non-citizen: A permanent resident of the United States who may have eligibility for federal aid. Detailed information can be found here.

Eligible for aid: You are currently meeting all SAP requirements and are eligible for federal, state, and institutional aid or are eligible based on an appeal approval.

FAFSA: Free Application for Federal Student Aid: the federal form that must be completed to be considered for all federal financial aid funds.

Federal Direct Loans, Subsidized: Loans on which the federal government pays the interest while you are enrolled at least half-time, and for up to six months after you graduate or drop below half-time enrollment.

Federal Direct Loans, Unsubsidized: Loans for which you are responsible for interest payments from the date of disbursement. The accrued interest is "capitalized" — added to the principal balance. You are charged interest on the total amount of principal plus accrued interest.

Federal Methodology: The formulas used to determine a student's eligibility for federal Title IV funds. The formulas take into account income, some assets, expenses, family size, and other factors. FM is written by congress rather than a peer community assessment and is not updated regularly.

Federal Pell Grant: a federal grant program for needy postsecondary students who have not received a bachelor's degree or first professional degree.

Federal Perkins Loan: low interest loans for undergraduate or graduate students. Priority is given to students with exceptional financial need, as defined by Eastern Michigan University.

Federal Work Study: state and federal employment programs that subsidize wages for postsecondary students with financial need to help them pay for educational expenses.

Financial aid: financial assistance in the form of scholarships, grants, employment opportunities, and education loans from federal, state, and private sources.

Financial Aid Award Letter: a letter to you from the Eastern Michigan University that lists the types and amounts of aid offered and the terms and conditions of that aid.

Forbearance: an arrangement to postpone or reduce a borrower's monthly payment amount for a limited and specified period, or to extend the repayment period. The borrower is charged interest during a forbearance. A forbearance is usually granted at the discretion of the lender to borrowers ineligible for a deferment.

Full-time student: an undergraduate student taking a minimum of 12 credits per term or a graduate student taking a minimum of 8 credits per term.

Grants: educational funds that do not require repayment.

Grace period: the period between the time borrowers leave school or drop below half-time study and the time they must begin repaying their loans, usually six months, depending on the type of loan.

Half-time student: an undergraduate or professional student taking at least 6 credits per term or a graduate student taking at least 4 credits per term during the academic year.

Income: amount of money received from any or all of the following: wages, interest, dividends, sales, or rental of property or services, business or farm profits, certain welfare programs, disability, inheritance, gambling or contest winnings, or retirement benefits and other types of taxable and nontaxable income.

Income contingent repayment: A repayment plan for Direct Loans in which payments don't exceed 20 percent of discretionary income.

Independent student: A student is independent if he or she is any of the following:

  • at least 24 years old by December 31 of the first year of the award
  • married
  • a graduate or professional student
  • a veteran
  • an orphan
  • a ward of the court
  • someone with legal dependents other than a spouse that they financially support at least 50%

Interest rate: cost paid to borrow money. This rate may be fixed or variable.

Legal dependent (for dependency determination): a child or other person (other than a spouse) who lives with and gets more than half of his or her support from the student and will continue to receive that support during the school year.

Legal guardian: a court-appointed individual whose guardianship responsibilities include using personal financial resources to support the person in his or her charge.

Lender: an entity offering loans to students; it can be a private company or bank, the government (Direct Loans), or an educational institution (Perkins Loans).

Less than half-time student: an undergraduate taking less than 6 credits per term or graduate student taking less than 4 credits per term. Students enrolled less than half-time are ineligible for financial aid under most circumstances.

Master Promissory Note (MPN): a promissory note that can be used to make one or more loans for one or more academic years; currently used to make Subsidized and Unsubsidized Direct Loans.

Max Credit Hours reached: You have reached the 150% limit of overall credit hours attempted and are no longer eligible for federal and state aid while completing this program. If you have an exceptional circumstance, such as enrollment in a double major, you may qualify for an extension.

Merit-based aid: assistance that is awarded because of a student's achievements or talent in a particular area, such as academics or athletics.

National Student Loan Data System (NSLDS): The federal student financial aid database:

Nearing Max Credit Hours: You are within one full-time semester of reaching the 150% limit of overall credit hours attempted for your program. You will no longer be eligible once you have reached the 150% limit. If your program (as outlined in the University Catalog) requires more than 124 credit hours undergraduate or 30 credit hours graduate, contact our office.

Need: the difference between Eastern Michigan University cost of attendance and a student's (and family's) ability to pay. Ability to pay is represented by the EFC.

Need analysis: a system used to estimate a family's ability to pay for postsecondary education based on the information reported on the financial aid application; one of the necessary steps in establishing a student's need for financial assistance.

Not yet reviewed: Your Satisfactory academic progress has not yet been evaluated. This will not prevent you from receiving aid.

Origination fee: a fee charged by the federal government and deducted from the loan proceeds before disbursement to help reduce the cost of supporting low-interest loans; currently assessed on Direct Loans, but not on the Perkins Loan.

Overaward: a situation in which the student's financial aid exceeds the calculated financial need. Federal student aid programs do not allow overawards.

Prepayment: any amount paid on a loan by the borrower before it is required to be paid under the terms of the promissory note. There is no penalty for prepaying principal or interest on Direct or Perkins Loans.

Principal: amount a person borrows (which may increase as a result of capitalized interest) and the amount on which interest is paid.

Promissory note: a legal and binding document signed by a borrower promising to repay a loan; it includes the terms and conditions for repayment.

Repayment schedule: a statement provided by the lender or servicer of a loan to the borrower that lists the amount borrowed, the amount of monthly payments, and the date payments are due.

Satisfactory academic progress: the academic standard, as determined by Eastern Michigan University, in compliance with federal regulations that a student must meet to continue receiving financial aid.

Scholarships: educational funds that do not require repayment and are usually awarded on the basis of merit.

Statement of Educational Purpose/Registration Compliance: a statement on the FAFSA in which students certify with their signature that they will use funds only for educational expenses and that they have, if required to do so, registered with Selective Service.

Student Aid Report (SAR): the notification to the student of the FAFSA processing results.

Tax deduction: An expense that you may subtract from your adjusted gross income, so that your taxable income is lowered.

Three-quarter-time student: an undergraduate student taking 9-11 credits per term or a graduate student taking 6-7 credits per term

Variable interest: rate of interest on a loan that is tied to a stated index and changes at intervals specified in the promissory note.

Verification: the process to confirm an individual student's application data. Students and parents must submit tax transcripts and other supporting documentation if asked.

Withdrawal: Term used when a student removes a class from their schedule after the 100% refund deadline for the session. The refund deadlines are published in the printed Academic Class Schedule or on the Web. The student is responsible for all of the tuition and fees associated with the course, and the course will be listed on the student transcript with a W (Withdrawal). Students on financial aid may owe the government money back if they withdraw from all of their courses in a semester. (See information related to Overpayments). Withdrawing from a course may also jeopardize the student's status related to the Academic Intervention Program; and any students receiving financial aid may not achieve the required Satisfactory Academic Progress policy.