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Definitions From finaid.org

Academic Competitiveness Grant (ACG)
Academic Competitiveness Grant (ACG) is available for the first time for the 2006/07 school year for the first year students who graduated from high school after 1/1/06 and for second year students who graduated from high school after 1/1/05. The ACG award will provide up to $750 for the first year of undergraduate study and up to $1,300 for the second year of undergraduate study to full time students who are eligible for a Federal Pell Grant and who had successfully completed a rigorous high school program, as determined by the state or local education agency and recognized by the Secretary of Education. Second year students must maintain a cumulative grade point average of at least a 3.0.

Academic Year
The period during which school is in session, consisting of at least 30 weeks of instructional time.

Accrue
To accumulate.

Alternative Loans
See Private Loans.

American College Test (ACT)
One of the two national standardized college entrance examinations used in the US. The other is the SAT. The ACT is widely used in the West and Midwest.

Appeal
A formal request to have a financial aid administrator review your aid eligibility and possibly use Professional Judgment to adjust the figures. For example, if you believe the financial information on your FAFSA does not reflect your family's current ability to pay (e.g., because of death of a parent, unemployment or other unusual circumstances), you should definitely make an appeal. The financial aid administrator may require documentation of the special circumstances or of other information listed on your FAFSA.

Asset
An item of value, such as a family's home, business, and farm equity, real estate, stocks, bonds, mutual funds, cash, certificates of deposit (CDs), bank accounts, trust funds and other property and investments.

Asset Protection Allowance
A portion of your parents' assets that are not included in the calculation of the parent contribution, as calculated by the Federal Methodology need analysis formula. The asset protection allowance increases with the age of the parents.

Award Letter
An official document issued by a school's financial aid office that lists all of the financial aid awarded to the student. This letter provides details on their analysis of your financial need and the breakdown of your financial aid package according to amount, source and type of aid. The award letter will include the terms and conditions for the financial aid and information about the cost of attendance. You are required to sign a copy of the letter, indicating whether you accept or decline each source of aid, and return it to the financial aid office. Some schools call the award letter the "Financial Aid Notification (FAN)."

Award Year
The academic year for which financial aid is requested (or received).

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Bankruptcy
When a person is declared bankrupt, he is found to be legally insolvent and his property is distributed among his creditors or otherwise administered to satisfy the interests of his creditors. Federal student loans, however, cannot normally be discharged through bankruptcy.

Base Year
The tax year prior to the academic year (award year) for which financial aid is requested. The base year runs from January 1 of the junior year in high school through December 31 of the senior year. Financial information from this year is used to determine eligibility for financial aid.

Borrower
The person who receives the loan.

Budget
See Cost of Attendance.

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Campus-Based Aid
Financial aid programs are administered by the university. The federal government provides the university with a fixed annual allocation, which is awarded by the financial aid administrator to deserving students. Such programs include the Perkins Loan, Supplemental Education Opportunity Grant and Federal Work-Study. Note that there is no guarantee that every eligible student will receive financial aid through these programs, because the awards are made from a fixed pool of money.

Campus Employment
Campus Employment is simply a part-time job.

Cancellation
Some loan programs provide for cancellation of the loan under certain circumstances, such as death or permanent disability of the borrower. Some of the Federal student loan programs have additional cancellation provisions. For example, if the student becomes a teacher in certain national shortage areas, they may be eligible for cancellation of all or part of the balance of their educational loans. Repayment assistance is available if you serve in the military; the military pays off a portion of your loans for every year of service.

Capitalization
The practice of adding unpaid interest charges to the principal balance of an educational loan, thereby increasing the size of the loan. Interest is then charged on the new balance, including both the unpaid principal and the accrued interest. Capitalizing the interest increases the monthly payment and the amount of money you will eventually have to repay. If you can afford to pay the interest as it accrues, you are better off not capitalizing it. Capitalization is sometimes called compounding. See also Unsubsidized Loans.

Commuter Student
A student who lives at home and commutes to school every day.

Compounded Interest
Interest that is paid on both the principal balance of the loan and on any accrued (unpaid) interest. Capitalizing the interest on an unsubsidized Stafford loan is a form of compounding.

Cosigner
A cosigner on a loan assumes responsibility for the loan if the borrower should fail to repay it.

Cost of Attendance (COA)
(Also known as the cost of education or "budget") The total amount it should cost the student to go to school, including tuition and fees, room and board, allowances for books and supplies, transportation, and personal and incidental expenses. Loan fees, if applicable, may also be included in the COA. Child care and expenses for disabilities may also be included at the discretion of the financial aid administrator. Schools establish different standard budget amounts for students living on-campus and off-campus as well as in-state and out-of-state students.

Credit Rating
An evaluation of the likelihood of a borrower to default on a loan. Credit bureaus and credit reporting agencies provide this information to banks and businesses to help them decide whether to issue a loan or extend credit. Your credit rating may include your payment history, a list of current and past credit accounts and their balances, employment and personal information and a history of past credit problems. People who make all their payments on time are considered good credit risks. People who are frequently delinquent in making their payments are considered bad credit risks. Defaulting on a loan can hurt your credit rating.

Custodial Parent
If a student's parents are divorced or separated, the custodial parent is the one with whom the student lived the most during the past 12 months. The student's need analysis is based on financial information supplied by the custodial parent.

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Default
A loan is in default when the borrower fails to pay several regular installments on time (i.e., payments overdue by 180 days) or otherwise fails to meet the terms and conditions of the loan. If you default on a loan, the university, the holder of the loan, the state government and the federal government can take legal action to recover the money, including garnishing your wages and withholding income tax refunds. Defaulting on a government loan will make you ineligible for future federal financial aid, unless a satisfactory repayment schedule is arranged, and can affect your credit rating.

Deferment
Occurs when a borrower is allowed to postpone repaying the loan. If you have a subsidized loan, the federal government pays the interest charges during the deferment period. If you have an unsubsidized loan, you are responsible for the interest that accrues during the deferment period. You can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. Most federal loan programs allow students to defer their loans while they are in school at least half time. If you don't qualify for a deferment, you may be able to get a forbearance. You can't get a deferment if your loan is in default.

Delinquent
If the borrower fails to make a payment on time, the borrower is considered delinquent and late fees may be charged. If the borrower misses several payments, the loan goes into default.

Dependency Status
Determines to what degree a student has access to parent financial resources.

Dependent
For a child or other person to be considered your dependent, they must live with you and you must provide them with more than half of their support. Spouses do not count as dependents in the Federal Methodology. You and your spouse cannot both claim the same child as a dependent.

Direct Loan Program
Includes the Federal Direct Stafford Loan (subsidized and unsubsidized) and the Direct Parent Loan for Undergraduate Students (PLUS). The funds for these loans are provided directly by the federal government.

Disbursement
The release of loan funds to the school for delivery to the borrower. The payment will be made co-payable to the student and the school. Loan funds are first credited to the student's account for payment of tuition, fees, room and board and other school charges. Any excess funds are then paid to the student in cash or by check. Unless the loan amount is under $500, the disbursement will be made in at least two equal installments.

Discharge
To release the borrower from his or her obligation to repay the loan. See also Cancellation.

Disclosure Statement
Provides the borrower with information about the actual cost of the loan, including the interest rate, origination, insurance, loan fees and any other types of finance charges. Lenders are required to provide the borrower with a disclosure statement before issuing a loan.

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Electronic Funds Transfer (EFT)
Used by some schools and lenders to wire funds for Stafford and PLUS loans directly to participating schools without requiring an intermediate check for the student to endorse. The money is transferred electronically instead of using paper, and hence is available to the student sooner. If you have a choice of funds transfer methods, use EFT.

Electronic Student Aid Report
An electronic form of the Student Aid Report.

Eligible Non-Citizen
Someone who is not a US citizen but is nevertheless eligible for Federal student aid. Eligible non-citizens include US permanent residents who are holders of valid green cards, US nationals, holders of form I-94 who have been granted refugee or asylum status and certain other non-citizens. Non-citizens who hold a student visa or an exchange visitor visa are not eligible for Federal student aid.

Endowment
Funds owned by an institution and invested to produce income to support the operation of the institution. Many educational institutions use a portion of their endowment income for financial aid.

Enrollment Status
An indication of whether you are a full-time or part-time student. Generally you must be enrolled at least half-time (and in some cases full-time) to qualify for financial aid.

Entrance Interview
See Loan Interviews.

Exit Interview
See Loan Interviews.

Expected Family Contribution (EFC)
The amount of money that the family is expected to be able to contribute to the student's education, as determined by the Federal Methodology need analysis formula approved by Congress. The EFC includes the parent contribution and the student contribution, and depends on the student's dependency status, family size, number of family members in school, taxable and nontaxable income and assets. The difference between the COA and the EFC is the student's financial need, and is used in determining the student's eligibility for need-based financial aid. If you have unusual financial circumstances (such as high medical expenses, loss of employment or death of a parent) that may affect your ability to pay for your education, tell your financial aid administrator (FAA). He or she can adjust the COA or EFC to compensate. See Professional Judgment.

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Federal Family Education Loan Program (FFELP)
Includes the Federal Stafford Loan (Subsidized and Unsubsidized) and the Parent Loan for Undergraduate Students (PLUS). The funds for these loans are provided by private lenders, such as banks, credit unions and savings & loan associations. These loans are guaranteed against default by the federal government.

Federal Methodology
The need analysis formula used to determine the EFC. The Federal Methodology takes family size, the number of family members in college, taxable and nontaxable income and assets into account. Unlike most Institutional Methodologies, however, the Federal Methodology does not consider the net value of the family residence.

Federal Processor
The organization that processes the information submitted on the Free Application for Federal Student Aid (FAFSA) and uses it to compute eligibility for federal student aid.

Federal Work-Study (FWS)
Program providing undergraduate and graduate students with part-time employment during the school year. The federal government pays a portion of the student's salary, making it cheaper for departments and businesses to hire the student. For this reason, work-study students often find it easier to get a part-time job. Eligibility for FWS is based on need. Money earned from a FWS job is not counted as income for the subsequent year's need analysis process.

Financial Aid
Money provided to the student and the family to help them pay for the student's education. Major forms of financial aid include gift aid (grants and scholarships) and self-help aid (loans and work).

Financial Aid Administrator (FAA)
A college or university employee who is involved in the administration of financial aid. Some schools call FAAs "Financial Aid Advisors" or "Financial Aid Counselors."

Financial Aid Notification (FAN)
See Award Letter.

Financial Aid Office (FAO)
The college or university office that is responsible for the determination of financial need and the awarding of financial aid.

Financial Aid Package
The complete collection of grants, scholarships, loans and work-study employment from all sources (federal, state, institutional and private) offered to a student to enable them to attend the college or university.

Financial Need
See Need.

Fixed Interest
In a fixed interest loan, the interest rate stays the same for the life of the loan.

Forbearance
During a forbearance the lender allows the borrower to temporarily postpone repaying the principal, but the interest charges continue to accrue, even on subsidized loans. The borrower must continue paying the interest charges during the forbearance period. Forbearances are granted at the lender's discretion, usually in cases of extreme financial hardship or other unusual circumstances when the borrower does not qualify for a deferment. You can't receive a forbearance if your loan is in default.

Free Application for Federal Student Aid (FAFSA)
Form used to apply for Pell Grants and all other need-based aid. As the name suggests, no fee is charged to file a FAFSA.
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Gift Aid
Financial aid, such as grants and scholarships, which does not need to be repaid.

Grace Period
A short time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period may also kick in if the borrower leaves school for a reason other than graduation or drops below half-time enrollment. Depending on the type of loan, you will have a grace period of six months (Stafford Loans) or nine months (Perkins Loans) before you must start making payments on your student loans. The PLUS Loans do not have a grace period.

Grade Point Average (GPA)
An average of a student's grades, converted to a 4.0 scale (4.0 is an A, 3.0 is a B, and 2.0 is a C).

Grant
A type of financial aid based on financial need that the student does not have to repay.

Gross Income
Income before taxes, deductions and allowances have been subtracted.

Guaranty Agency or Guarantor
State agencies responsible for approving student loans and insuring them against default. Guaranty agencies also oversee the student loan process and enforce federal and state rules regarding student loans.

Guaranty Fee
A small percentage of the loan that is paid to the guaranty agency to insure the loan against default (and by law cannot exceed 3% of the loan amount).

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Half-Time
Most financial aid programs require that the student be enrolled at least half-time to be eligible for aid. Some programs require the student to be enrolled full-time.

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Income
The amount of money received from employment (salary, wages, tips), profit from financial instruments (interest, dividends, capital gains), or other sources (welfare, disability, child support, Social Security and pensions).

Independent
An independent student is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). A parent refusing to provide support for their child's education is not sufficient for the child to be declared independent. (See also Dependent.)

Individual Retirement Account (IRA)
One of several popular types of retirement funds. It is not legal to borrow money from your IRA to help pay for your children's education.

Institutional Student Information Report (ISIR)
The electronic version of SARs delivered to schools by EDExpress.

Interest
Amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal balance of the loan. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan.

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Lender
A bank, credit union, savings & loan association, or other financial institution that provides funds to the student or parent for an educational loan.

Loan
A type of financial aid which must be repaid, with interest. The federal student loan programs are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.

Loan Consolidation
See Consolidation Loan.

Loan Forgiveness
The federal government cancels all or part of an educational loan because the borrower meets certain criteria (e.g., is performing military or volunteer service).

Loan Interviews (Entrance Counseling)
Students with educational loans are required to participate in an Entrance Counseling session before they receive their first loan disbursement and again before they graduate or otherwise leave school. During these counseling sessions, called entrance and exit interviews, information is given to the student regarding the repayment terms of the loan and the repayment schedule.

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Matriculate
A student matriculates in college when he or she enrolls in college for the first time.

Maturity Date
The date when a loan comes due and must be repaid in full.

Merit-based
Financial aid that is merit-based depends on your academic, musical, or athletic merit or some other criteria, and does not depend on the existence of financial need. Merit-based awards use your grades, test scores, and special talents to determine your eligibility for scholarships.

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The National Science and Mathematics Access to Retain Talent Grant,
The National Science and Mathematics Access to Retain Talent Grant, also known as the National Smart Grant is available during the third and fourth years of undergraduate study to full-time students who are eligible for the Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security. The student must also have maintained a cumulative grade point average (GPA) of at least 3.0 in coursework required for the major. The National SMART Grant award is $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Federal Pell Grant.

Need
The difference between the COA and the EFC is the student's financial need -- the gap between the cost of attending the school and the student's resources. The financial aid package is based on the amount of financial need. The process of determining a student's need is known as need analysis.

Cost of Attendance (COA)
- Expected Family Contribution (EFC)
-----------------------------------------
= Financial Need

Need Analysis
The process of determining a student's financial need by analyzing the financial information provided by the student and his or her parents (and spouse, if any) on a FAFSA. The student must submit a FAFSA to apply for need-based aid.

Need-Based
Financial aid that is need-based depends on your financial situation. Most government sources of financial aid are need-based.

New Borrower
See First-Time Borrower.

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Origination Fee
Fee paid to the bank to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed, and typically run up to 3% of the amount disbursed.

Outside Resource
Aid or benefits available because a student is in school and is counted after need is determined. Outside scholarships, prepaid tuition plans, and VA educational benefits are examples of outside resources.

Outside Scholarship
A scholarship that comes from sources other than the school and the federal or state government.

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Packaging
The process of assembling a financial aid package.

Parent Loans for Undergraduate Students (PLUS)
Federal loans available to parents of dependent undergraduate students to help finance the child's education. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received. PLUS Loans may be used to pay the EFC. There is a minimal credit check required for the PLUS loan, so a good credit history is required. If your application for a PLUS loan is turned down, your child may be eligible to borrow additional money under the Unsubsidized Stafford Loan program.

Pell Grant
A federal grant that provides funds of up to $4,310 based on the student's financial need.

Perkins Loan
Formerly the National Direct Student Loan Program, the Perkins Loan allows students to borrow for undergraduate school. The Perkins Loan has one of the lowest interest rates and is awarded by the financial aid administrator to students with exceptional financial need. The student must have applied for a Pell Grant to be eligible. The interest on the Perkins Loan is subsidized while the student is in school.

Principal
The amount of money borrowed or remaining unpaid on a loan. Interest is charged as a percentage of the principal. Insurance and origination fees will be deducted from this amount before disbursement.

Private Loans
Education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments.

Professional Judgment (PJ)
For need-based federal aid programs, the financial aid administrator can adjust the EFC, adjust the COA, or change the dependency status (with documentation) when extenuating circumstances exist. For example, if a parent becomes unemployed, disabled or deceased, the FAA can decide to use estimated income information for the award year instead of the actual income figures from the base year. This delegation of authority from the federal government to the financial aid administrator is called Professional Judgment (PJ).

Promissory Note
The binding legal document that must be signed by the student borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy and cancellations. The student should keep this document until the loan has been repaid.

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Renewable Scholarships
A scholarship that is awarded for more than one year. Usually the student must maintain certain academic standards to be eligible for subsequent years of the award. Some renewable scholarships will require the student to reapply for the scholarship each year; others will just require a report on the student's progress to a degree.

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Satisfactory Academic Progress (SAP)
A student must make this in order to continue receiving federal aid. If a student fails to maintain an academic standing consistent with the school's SAP policy, they are unlikely to meet the school's graduation requirements.

Scholarship
A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships are a form of gift aid and do not have to be repaid. Many scholarships are restricted to students in specific courses of study or with academic, musical, or athletic talent.

Scholastic Assessment Test (SAT)
One of the two national standardized college entrance examinations used in the US. The other is the ACT. The SAT (previously known as the Scholastic Aptitude Test) is administered by the Educational Testing Service (ETS). Most universities require either the ACT or the SAT as part of an application for admission.

Selective Service
Registration for the military draft. Male students who are US citizens and have reached the age of 18 and were born after December 31, 1959 must be registered with Selective Service to be eligible for federal financial aid. If the student did not register and is past the age of doing so (18-25), and the school determines that the failure to register was knowing and willful, the student is ineligible for all federal student financial aid programs. The school's decision as to whether the failure to register was willful is not subject to appeal. Students needing help resolving problems concerning their Selective Service registration should call 1-847-688-6888.

Simple Interest
Interest that is paid only on the principal balance of the loan and not on any accrued interest. Most federal student loan programs offer simple interest. Note, however, that capitalizing the interest on an unsubsidized Stafford loan is a form of compounded interest.

Stafford Loans
Federal loans that come in two forms, subsidized and unsubsidized. Subsidized loans are based on need; unsubsidized loans aren't. The interest on the subsidized Stafford Loan is paid by the federal government while the student is in school and during the 6 month grace period.

Undergraduates may borrow up to $23,000 ($3,500 during the freshman year, $4,500 during the sophomore year and $5,500 during the third, fourth and fifth years). These limits are for subsidized and unsubsidized loans combined. The difference between the subsidized loan amount and the limit may be borrowed by the student as an unsubsidized loan.

Higher unsubsidized Stafford loan limits are available to independent students, dependent students whose parents were unable to obtain a PLUS Loan, and graduate/professional students. Undergraduates may borrow up to $46,000 ($7,500 during the freshman year, $8,500 during the sophomore year and $10,500 during each subsequent year). These limits are for subsidized and unsubsidized loans combined. The amounts of any subsidized loans are still subject to the lower limits.

Student Aid Report (SAR)
Report that summarizes the information included in the FAFSA. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC). You should receive a copy of your SAR four to six weeks after you file your FAFSA. Review your SAR and correct any errors on part 2 of the SAR. Keep a photocopy of the SAR for your records. To request a duplicate copy of your SAR, call 1-319-337-5665.

Subsidized Loan
With a subsidized loan, such as the Perkins Loan or the Subsidized Stafford Loan, the government pays the interest on the loan while the student is in school, during the six-month grace period and during any deferment periods. Subsidized loans are awarded based on financial need. See Stafford Loans for information about subsidized Stafford Loans.

Supplemental Education Opportunity Grant
Federal grant program for undergraduate students with exceptional need. SEOG grants are awarded by the school's financial aid office. To qualify, a student must also be a recipient of a Pell Grant.

Title IV Loans
Title IV of the Higher Education Act of 1965 created several education loan programs which are collectively referred to as the Federal Family Education Loan Program (FFELP). These loans, also called Title IV Loans, are the Federal Stafford Loans (Subsidized and Unsubsidized), Federal PLUS Loans, and Federal Consolidation Loans.

Title IV School Code
When you fill out the FAFSA you need to supply the Title IV Code for each school to which you are applying. The School Code for Mount Vernon Nazarene University is 007085.

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Undergraduate Student
A student who is enrolled in a Bachelors program.

Unsecured Loan
A loan not backed by collateral, representing a greater risk to the lender. The lender may require a co-signer on the loan to reduce their risk. If you default on the loan, the co-signer will be held responsible for repayment. Most educational loans are unsecured loans. In the case of federal student loans, the federal government guarantees repayment of the loans. Other examples of unsecured loans include credit card charges and personal lines of credit.

Unsubsidized Loan
A loan for which the government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed, even while the student is still in school. Students may avoid paying the interest while they are in school by capitalizing the interest, which increases the loan amount. Unsubsidized loans are not based on financial need.

Untaxed Income
Contributions to IRAs, Keoghs, tax-sheltered annuities and 401k plans, as well as worker's compensation and welfare benefits.

US Department of Education (ED or USED)
Government agency that administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loans, the Federal Stafford Loans, the Federal PLUS Loans, the Academic Competitiveness Grant, and the National SMART Grant.

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Variable Interest
In a variable interest loan, the interest rate changes periodically. For example, the interest rate might be pegged to the cost of US Treasury Bills (e.g., T-Bill rate plus 3.1%) and be updated monthly, quarterly, semi-annually or annually.

Verification
Verification is a review process in which the financial aid administrator determines the accuracy of the information provided on the student's FAFSA. During the verification process the student and parent will be required to submit documentation. Such documentation may include signed copies of the most recent Federal income tax returns for you, your spouse (if any), and your parents, proof of citizenship, proof of registration with Selective Service, and copies of Social Security benefit statements and W2 and 1099 forms, among other things.

FAFSA forms are randomly selected by the Federal processor for verification, with most schools verifying at least 1/3 of all applications. If there is an asterisk next to the EFC figure on your Student Aid Report (SAR), your SAR has been selected for verification. Schools may select additional students for verification if they suspect fraud. Some schools undergo 100% verification.

If any discrepancies are uncovered during verification, the university may require additional information to clear up the discrepancies. Such discrepancies may cause your final financial aid package to be different from the initial package described on the award letter you received from the school.

If you refuse to submit the required documentation, your financial aid package will be cancelled and no need-based aid awarded.

Veteran
For Federal financial aid purposes such as determining dependency status, a veteran is a former member of the US Armed Forces (Army, Navy, Air Force, Marines or Coast Guard) who served on active duty and was discharged other than dishonorably (i.e., received an honorable or medical discharge). You are a veteran even if you serve just one day on active duty - not active duty for training - before receiving your DD-214 and formal discharge papers. (Note that in order for a veteran to be eligible for VA educational benefits, they must have served for more than 180 consecutive days on active duty before receiving an honorable discharge. There are exceptions for participation in Desert Storm/Desert Shield and other military campaigns.)

ROTC students, members of the National Guard, and most reservists are not considered veterans.

Since the 1995-96 academic year, a person who was discharged other than dishonorably from one of the military service academies (the U.S. Military Academy at West Point, the Naval Academy at Annapolis, the Air Force Academy at Colorado Springs or the Coast Guard Academy at New London) is considered a veteran for financial aid purposes. Cadets and midshipmen who are still enrolled in one of the military service academies, however, are not considered veterans. According to the US Department of Education's Action Letter #6 (February 1996), "a student who enrolls in a service academy, but who withdraws before graduating, is considered a veteran for purposes of determining dependency status".

Having a DD-214 does not necessarily mean that you are a veteran for financial aid purposes. As noted above, you must have served on active duty and received an honorable discharge.

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W2 Form
The form listing an employee's wages and tax withheld.

Ward of the Court
A ward of the court is someone under the protection of the courts. The ward of the court may have a guardian appointed by the court. The legal guardian is not personally liable for the ward's expenses and is not liable to third parties for the ward's debts.

Although a ward of the court can have a legal guardian, having a legal guardian does not automatically make the child a ward of the court. A legal guardian can be appointed by parental consent through a power of attorney. A legal guardian must have been appointed by the court for the child to be a ward of the court. When a guardian is appointed by the court, the parent no longer has the authority to revoke the guardianship.

Often a minor becomes a ward of the court when the court determines that the child will be subject to abuse or neglect if they remain with the parent or if both of the student's biological or adoptive parents are deceased.

Note that a child does not automatically become a ward of the court upon being incarcerated. The key issue is whether the court assumed custody of the child because it found that the parents are unable to properly care for the child. Likewise, emancipation does not make a student a ward of the court. Neither incarceration nor emancipation of the student is sufficient on its own to make the student independent.

The key issue for financial aid purposes is that when a child becomes a ward of the court, no parent or other person is financially responsible for the child. Legal guardians and foster parents are not financially responsible for a ward of the court. Adoptive parents, on the other hand, are financially responsible for the child.

If the student is declared a ward of the court before the end of the award year, the student is considered to be an independent student for the award year and the student's status would need to be updated.

The school financial aid administrator should ask for a copy of the court order that declared the child a ward of the court. If there is any confusion as to whether the child is a ward of the court or not, the financial aid administrator should ask for a letter from the judge clarifying whether the child is a ward of the court.

Note that a child can be a ward of the court and still have contact with his or her biological parents or even still be living with the parents (albeit under court supervision). The biological parents, however, are no longer empowered to make any decisions on behalf of the child.

Work Study
See Federal Work-Study.

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