DEFINITIONS

COA - Cost of Attendance - This is the yearly cost of attending a particular school.  Included in this estimate are such items as tuition, books, supplies, room & board, transportation, computer-related expenses, photocopies, and other incidentals.

EFC - Expected Family Contribution - This is the amount of money the federal government determines that your family must contribute toward your child's education per year regardless of where your student attends.  Your FAFSA form is used to determine this amount.  In addition, your EFC is subtracted from a school's COA to determine "need."

FAO - Financial Aid Officer - The administrator at each college who determines whether a student is eligible for financial aid, how much aid they qualify for, and what types. (This person's decision ultimately decides how much you will pay for a college education.)

FAFSA - Free Application for Federal Student Aid. This is the form used to apply for federal student aid.  The federal government calculates the minimum amount your family should contribute to a college education based on parents and students’ assets and income as well as several other factors.  Every student must submit this form if any aid is desired.  Eligibility to federal student loan programs is also dependent upon this form's submission.

FAP - Financial Aid Profile. This form is requested by certain private universities to obtain a lot more detailed information about a family’s financial condition. The colleges that use the FAP use a different calculation method called the Institutional Methodology. The form and the underlying methodology was created by CSS/College Board, the same firm who created the SAT and Advanced Placement curriculum.

NEED - This is the amount of financial aid the student is eligible to receive.  It is calculated by subtracting the EFC from the COA.  A student may or may not have their entire need met depending upon the school and possibly the FAO.

SAR - Student Aid Report. This is the summary report that the Dept. of Education sends you after they receive your FAFSA. It itemizes your answers that they use to calculate your EFC. The SAR gives you a chance to make corrections or adjustments with your financial information before the information is transferred to the FAO at the colleges listed on your FAFSA.

529 Plan - Taken from the section of IRS code, it’s a tax-advantaged way to save for college expenses at accredited schools. They’re also referred to as a QTP – Qualified Tuition Program. A 529 comes in 2 different varieties:

• A prepaid tuition plan used at various state colleges to “lock in” tuition inflation at a certain price. The state’s treasurer or a contracted management company manages the funds.
• A savings plan is the most popular 529. The funds are professionally managed in various financial instruments like mutual funds with the goal of increasing the value of contributions.