Glossary of Financial Aid Terms

Understanding your financial aid can feel overwhelming. This glossary breaks down the key terms you'll see in your GovState financial aid offer so you always know exactly what you're looking at.

Financial Aid Offer A financial aid offer is an official document GovState sends to students outlining the types and amounts of aid available to them for the academic year. Aid may include scholarships, grants, loans, work-study, and other assistance to help cover college expenses. Note: Some schools still use the term "award letter" — the correct, current term is financial aid offer.

Cost of Attendance The Cost of Attendance is the estimated total cost of one year at GovState. It combines direct costs billed by GovState and indirect costs you pay on your own. It also represents the maximum amount of financial aid a student can receive in an award year. Learn more about GovState's Cost of Attendance.

Costs Paid to Others Costs paid to others — also called indirect, non-billable, or additional costs — are education-related expenses not billed by GovState. GovState estimates these costs, which can vary by student and may include books, course materials, supplies, equipment, transportation, parking, personal expenses, childcare, computer costs, disability expenses, licensure fees, and off-campus rent and food.

Costs Payable to the School Costs payable to the school — also called direct or billable costs — are charges billed directly by GovState. These generally include tuition, fees, on-campus housing and meals, health insurance if minimum coverage is not documented, and any other enrollment-related charges paid to GovState.

Educational Loan An educational loan is money borrowed from the federal government, GovState, or a private lender — such as a bank or financial institution — to help pay for college expenses. All loans must be repaid with interest.

Federal Loan Also known as the Direct Loan Program, federal loans allow eligible students and parents to borrow directly from the U.S. Department of Education through participating schools like GovState. Federal student loans include Direct Subsidized, Direct Unsubsidized, and Direct PLUS loans for parents of dependent undergraduates and for graduate or professional students.

Federal Direct Subsidized Student Loan A Direct Subsidized Loan is a federal undergraduate loan based on financial need. It offers a fixed interest rate and flexible repayment options. The government covers your interest while you're enrolled, during your grace period, and during deferment — so interest does not accrue to you during those periods. Annual and aggregate borrowing limits apply.

Federal Direct Unsubsidized Student Loan A Direct Unsubsidized Loan offers students a fixed interest rate and flexible repayment options and is not based on financial need. Interest begins accruing when the loan is disbursed and can be paid while enrolled or when repayment begins. Annual and aggregate borrowing limits apply.

Federal Direct Graduate PLUS Loan Direct Graduate PLUS Loans are federal loans available to graduate and professional students to help cover education expenses. A credit check for adverse credit history is required. Interest begins accruing at disbursement and can be paid while enrolled or when repayment begins.

Federal Direct Parent PLUS Loan Direct Parent PLUS Loans are federal loans available to parents of dependent undergraduate students to help pay for education expenses. Parents must pass a credit check for adverse credit history to qualify.

Private Loan A private loan comes from a bank, credit union, private company, nonprofit, state-affiliated lender, or directly from GovState to help cover educational costs. Interest begins accruing at disbursement, and repayment may begin while the student is still enrolled. GovState recommends exhausting all federal loan options before considering private loans.

Enrollment Status Enrollment status refers to the number of credits or courses a student is taking — or whether they have withdrawn or graduated. Enrollment status affects both the type and amount of financial aid a student can receive, as well as when student loans enter repayment.

Federal Pell Grant The Pell Grant is a federal grant program designed to help undergraduate students from low- to moderate-income households pay for college. Award amounts are based on GovState's cost of attendance, the student's SAI, and enrollment status, and are subject to a lifetime aggregate limit.

Federal Supplemental Educational Opportunity Grant (FSEOG) The FSEOG is a federal grant awarded by GovState to undergraduate students who demonstrate exceptional financial need. It does not need to be repaid. Because FSEOG funding is limited and distributed directly by GovState, award amounts vary.

Federal Work-Study (FWS) Federal Work-Study provides funding for part-time jobs for undergraduate and graduate students with financial need. Unlike grants and loans, Work-Study funds are earned as wages — students are paid as they work, not in a lump sum.

Grants & Scholarships Grants and scholarships are money awarded to students that does not need to be repaid. They may also be called tuition remissions, gift aid, or tuition waivers. Aid can be awarded based on a wide range of factors, including financial need, academic achievement, talent, group affiliation, or career goals.

Need A student's need is calculated by subtracting their Student Aid Index from their Cost of Attendance. The greater the need, the more need-based aid a student may be eligible to receive.

Need-Based Aid Need-based aid is financial assistance awarded based on a student's financial situation as determined by their FAFSA. It can take the form of grants, scholarships, work-study, or low-interest loans such as the Federal Direct Subsidized Loan.

Net Price Net price is what remains after all grants and scholarships are subtracted from the Cost of Attendance. It reflects what a student is expected to pay out of pocket and can be covered through savings, student employment, a GovState payment plan, or education loans.

Other Funding Options Beyond grants and scholarships, students and families have additional options to cover remaining costs. These may include loans, student employment, GovState institutional payment plans, or personal savings.

Student Aid Index (SAI) The SAI is the eligibility index used to determine a student's qualification for federal, state, and GovState need-based aid. It is calculated from information submitted on the FAFSA. Generally, a lower SAI means greater eligibility for need-based aid. Note: The SAI replaced the Expected Family Contribution (EFC) beginning with the 2024-2025 FAFSA cycle.

Verification Verification is a federally required process to confirm the accuracy of information submitted on the FAFSA. If selected, students — and in some cases their parent or spouse — must submit supporting documents to GovState. If those documents differ from the original FAFSA, a student's financial aid eligibility or offer may be adjusted.

Satisfactory Academic Progress (SAP) To remain eligible for federal aid — including Pell Grants, FSEOG, and Direct Loans — students must make Satisfactory Academic Progress. This means continuing to complete courses and maintaining a minimum GPA based on their credit level. GovState evaluates SAP at the end of each term.

Gift Aid Gift aid is money awarded to students that does not need to be repaid, provided all terms of the award are met — such as a service requirement or academic standard. Gift aid includes grants, scholarships, remissions, and waivers, and can be awarded based on financial need, academic excellence, athletic or artistic talent, group affiliation, or career aspirations.

Self-Help Aid Self-help aid refers to loans and student employment. After gift aid is applied, loans can help cover remaining net costs. Federal Work-Study and other student employment earnings are paid as wages and can help offset indirect costs.

State Grant Illinois residents who demonstrate the highest level of financial need — as determined by FAFSA results — may qualify for a state-funded grant. Award amounts vary and are based on enrollment status.