Glossary of Financial Aid Terms

"F" Terms

Federal Family Education Loan Program (FFELP)

Education loans provided by private lenders and guaranteed by the federal government. Subsidized and unsubsidized Stafford loans and PLUS loans are included. (For more information, see the U.S. Department of Education's information about the FFELP.)

Federal Methodology (FM)

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.

Federal Pell Grant Program

Pell grants are available to students who have significant demonstrated financial need, as determined by the Free Application for Federal Student Aid. This grant is considered to be "free" money and does not have to be repaid. (For more information, see the Federal Student Aid site's information on Pell Grants.)

Federal Perkins Loan Program

Perkins loans are generally available to students who have demonstrated financial need, as determined by the Free Application for Federal Student Aid. The federal government will pay the interest on this loan as long the student is enrolled at least half-time. The Perkins Loan has a fixed interest rate of 5 percent. Repayment begins nine months after the student graduates or falls below half-time status.(For more information, see the page on Perkins Loans in the Loans section of our site.)

Federal PLUS Loans

Loans for parents of undergraduate students, widely available from lenders who participate in FFELP. Parents may borrow up to the total costs of education minus any student aid awarded (per child). The interest rate for 2006-2007 is fixed at 8.5 percent. Loans are made without regard to financial need, but borrowers must demonstrate positive credit history. (For more information, see the PLUS loan application process in the Loans section of our site.)

Federal Stafford Loans

Loans for students, both undergraduate and graduate, are widely available from lenders who participate in the FFELP program. Subsidized Federal Stafford Loans are made on the basis of financial need. The federal government pays the interest while the student is enrolled. Interest is variable, based on the 91-day Treasury bill rate plus 1.7 percent, capped at 8.25 percent. The interest rate for 2006-2007 is fixed at 6.8 percent. Repayment may take up to 10 years and is deferred until six months after a student graduates, leaves school, or drops below half-time status. As of July 1, 2007, Freshmen may borrow up to $3,500; sophomores may borrow $4,500; while juniors and seniors may borrow $5,500 annually. Students who do not qualify for a Subsidized Federal Stafford Loan, or who need additional funds, may borrow from the Unsubsidized Federal Stafford Loan Program. Interest rates and repayment terms are similar to those associated with the Subsidized Federal Stafford Loan Program, with one important difference: the government doesn't pay the interest while the student is enrolled. The student can either pay the interest as it accrues or defer payment. (For more information, see the Stafford loan application process in the Loans section of our site.)

Federal Supplemental Educational Opportunity Grant (SEOG) Program

SEOG grants are available to undergraduate students who demonstrate exceptional need, according to the results of the Free Application for Federal Student Aid.(For more information, see the Federal Student Aid site's information on the SEOG Program.)

Federal Work-Study Program

Federal work-study allows a student to earn money by working a part-time job on campus. Students must demonstrate financial need to be considered. Federal work-study is paid directly to the student every two weeks, based on the number of hours worked. First-year students typically work about 10 hours per week. (For more information, see the Student Employment overview.)

Financial Aid Package

A combination of aid, generally from a variety of sources Typically a student receives a package that includes both gift, student loans, work opportunities.

Financial Need

The difference between what it costs to attend a particular college and the amount it has been determined that a student and her/his family can afford to pay toward those expenses. The term "demonstrated financial need" Is often used at institutions such as Duke. The amount that an applicant can be expected to contribute is measured according to standardized formulas, modified at Duke by a careful review of extenuating circumstance information provided by the family . These standardized formulas include the federal and institutional methodologies, and the 568 Consensus Approach. As noted elsewhere, Duke uses the 568 Presidents' Group Consensus Approach to Need Analysis. We are happy to consider individual circumstances and encourage your family to write to us with information detailing any difficulties that affect your family's ability to support educational expenses. At Duke, each student is eligible for aid equal to the amount of his or her demonstrated financial need.

Free Application for Federal Student Aid (FAFSA)

A form used to apply for all Federal Title IV student aid programs, including Pell Grants, Stafford Loans and campus-based programs (SEOG, work-study, and Perkins Loans). The FAFSA, which is collected, distributed and processed by the United States Department of Education, gathers the information required to determine need and eligibility according to the federal methodology. It is widely available in high schools, postsecondary financial aid offices and by writing to the:

Federal Student Aid Information Center
P.O. Box 84
Washington, D.C. 20044

It is also available in online format at www.fafsa.ed.gov.