A system of principles, practices, and procedures created by the 568 Presidents’ Group and used at approximately 35 colleges and universities, including MIT, to determine the ability of each student’s family to support the annual student expense budget.
An Internal Revenue Service (IRS) form that all eligible educational institutions, such as MIT, are required to complete at the end of the calendar year for each enrolled student who was billed and/or paid tuition. A copy of the 1098-T is sent to the IRS and the student to determine the student’s eligibility for educational tax credits – the Hope Scholarship and Lifetime Learning Educational Credits.
A period of time colleges and universities use to measure a quantity of study. Academic years vary from school to school and within a school depending on the educational program. At MIT, an academic year generally consists of two terms, fall and spring. For MIT students attending during the summer term, summer is considered the beginning of the academic year for financial aid purposes.
The day on which interest charges are added to the loan balance.
The process whereby interest accumulates on a loan.
Interest that accumulates on the unpaid principal balance of a loan.
An Internal Revenue Service (IRS) term referring to taxable income after all allowable deductions are made. More information on adjusted gross income is available on this IRS web site.
Adverse credit history is ordinarily defined as being more than 90 days late on any debt or having a federal student financial assistance debt (including a debt due to grant overpayment) within the past five years subjected to default determination, bankruptsy discharge, foreclosure, repossession, tax lien, wage garnishment or write-off.
The total amount of money that can be borrowed from a loan program over a student’s period of study, including undergraduate and graduate/professional school. Occasionally, the aggregate loan limit is modified to lessen its scope, such as aggregate undergraduate loan limit, or broaden its scope, such as aggregate loan limit from all loan programs.
The amount of money that can be borrowed from a loan program during one academic year.
A rate that reflects the total cost of borrowing money over the life of the loan, considering not only the interest rate but also the effect of other loan fees on the total cost of repaying the amount financed.
When used as a financial term, assets mean tangible items of monetary value. The assets considered in determining a family’s ability to pay for college, or the family contribution, include cash in checking and savings accounts, trusts, stocks, bonds, home equity, and other securities such as real estate and business holdings. Assets in formal retirement plans are excluded.
A person, most often a parent, who is designated by an MIT student as being allowed to view the student’s monthly online bill and make electronic payments using MITPAY.
A letter detailing the types and amount of financial aid offered to an aid applicant.
A period of time used for awarding student financial aid. At MIT the award year is twelve months, beginning on July 1 of one year and extending to June 30 of the next.
The person who, by signing a promissory note, agrees to the terms of a loan and therefore is legally responsible for its repayment.
The estimated annual per-student expenditure a school uses for purposes of determining financial aid eligibility. Also known as student budget, student expense budget and price. A student’s budget includes not only tuition and fees, but also standard allowances to cover other reasonable expenses while attending school, such as room, board, books, supplies, transportation and personal expenses.
An outside billing service retained by MIT to handle the billing, accounting and data processing services for MIT Loans including MIT Technology Loans and Federal Perkins Loans.
The release of borrowers from their obligation to repay all or part of their loans, for conditions such as total and permanent disability or death. Also referred to as a discharge.
The interest that accrues on a loan which, if not paid prior to a specific date, is added to the principal balance. Capitalizing interest increases the amount a borrower owes, especially if capitalization occurs frequently. Compounding is another term used for capitalization.
Money owed from a student account in payment for a service, such as tuition or housing.
A private loan from Citibank. The student is the borrower and must have a co-signer.
Anyone who meets one of the following criteria:
Additional money charged to the borrower based on a percentage of the outstanding principal, interest and late fees.
A national nonprofit association that administers tests including the SAT and AP, and offers other services in the areas of college admissions, assessment, guidance, financial aid and enrollment.
The division of the College Board that provides financial aid services.
The process of combining eligible education loans into a single new loan with a fixed interest rate. Ordinarily used to refer to a federal consolidation loan program which allows borrowers to lower their monthly repayments by combining two or more eligible federal loans.
A person other than the borrower who, by signing a loan promissory note as a backup, agrees to assume responsibility for repayment if the borrower fails to repay. The term is generally used interchangably with co-signer and endorser.
A service performed by an individual or organization to benefit the public and its institutions. While the term is often used as a synonym for volunteering, community service work can be paid or unpaid.
The amount of money that a college or university actually spends to educate a student each year. This is considerably more than the tuition charged to the student, because MIT (as most other schools do) subsidizes a significant amount of each student's education, in addition to providing grants and other forms of aid to those with financial need,
The amount of money in a student account after expenses have been charged.
An organization that tracks credit histories and issues credit reports. There are three main credit bureaus in the United States: Experian, Equifax and TransUnion.
See credit report
See credit score
A very detailed snapshot of an individual’s financial history.
A three-digit number ranging from 300 to 900 that reflects a statistical assessment of a person’s probable ability to repay a loan or debt, sometimes called a FICO score. The credit score is based on many factors such as debt-to-loan ratio, timely payments, outstanding loan amounts, credit card history and the type of loan(s) the person has. Bankrate.com has a credit score estimator.
A term used to describe an individual whose track record of timely repayments on debts indicates that he or she is likely to continue to manage future credit obligations well.
A state form required by many employers who hire people (including students) to work with children.
A supplement to the CSS Financial Aid PROFILE application used to collect financial information from self-employed parents, or from parents who own any part of a business or farm.
An online financial aid application produced by the College Board’s College Scholarship Service (CSS) and used by private institutions such as MIT to award their institutional financial aid. The CSS Financial Aid PROFILE gathers the information required to determine need and eligibility according to the 568 Consensus Approach.
The failure of a borrower to repay according to the terms agreed to when the promissory note was signed. Default can also occur when a borrower fails to submit requests for deferment or cancellation.
A temporary suspension of a borrower’s monthly loan payment. There are several specific conditions that can qualify a borrower for deferment, including financial hardship, enrolling in a degree program at least half-time, or serving in the military or Peace Corps. For details, see the financial aid guide published by the U.S. Department of Education.
A term to describe someone, usually a borrower, who does not make the required payment by the due date.
The failure to make scheduled monthly loan payments when they are due.
The difference between the budget and the family contribution.
As a financial term this, refers to whether an individual relies on another person, usually parent(s) or a spouse, for financial support. Many private institutions such as MIT consider all undergraduates to be dependent on their parents for purposes of awarding institutional aid. All graduate students are automatically considered to be independent for financial assistance purposes. See the U.S. Department of Education’s definition of dependency status.
A check by the U.S Department of Education of a person’s record with the U.S. Department of Homeland Security (DHS) to confirm the registration status of eligible non-citizens who are applying for student loans.
A secure electronic way to transfer employees’ salary payments into an account at the U.S. financial institution of their choice. All MIT employees, including students, are required to use direct deposit for their MIT wages.
Payment of money, such as financial aid. Disbursement of financial aid to the student account is contingent on enrollment and can only be made once a student’s registration status and other requirements are confirmed for each semester.
A statement showing the terms of a loan, including the payment schedule and monthly payment amount.
In the context of financial aid, a person who gives money toward either an endowed or an expendable scholarship fund.
A check by the U.S Department of Education with the U.S. Department of Justice to see if a loan applicant has a drug conviction. Students who fail this match must attend an approved drug rehabilitation program to be eligible for federal financial aid.
A U.S. Citizenship and Immigration Services form that all U.S. employers are required to collect once from all employees, including U.S. citizens, no later than the first day of work. The employee must substantiate the information on the form through an original document that establishes their eligibility for employment in the United States such as a passport, Social Security card, copy of a birth certificate, etc.
A co-signer on a promissory note who is liable for repayment of a loan should the borrower fail to repay.
A perpetual fund created by a donor that is commingled with the institution’s overall endowment and provides income that must be used for scholarship assistance.
The amount of student financial aid the student may expect from federal, institutional, private and state sources, including grants, scholarships, student loans or need-based work programs. This figure is used when the school approves an education loan application.
The amount that parents and students are expected to contribute toward the student’s college expenses. For undergraduate financial aid, MIT computes the family contribution using the 568 Consensus Approach. For federal student financial assistance for undergraduate and graduate students, MIT computes the family contribution using the Federal Methodology.
A fund created by a donor to provide a specific amount of scholarship money to be used on an annual basis.
A plan that allows loan repayment to be extended over a longer period of time than originally agreed to – often 12 to 30 years, depending on the total amount borrowed.
Once you have your award notification, you may have some questions. Please take the time to read through Financing Your MIT Education where you will find many facts about financial aid at MIT.
If your student account has been overpaid, the fastest way to get your refund is through MITPAY’s direct deposit option. You can sign up for direct deposit on MITPAY at any time. Your refund will be deposited into your bank account within two-business days after being processed. If you are graduating this spring, make sure that we have your correct banking information in MITPAY so that we can return funds to you, even after you leave campus.