Glossary of Terms

As you go through the financial aid process, it may appear that we’re speaking another language – without a doubt, financial aid has its own lingo. To help you understand, here’s a guide to some of the most commonly used terms and abbreviations.

100% Demonstrated Need

The gap between the cost of attendance and the calculated expected family contribution.  The calculated expected family contribution is calculated by the Lehigh Office of Financial Aid using the CSS PROFILE and all application materials, and is met through a combination of grants, scholarships, work study and loans.

Cost of Attendance (COA)

This is the combination of direct costs of attendance such as tuition, fees, room and board, as well as indirect costs such as transportation, books, supplies, personal expenses, loan-related expenses or student disability-related expenses.


The College Scholarship Service (CSS) Financial Aid PROFILE application is an additional step you need to take to apply for aid at Lehigh. You can register for this service and complete the form electronically at There is a fee for the application and some students may qualify for a waiver through


Failure to repay a loan according to the terms of the promissory note. For a loan repayable in monthly installments, a loan is in default after 270 days of no payment.

Default Fee

A default fee is used by the guarantor to maintain reserve funds to reimburse lenders if a student/parent borrower fails to repay a loan (defaults.) Therefore, guarantors may charge a 1% fee.


The temporary postponement of loan payments for a limited period of time. Deferments, allowed for specific borrower activities, extend the loan repayment period by the length of the deferment period.

Direct Lending

The U.S. Department of Education (the Department) is the lender rather than a bank or other financial institution. Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school.


The release of financial aid funds to individual student accounts. Funds are disbursed when the student's financial aid file is complete and registration has been verified.

Expected Family Contribution (EFC)

This is the amount that a family is expected to contribute toward the student’s cost of attendance and includes both the parents' contribution and the student’s contribution. The CSS/Profile and FAFSA may calculate different EFCs. The FAFSA EFC is used to determine federal eligibility, while a combination of CSS, FAFSA and institutional policies determines the EFC for institutional funds.


The Free Application for Federal Student Aid (FAFSA) is a required application for all students. To complete this form, go online to

Financial Aid Notification (FAN)

The offer of financial aid prepared by the Office of Financial Aid after completing a needs analysis. The award letter lists the types and amounts of aid offered and the terms and conditions of that aid. The letter also contains the necessary paperwork that must be completed and returned to the Office of Financial Aid to accept the aid offered. We typically include special information or messages regarding the needs analysis process on the back of the award letter.

Financial Need

The difference between the cost of attendance and a student's (and family's) calculated expected family contribution.


An arrangement to postpone or reduce a borrower's monthly payment amount for a limited and specified period, or to extend the repayment period. The borrower is charged interest during forbearance. Forbearance is usually granted at the discretion of the lender to borrowers ineligible for a deferment.

Gift Aid

Generic term referring to grant and scholarship sources of financial aid.


The amount of money received from any or all of the following: wages, interest, dividends, sales or rental of property or services, business or farm profits, certain public assistance programs, disability, inheritance, gambling or contest winnings, retirement benefits and other types of taxable and nontaxable income.

Independent Student

For Federal aid purposes, an independent student must meet any one of the following criteria as defined by the federal government: 24 years of age; married; have status of a graduate or professional student; have legal dependents other than a spouse; be an orphan or ward of the court (or have been a ward of the court until age 18), or be a veteran.

For Institutional aid purposes, a student is dependent regardless of the responses to the dependency questions on the FAFSA. A counselor may determine that the student can be considered independent based on their ability to financially support themselves (and in some cases, a family). Regardless of their age, a student must prove financial dependency from their parents by providing copies of their tax returns and bills that are in their (or their spouse’s) name.

Interest Rate

The cost paid to borrow money. This rate may be fixed or variable.


An entity offering loans to students; it can be a private company or bank, the government or an educational institution.

LU FileSender

Lehigh’s online service to send large files (such as applications and tax documents) to the University. You can access LU FileSender here.

Master Promissory Note (MPN)

A binding, legal document that you must complete for your student loan. The MPN can be completed via the web or will be mailed directly from the federal Department of Education to your permanent home address. By signing the MPN, you are allowing Lehigh University to award your student loans for multiple years based upon that one application. You only need to complete one MPN during your educational career at Lehigh.

Merit Aid

At Lehigh, we offer a limited number of merit-based scholarships to incoming freshman, which are available to students with outstanding talents and extraordinary academic promise. When awarding merit aid, the Office of Admissions takes a holistic approach, looking beyond the numbers related to academic talent alone. They look at what a student contributes outside the classroom and also consider recommendations and personal essays.

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.

Need-based Aid

Financial aid resources which are determined based on family income, assets and other household factors.

Need-blind Admissions

During the admissions process, Lehigh does not consider the family's ability to cover tuition when making admissions decisions. (It is only during the waitlist period that Lehigh considers financial circumstances, among other factors.)

Noncustodial Parent

In the case where legal parents are not married and do not live together, the non-custodial parent is the parent with whom a student did not live with the most during the past 12 months, or in the case of split custody, the parent who did not provide the most financial support during the past twelve months. The noncustodial parent will be considered in the calculation of financial aid, regardless of any previous arrangement between parents.

Origination Fee

A fee charged by the federal government and deducted from the loan proceeds before disbursement to help reduce the cost of supporting low-interest loans; currently assessed on Federal Direct Loans, but not on the Federal Perkins Loan.

Outside Scholarship

Often referred to as outside or external scholarships, these scholarships are private scholarships offered by organizations outside of Lehigh. A student's need-based financial aid eligibility may change due to receipt of an outside scholarship.  View our policy.

Satisfactory Academic Progress (SAP)

You need to make satisfactory academic progress in order to continue receiving financial aid. In other words, you have to make good enough grades, and complete enough classes (credits, hours, etc.), to keep moving toward successfully completing your degree or certificate in a time period that's acceptable to your school.


Is the portion of the student’s aid that he or she will need to repay, e.g., a loan or work in order to earn the funds.


A company employed by a lender or the federal Department of Education to perform administrative tasks involved with loans, such as the processing of deferments and collection of payments.

Subsidized Direct Loans

Based on need, the government pays interest that accrues while the student is in school.

Title IV Funding

The programs authorized under Title IV of the Higher Education Act are the major source of federal student aid. Title IV programs include: Direct Loans; Federal Perkins Loan; Federal Pell Grant; Federal Supplemental Educational Opportunity Grant, and Federal Work Study.

Unsubsidized Direct Loans

Not based on need, the student is responsible for interest that accrues during school.

"The best part of work study is getting to know all of the people I work with.  Without them, I could never enjoy my job as much as I do.  I love working in admissions and getting to know both the people in the office and prospective students and their families." – Katie Barr ‘18