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Common Financial Terms

We understand that you may be new to financial aid lingo, so we’ve broken down frequently-used terms to empower you as you make these important decisions.


When you’re a high school senior, the first step in applying for grants, federal work–study, need-based scholarships, and student loans will be to complete the Free Application for Federal Student Aid (FAFSA) at The FAFSA is required each year for UT, federal, and state awards, including the HOPE Scholarship.


This tool gives you a free early estimate of your eligibility for federal student aid to help you plan ahead for college. Visit


This is an estimate of your educational expenses for an academic year and is the sum of your estimated key costs and estimated personal expenses. This is not the same as a bill, which is how much you owe to UT after subtracting your financial aid from your key costs. All schools are required to provide students with a cost of attendance, and it’s used to determine how much financial aid you can receive each academic year. For UT’s cost of attendance, visit One Stop Student Services.


This is money given directly to you if your financial awards (scholarship, grants, loan, etc.) are more than your key costs. You can use this refund for estimated personal expenses.


These are expenses that will appear on your bill, such as tuition, fees, campus housing, your meal plan, and books, course materials, supplies, and equipment that may be required for classes.


EFC is a number based on your family’s income, assets, and benefits and is calculated from the information you report on your FAFSA or FAFSA4caster. Schools use the EFC to determine your eligibility for federal and other financial aid.


These are often reserved for students with the highest financial need and do not have to be repaid. The EFC number generated by your FAFSA helps determine your eligibility.


These are estimated costs associated with going to college, such as transportation, miscellaneous personal expenses, and loan fees. These are for budgeting purposes only and will not appear on your bill.clear]


These help students and parents cover education expenses. All loans must be repaid; many programs, however, feature low interest rates, income-driven repayment plans, and tax-deductible interest payments. Some loans are based on financial need.

Direct Subsidized Loans are administered by the US Department of Education and offer competitive interest rates, which are determined by federal law. The Department of Education pays the interest on this loan while you are in school and for the first six months after graduation.

Direct Unsubsidized Loans are administered by the US Department of Education and offer competitive\ interest rates, which are determined by federal law. You are responsible for paying all of the interest. You can choose to begin payment on your loans and their interest early with no penalty.

Parent PLUS Loan, a credit-based federal loan, is an option for eligible parents of dependent students. If the loan is approved, the Department of Education will notify UT, and the loan will be added to your financial aid award. Parents are responsible for all repayments and interest.

Alternative student loans are made through private lending institutions. We encourage students to look into federal loan programs before applying for a private loan. If you’re ineligible for federal loans or you’ve exhausted government sources, private loans can help pay for your remaining educational expenses.

Visit the loan repayment calculator at Federal Student Aid to view how your loan repayment plan might look following graduation.


These tools provide a personalized estimate of your financial aid and college costs. Use the information from the FAFSA4caster to get an estimate at One Stop Student Services.


These do not have to be repaid. They are awarded based on either merit or financial need, and some are renewable for up to four years. For more on UT scholarships, visit One Stop Student Services.


This program allows eligible students to earn funds to cover part of their education expenses by working part time. The program awards UT students an average of $3,000 a year, which students receive through a biweekly paycheck. The exact amount you receive is determined by your award amount and how many hours you work. For more information on work–study at UT, visit One Stop Student Services.