College Funding


American Opportunity Credit (AOC): The credit amount equals to 100% of qualified tuition and related expenses not in excess of $2,000 plus 25% of those expenses in excess of $2,000, but not in excess of $4,000. That makes the maximum credit $2,500. Qualified education expenses include tuition and fees, but not room and board. The credit is phased out for joint filers with modified adjusted gross income (AGI) between $160,000 and $180,000 in 2015 (same in 2014). For single filers the phase out is between $80,000 and $90,000 (same in 2014).

Board: Cost of dining hall meals. Most schools have several plans with varying costs.

Campus-based programs: The federal student aid programs administered by a school's financial aid office—the Perkins loan, Supplemental Educational Opportunity Grant, and the Work-Study program.

Cooperative education: A program offered at many schools combining periods of study with periods of paid employment, generally related to the student's major.

Expected family contribution: The dollar amount the family is expected to contribute for the year toward the student's cost of college attendance.

Federal Pell Grants: This is a federal program that is based on a student's financial need. The amount a student receives depends on the student's financial need, the cost of the college, length of the program, and if enrollment is full- or part-time. There is no repayment on a grant.

Federal Perkins Loan Program: This loan program is a campus-based program administered by colleges and universities. The interest rate on this loan is 5%. Repayment on this loan begins nine months after a student graduates or leaves school.

Federal Supplemental Educational Opportunity Grant Program (FSEOG): This is a campus-based program, which means that even though the money for the grant comes from the federal government, individual colleges and universities distribute money to students who demonstrate the most financial need. Once again, there is no repayment on a grant.

Federal Work-Study Program: A federal campus-based program. Colleges who participate in this program provide employment opportunities for students who are in need of financial assistance. Students are generally employed on campus and work part-time. The money that students earn at these jobs is used to cover college expenses. Some examples of these positions are library assistant, office secretary, faculty aide, dining hall worker, and groundskeeper.

Financial aid: Refers to programs funded by federal and state governments and by individual schools to help students with their educational costs. They consist of grants and scholarships, which do not have to be paid back, student loans, which do have to be paid back, and work-study jobs.

Free Application for Federal Student Aid (FAFSA): This application is available through your high school guidance office or a college financial aid office, or by calling 1-800-4-FED-AID (1-800-433-3243), or online at

Funding Education Beyond High School: The Guide to Federal Student Aid: This free pamphlet is published by the U.S. Department of Education and can assist you in figuring out the financial aid process. You can obtain your free guide by calling 1-800-433-3243, or online at

Lifetime Learning Credit: The credit equals 20% of the first $10,000 of qualified education expenses paid annually. It is available for any course work at a qualified educational institution that improves job skills. Only one Lifetime Learning credit is available to a taxpayer, regardless of the number of students incurring qualified tuition expenses. The credit is phased out for joint filers with modified adjusted gross income (AGI) between $110,000 and $130,000 in 2015 (between $108,000 and $128,000 in 2014). For single filers the page out is between $55,000 and $65,000 in 2015 (between $54,000 and $64,000 in 2014). The modified adjusted gross income amounts are adjusted annually for inflation.

Room: Housing in school dormitories that you pay directly to the school; other housing choices (apartments, fraternities and sororities) are not generally billed through the institution.

Subsidized Stafford Loan Program: This program allows students who are in financial need to borrow money from banks, credit unions, savings and loan associations, and educational organizations. Repayment on this loan is deferred until six months after a student graduates or leaves school.

The College Board: Students should contact the College Board at 212-713-8000 or online at for information on planning for college, finding the right college, and a host of other services.

Tuition: The charge for instruction that is used to pay salaries and to meet the operating costs of the institution.

Uniform Gift to Minors Account (UGMA) and Uniform Transfer to Minors Account (UTMA): A special account set up to transfer property to a minor child.

Unsubsidized Stafford Loan Program: This program is available for students who do not qualify for subsidized Stafford loans. The terms and interest rates are the same as the subsidized Stafford Loan. Repayment should begin when the loan is issued but can be deferred until 6 months after the student leaves school. However, interest begins to accrue as soon as the loan is issued.

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