Lock in current tuition rates by June 30th

Join our next webinar to learn how the Plan works

10 College Financial Terms to Know

By Jonathan Sparling

  • September 16, 2022
  • 4 min read


side view of woman sitting at computer

Are you in the middle of financial planning for college – or about to start? The whole process can be confusing, especially with an alphabet soup of acronyms to understand. Luckily, you have us to break down key terms. Keep this list handy as you start, or continue, your college financial planning.



FAFSA stands for the Free Application for Federal Student Aid. In some cases, it’s the only application you’ll need to apply for financial aid from the federal government, your state government, and directly from colleges.

The FAFSA is required by all colleges. And submission deadlines are typically in January or February, but possibly sooner if your student applies early action or early decision. Each year, the FAFSA opens on October 1 at – so get a jump on it early.



FSA ID stands for Federal Student Aid ID, and it’s your electronic signature for the FAFSA.

Dependent students and their parents need separate FSA IDs to complete the FAFSA. You can create your ID anytime, even before the FAFSA opens. You will need it before completing the application.


3. CSS Profile

The College Scholarship Service Profile, or CSS Profile for short, is a financial aid application used by nearly 250 colleges (as of 2022-2023) to determine eligibility for non-federal institutional aid. Most participating colleges are private.

Why do some colleges use it? The CSS Profile collects in-depth financial information from families. Unlike the FAFSA, colleges can add their own questions, allowing for more flexibility when determining eligibility.

The CSS Profile costs $25 for the first college and $16 for each additional college. It opens on October 1 for the upcoming year, just like the FAFSA.


4. SAI

SAI stands for Student Aid Index, a number used by colleges and universities to assess a family’s eligibility for financial aid. The term Student Aid Index (SAI) is replacing Expected Family Contribution (EFC) starting with the 2024-2025 FAFSA. Your SAI number is not what you’ll necessarily pay to attend college or how much financial aid you’ll receive. Rather, colleges and universities use the SAI to determine financial aid eligibility. It’s calculated using information reported on the FAFSA. Colleges that require the CSS Profile in addition to the FAFSA will use both applications to determine eligibility for all types of financial aid.


5. COA

The cost of attendance, or COA, is a college’s total cost for the academic year, including direct expenses (tuition, fees, and room & board) and estimated indirect expenses (travel, books & supplies, and miscellaneous or personal expenses).


6. Financial need

A student’s financial need, also referred to as financial aid eligibility, is determined by subtracting the family’s EFC from the COA. Colleges use this number to award need-based aid.

Since each college has a different COA, but your EFC is fixed, financial need will vary. And this may impact the amount of financial aid your student receives from each college.

See it in action:

College A has a COA of $50,000 and College B is $60,000. If a family has an EFFC of a $20,000, their financial need is $30,000 at College A ($50K-20K) and $40,000 at College B ($60K-20K).


7. Need-based financial aid

Financial aid awarded to students based on the financial need of the family is considered need-based. This type of financial aid can take many forms, including grants, scholarships, federal work-study, and subsidized loans. There are many different sources for need-based aid, like the federal government, state and local governments, colleges, or organizations that award private scholarships.


8. Merit-based financial aid

This type of financial aid is awarded to students based on special achievements in high school, ranging from sports to academics. Merit-based aid does not consider the family’s financial need in the awarding process, and not all colleges offer it. If you’re counting on football to help pay for college, check with schools first.


9. Sticker price and net price

Sticker price, also referred to as published price, is what the college lists. After discounting through grants and scholarships, what you actually pay is called the net price.

When comparing college acceptances based on cost, it’s important to use your net price, not the sticker price, for a more accurate apples-to-apples comparison.


10. Net price calculator

The net price calculator is a free tool all colleges must provide on their website so families can estimate net price. As a reminder, that’s what a family would pay for college verses the listed sticker price.

A college’s net price calculator may ask questions about family finances and the student’s high school academics, like GPA and test scores, or other activities and achievements.

Recommended for you

Our 529 Plan

Protect against rising tuition

Lock in tuition at hundreds of colleges nationwide. Guaranteed prepaid tuition with no fees and no state residency requirements to save.