“How to Pay” Definitions

Cost of Attendance (COA) – Includes tuition and fees, room and board, books and supplies.

Merit Scholarship – Grants offered by some (but not all) schools based on student’s incoming grades and/or standardized test scores. Awarded to students in the top ~25% of incoming class.

Needs-Based Grants – Grants (not loans or work study) awarded based on financial need.

Private Scholarships – Scholarship awards that come from sources other than the college.

Total 529 Savings Plan – 529 savings in the parent’s or student’s names only.

Parent Pledged Assets – Any non-529 assets (e.g., savings, investments) that parents have set aside for the student for college.

Parent Pledged Monthly Cash Flow – Annualized amount of monthly cash flow that parents will divert to fund college.

American Opportunity Tax Credit – Maximum annual $2,500 tax credit per student often claimed on parent’s tax return. Income limits apply.

Student Pledged Assets – Student’s savings and/or investments that will go towards college

Student Pledged Monthly Cash Flow – Annualized amounts typically from work study or part-time jobs.

Grandparent and Other help – Amounts paid from 529s, savings, investments, etc of non-immediate family members including grandparents, uncles, aunts, and possibly ex-spouses.

Pre-Approval Amount – Total funds for college other than grants and loans

Funding Gap – Net cost of college less Pre-Approval amount. Typically equal to the total amount of loans that will be needed.

Loans – Federal Direct Student Loans are based on FAFSA filings and awarded through the school. Federal Direct Parent PLUS loans are taken out by the parents. Perkins Loans program has been discontinued as of 2018.

Remaining Funding Gap – Difference between Net Cost and all sources of funding (incl loans).