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Ability to Benefit: Postsecondary institutions may not award federal aid to students without a high school or equivalency diploma unless the student has demonstrated that he or she can benefit from the education offered. This is accomplished by receiving a passing score on an independently administered test approved by the Department of Education.

Academic Credit: The unit of measurement an institution gives to a student when he/she fulfills course or subject requirement(s) as determined by the institution.

Academic Year (AY): This is a measure of the academic work to be accomplished by a student. The school defines its own academic year, but the federal regulations set minimum standards to determine federal financial aid awards. For instance, the academic year must be at least 30 weeks of instructional time in which a full-time student is expected to complete at least 24 semester or trimester credit hours or 36 quarter credit hours or 900 clock hours.

Adjusted Available Income (AAI): The portion of family income remaining after deducting federal, state, and local taxes, a living allowance, and other factors used in the Federal Need Analysis Methodology.

Adjusted Gross Income (AGI): All taxable income as reported on a U.S. income tax return.

Advanced Placement (AP) Program: A series of examinations demonstrating a students proficiency in a subject area, for which some postsecondary institutions offer credit. The examinations are administered nationally by subject area, much like the SATs.

AmeriCorps: See National and Community Service.

Assets: Cash on hand in checking and savings accounts; trusts, stocks, bonds, other securities; real estate (excluding home), income-producing property, business equipment, and business inventory. Considered in determining Expected Family Contribution (EFC) under the regular formula.

Associate Degree: A degree given for successful completion of some courses of study at a two-year college.

Award Letter: A means of notifying successful financial aid applicants of the assistance being offered. The award letter usually provides information on the types and amounts of aid offered, as well as specific program information, student responsibilities, and the conditions that govern the award. Generally provides students with the opportunity to accept or decline the aid offered. Adhering to deadlines included in award letters is vital.

Award Year: The period of time between July 1 of one year and June 30 of the following year.