UNIT 2: Earning & Keeping Money | College, Career, & Taxes

Award Letter—This is the notification of a financial aid award. The letter lists the types and amounts of financial aid for which the student is eligible. To finalize the award package, the student must sign and return the award letter to the Financial Aid office.

Consumer - a person or organization that purchases a product or service

Cost of Attendance - The total amount it will cost you to go to school (includes tuition and fees, room and board, as well as personal expenses).

Effective Tax Rate - The actual rate you pay on your taxes, as a percentage of your overall income.

FAFSA - Free Application for Federal Student Aid

FICA taxes - Based on the Federal Insurance Contributions Act; tax withheld from employees' paychecks and matched by employers for Social Security and Medicare.

Financial Aid - Financial assistance for college or post-secondary education: scholarships, grants, fee waivers, and loans.

Grants - Financial Aid funds from colleges or the federal government, usually need-based aid, and do not need to be paid back.

Gross Pay - the total amount of an employee's earnings before deductions are taken out

I-9 Form - Employment eligibility verification form, used for verifying the identity and employment authorization of individuals hired for employment in the United States.

Marginal Tax Rate - tax rate that applies to the next dollar of taxable income within the system of tax brackets in a progressive tax system

Net Pay (Take Home Pay) - Amount of income left after taxes and deductions have been taken out.

Parent Plus Loan - Federal college loan borrowed and repaid by a parent on behalf of a dependent student. 

Paycheck Deductions (Voluntary) - Money withheld from a paycheck before it is taxed to pay for employer-provided programs such as 401K Retirement Plans, Health Insurance premiums.

Paycheck Withholding (Required) - Money that your employer takes out of your check to pay for taxes, such Social Security, Medicare, State and Federal Taxes.

Private Student Loans - Private companies rather than the government finance these. Since the government doesn't cap interest rates and fees for these loans, they cost more than federal loans.

Progressive Tax System - a tax whose average tax rate increases as the taxpayer's income increases and decreases as the taxpayer's income decreases

Room and Board - The cost of housing and food while attending college or career school.

Scholarships - Financial aid that is awarded for merit or talent. These funds do not have to be paid back.

Subsidized Student Loan (Federal) - A need-based loan from the federal government, the interest of which is paid for by the U.S. Department of Education while the borrower is in school and during grace and deferment periods.

Tax Bracket - A range of income on which a given marginal tax rate is applied

Tuition - A sum of money charged for teaching or instruction by a school, college, or university.

Unsubsidized Student Loan (Federal) - This is a type of federal student loan on which the government does not pay the interest that accrues while a student is in school.

W-2 Tax Form - A form that an employer must send to an employee and the Internal Revenue Service (IRS) at the end of the year that reports your earnings and your taxes withheld in that year.

W-4 Tax Form - An employment form required by law that you complete so that your employer can determine the proper amount to withhold from your paycheck for taxes.

Work Study - A federal financial aid program that allows students to work part-time while continuing their studies.

YTD (on a paystub) - year-to-date ; amount you have earned or paid in the year so far