What Does Term Balance Mean for Financial Aid?
Navigate college costs: understand your term balance, how financial aid applies, and what your student account statement means.
A term balance in financial aid represents a student’s financial snapshot for a specific academic period, such as a semester or quarter. It reflects the total charges incurred for that period balanced against any payments or financial aid received. Understanding this balance helps students and families manage educational expenses and fulfill financial obligations, clarifying if funds are owed or if a credit is due.
Understanding the Term Balance
The term balance is the net amount calculated from specific charges and credits applied to a student’s account for an academic period. Charges include tuition, mandatory fees for services like technology or student activities, and room and board for on-campus residents. Specific courses might also incur lab fees or other specialized charges.
Before financial aid is applied, other credits can reduce the term balance. These may include direct payments made by the student or family, enrollment deposits, waivers for certain fees, or third-party sponsorships.
Applying Financial Aid to the Balance
Once charges and initial credits are established, various types of financial aid are applied to the student’s account. This process, known as disbursement, involves the institution receiving funds from sources like federal student loan programs, institutional grants, or private scholarships. The aid is sent directly to the school and credited against the student’s billable charges.
Financial aid funds are disbursed around the start of the academic term. Many schools disburse aid in two payments per academic year, usually at the beginning of the fall and spring semesters. Grants and scholarships are often automatically accepted and applied, while students may need to actively accept loans or work-study awards.
Interpreting the Resulting Balance
After all charges and financial aid have been applied, the resulting term balance indicates one of three financial scenarios for the student. A positive balance signifies that the total charges exceed the combined financial aid and other credits, meaning an amount is still due. This is the most common scenario where students or their families must make an out-of-pocket payment.
A zero balance indicates that the charges for the academic term have been fully covered by financial aid and other payments. Conversely, a negative balance means that the total financial aid and credits exceed the charges. This overpayment results in a credit balance, which is then due back to the student as a refund.
Resolving Your Term Balance
Resolving a positive term balance involves making a payment to the institution by the designated due date. Common payment methods include online options such as electronic checks (e-checks) directly from a bank account, or credit card payments, which may incur a convenience fee. Payments can also be made by mail using checks or money orders.
For those unable to pay the full balance at once, many institutions offer installment payment plans, allowing the total due to be spread across multiple smaller payments throughout the term. Missing payment deadlines can result in late fees. Unpaid balances can also lead to financial holds, preventing future course registration or the release of academic records.
When a negative balance results in a refund, institutions typically process these payments through direct deposit or by mailing a check. Federal regulations generally require schools to disburse credit balances within 14 days of the aid being applied to the account. While direct deposit is the fastest way to receive funds, checks may take longer to arrive. It is advisable to set up direct deposit with the institution to expedite refund receipt.