Financial Aid

Grace period

For certain types of federal student loans, a period of time after you graduate, leave school, or drop below half-time enrollment when you are not required to make payments. You are responsible for paying the interest that accrues on unsubsidized loans during the grace period. If the interest is unpaid, it will be added to the principal balance of the loan (capitalized) when the repayment period begins.

Interest Rate

The percentage at which interest is calculated on your loan(s).

financial aid

any grant or scholarship, loan, or paid employment offered to help a student meet his/her college expenses. Such aid is usually provided by various sources such as federal and state agencies, colleges, high schools, foundations, and corporations.

Private Student loan

A non federal loan made by a lender such as a bank, credit union, state agency, or school.

Forbearance

A period during which your monthly loan payments are temporarily suspended or reduced. Your lender may grant you a forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. During forbearance, principal payments are postponed but interest continues to accrue. Unpaid interest that accrues during the forbearance will be added to the principal balance (capitalized) of your loan(s), increasing the total amount you owe.

Student Aid Report

A summary of the information you submitted on your Free Application for Federal Student Aid (FAFSA) form. You receive this report (often called the SAR) via email a few days after your FAFSA form has been processed or by mail within 7-10 days if you did not provide an email address. If there are no corrections or additional information you must provide, the SAR will contain your EFC, which is the number that's used to determine your eligibility for federal student aid

Delinquent Default

Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. If you default on a federal student loan, you lose eligibility to receive federal student aid and you may experience serious legal consequences.

FAFSA (Free Application for Federal Student Aid)

Financial aid from the federal government to help you pay for education expenses at an eligible college or career school. Grants, loans and work-study are types of federal student aid. You must complete the FAFSA form to apply for this aid.

FSA ID

The Federal Student Aid PIN was phased out on May 10, 2015. The PIN was an electronic personal identification number that served as a student's or parent's identifier to allow access to personal information in various U.S. Department of Education systems and acted as a digital signature on some online forms.

Cosigner

The act of signing for another person's debt which involves a legal obligation made by the cosigner to make payment on the other person's debt should that person default. Having a cosigner is way for individuals with a low income or poor/limited credit history to obtain financing.

Promissory note

The binding legal document that you must sign when you get a federal student loan. It lists the terms and conditions under which you agree to repay the loan and explains your rights and responsibilities as a borrower. It's important to read and save this document because you'll need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearances.

Gift aid

financial aid that does not require repayment, such as student grants and scholarships.

Loan Servicer

A company that collects payments, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a lender. If you're unsure of who your federal student loan servicer is, you can look it up in "My Federal Student Aid

Deferment

A temporary postponement of payment on a loan that is allowed under certain conditions and during which interest generally does not accrue on Direct Subsidized Loans, the subsidized portion of Direct Consolidation Loans, Subsidized Federal Stafford Loans, the subsidized portion of FFEL Consolidation Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s

Expected Family Contribution (EFC)

This is the number that's used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your FAFSA® form, the application for federal student aid. Your EFC is reported to you on your Student Aid Report (SAR).

Standard repayment plan

is the basic repayment plan for loans from the William D. Ford Federal Direct Loan (Direct Loan) Program and Federal Family Education Loan (FFEL) Program . Payments are fixed and made for up to 10 years (between 10 and 30 years for consolidation loans).

Net cost

is the difference between total college costs and the entire financial aid package.

Graduated payments

mortgage loan, often referred to as GPM, is a mortgage with low initial monthly payments which gradually increase over a specified time frame.

Loan repayment amount

loan may be amortized over a specific period of time, requiring regular repayments. The repayments would be divided between the interest (i.e. the interest on the outstanding loan amount) and the principal repayment (i.e. the remaining amount of the periodic payment that is used to reduce the outstanding loan amount). At the same time, a loan term may be amortized over a longer period of time than the due date on the loan. In this case, a loan will require a "balloon repayment" (i.e. the amount of principal not yet repaid will be due in full at the end of the term). In either case, all payments on the loan are called repayments.

Subsidized loan

A loan based on financial need for which the federal government generally pays the interest that accrues while the borrower is in an in-school, grace, or deferment status, and during certain periods of repayment under certain income-driven repayment plans.

interest

A loan expense charged for the use of borrowed money. Interest is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.

Federal Student loan

A loan funded by the federal government to help pay for your education. A federal student loan is borrowed money you must repay with interest.

Principle

The total sum of money borrowed plus any interest that has been capitalized

Direct loan

A federal student loan, made through the William D. Ford Federal Direct Loan Program, that eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans are types of Direct Loans.

Unsubsidized loan

A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan.

Net price

An estimate of the actual cost that a student and his family need to pay in a given year to cover education expenses for the student to attend a particular school. Net price is determined by taking the institution's cost of attendance and subtracting any grants and scholarships for which the student may be eligible.