FINANCIAL AID GLOSSARY

A period of at least 30 weeks of instructional time during which an undergraduate full-time student is expected to complete at least 24 semester hours or 36 quarter hours or 900 clock hours.

Interest on student loans typically begins accumulating as soon as the loan is disbursed. The borrower is responsible for paying all accrued interest. Certain federal subsidized loans do not accrue interest while in specific statuses.

Your income after certain allowable adjustments from your total income. This figure is used to calculate a borrower's monthly student loan payment under income-dependent repayment plans.

A percentage that represents the total annual cost of a loan, including all fees and interest.

A payment that is made through authorized, direct withdrawals (debit) from a checking or savings account.

The individual who receives a loan and is obligated to repay the debt, even if the loan was taken out on someone else's behalf, as in the case of a parent borrowing a PLUS loan to pay for a dependent student's education.

The unpaid interest that accrues on a loan and is added to the principal balance.

The process of combining multiple loans into one new loan with a single interest rate, all in one monthly payment.

The total amount it will cost a student to go to school for the academic year. It includes tuition and fees, room and board (or housing and food for off-campus students), and allowances for books, supplies, transportation and miscellaneous expenses. The financial aid administrator at the school can increase the cost of education to allow for certain unusual expenses – such as medical expenses, child care costs, etc. – at the student's request. Documentation may be required.

An agency that rates the ability of an individual to manage credit and repay debt, based on debt and payment information provided by groups like utility companies and banks. Whether that person is considered a good or bad credit risk determines their ability to obtain future credit and loans and often impacts their cost of borrowing money.

A credit score is a statistical number derived from an analysis of a person's credit files that is used to represent the creditworthiness of that person. A credit score is primarily based on credit report information typically sourced from credit bureaus.

Borrowers who do not make monthly payments as scheduled and do not make special arrangements with the servicer/lender to suspend their payment (see deferments and forbearances), will default after the loan payment is late for so many days. Each loan program may have different standards as to the consecutive number of days the borrower can be late before entering default.

Deferment allows you to temporarily stop making payments or to temporarily reduce your monthly payment amount for a specified period on a student loan. Subsidized federal student loans do not accrue interest while in deferment.

A borrower who fails to make a loan payment on time is considered to be delinquent. Lenders are required to follow due diligence procedures when payments are late. This delinquency may be reported to credit bureaus depending on the number of days the borrower is late on making a payment.

As it relates to financial aid through the Free Application for Federal Student Aid (FASFA), whether or not a student is considered dependent or independent which serves as a basis for determining whose income is used to calculate financial need and the amounts awarded as financial aid.

The DL Program is a federal loan program that includes subsidized Stafford Loans, unsubsidized Stafford Loans and Parent/Grad PLUS Loans. Funds for these loans are provided by the Department of Education. The student is the borrower of Stafford and Grad PLUS Loans, and the parent is the borrower (on behalf of the student) of Parent PLUS Loans.

A student loan has been disbursed when your lender sends money to your school, gives money to you directly or a combination of both. A single loan may have multiple disbursements, for example one payment for fall and one payment for spring.

Documented collection procedures used by lenders and servicers when student loan payments are delinquent.

A counseling session required before receiving your first student loan disbursement and again when you leave school or drop below half-time enrollment ensuring a student understands the terms and conditions of their loan and their rights and responsibilities. A student's school may have alternate entrance/exit counseling requirements. Check with school's financial aid office.

This figure is determined by a formula established by Congress and indicates the amount the student (and the student's family, if dependent) should contribute to the cost of education. This is based on taxable and nontaxable income, assets (such as checking and savings accounts), and benefits (such as Social Security or unemployment).

A loan repayment option for student loan borrowers who received their first Federal Family Education Loan (FFEL) Program loan or Direct Loan (DL) after October 7, 1998, and who have $30,000 or more in FFEL or DL loans. Under this plan, the repayment period can be extended up to 25 years, lowering monthly payments but increasing the total cost of the loan.

The Federal Family Educational Loan Program (FFELP) includes subsidized Stafford Loans, unsubsidized Stafford Loans, and Parent/Grad PLUS Loans. Funds for these loans are provided by private lenders. The student is the borrower of Stafford and Grad PLUS Loans, and the parent is the borrower (on behalf of the student) of Parent PLUS loans. Effective July 1, 2010, all Federal loans are made through the Department of Education's Direct Loan Program.

An office under the U.S. Department of Education that administers the federal student loan and grant programs.

The FICO score is the most commonly used credit score. 'FICO' comes from the Fair Isaac Corporation, which developed the scoring model. The score is used to predict the likelihood that a person will pay his or her debts.

Financial assistance intended to aid students in reaching their educational goals. This assistance may come in a variety of forms such as grants, scholarships, work-study, and loan programs.

The office on a college campus that is responsible for processing students' financial aid.

The total financial aid a student receives from an institution, which may include grants, scholarships, loans, and work-study.

This is determined by looking at the difference between the cost of attendance (COA) at a school and your Student Aid Index (SAI). The COA varies from school to school; however, your SAI does not change based on the school you attend. A student's financial need determines their need based aid eligibility for work-study, grants and certain loan programs.

A situation in which one cannot keep up with their debt payments. For student loans, if one demonstrates a financial or economic hardship they may be eligible for a forbearance, which pauses loan repayment.

An interest rate that does not change over the term of the loan.

A borrower who is willing but unable to make payments, and who does not qualify for a deferment, may request a forbearance from the lender or servicer. Forbearance allows temporary cessation of payments or lower payments for a specific length of time. The lender may grant forbearance of principal, interest or both. The borrower is always responsible for repayment of accrued interest charges. The borrower can make interest payments during forbearance; if not paid during forbearance, the interest will be capitalized (added on to the principal).

A program through which the lender/loan owner cancels all or part of a student loan. To qualify for loan forgiveness, borrowers must meet established criteria, including total and permanent disability; death; certain types of volunteer work; military service; teaching or medical practice in certain types of communities; or work in other occupations as specified by the forgiveness program.

The FAFSA (Free Application for Federal Student Aid), is the first step in the financial aid process. A student uses it to apply for federal student financial aid, such as grants, student loans and work-study. Most states and schools use FAFSA information to award financial aid.

An FSA ID is a StudentAid.gov account username and password combination that you create in order to gain access to the U.S. Department of Education's online systems, including the FAFSA application. An FSA ID can also serve as your legal signature when completing electronic documents therefore every student and contributor must have their own FSA ID.

A specific period of time after the student leaves school or is enrolled less than half time during which he or she is not required to make loan payments. The grace period is usually 6 to 9 months, depending on the loan type. Supplemental Loans for Students (SLS), Parent Loans for Undergraduate Students (PLUS) and consolidated loans do not have grace periods.

An unsubsidized federally-guaranteed education loan for graduate and professional students. As a graduate or professional student, you are not required to make any payments while enrolled in school at least half-time.

A federal loan repayment plan, under which the monthly payment starts out lower and increases every two years. This plan is a good option for borrowers who expect their income to increase during the repayment period.

Grants are financial aid that are typically not required to be repaid (aka “Gift Aid”). There are grants that have specific requirements to be met to receive and maintain; if these stipulations are not met or maintained, you may have to repay the funds. Grant funding is normally awarded to students with financial need.