| A | B |
|---|
| Bankruptcy | A person is declared bankrupt, when found to be legally insolvent and the person’s property is distributed among creditors. |
| Campus Based Aid | Financial aid programs administered by the university. The Perkins Loan Program is an example of campus – based aid. |
| Consolidation | When a borrower consolidates, a lender pays off all of the loans the borrower includes in their consolidation loan and in turn issues a new, single loan for the total amount. |
| Cost of Attendance (COA) | The total cost of attending a post-secondary institution for one academic year. |
| Default | A loan is considered to be in default when a borrower fails to make a payment on the loan for 270 consecutive days after a payment due date. |
| Deferment | An agreement with a lender under which a borrower may temporarily suspend loan payments if they meet certain conditions. If a loan is subsidized, the Federal Government pays the interest on the loan during any granted deferment periods. |
| Delinquent | When a borrower’s loan payment is late or missed according to the terms of the promissory note. |
| Disbursement | When the lender cuts a check on a Federal Loan and releases funds to the school on behalf of the borrower or parent. |
| Enrollment status | An indication of whether a student is a full-time or part-time student. |
| Entrance/Exit Interview | Required counseling sessions that borrowers must attend before they receive their first loan disbursement (entrance interview) and again before they leave school (exit interview). |
| FAFSA Form (the Free Application for Federal Student Aid Form) | The Federal form used by student loan borrowers when applying for Federally guaranteed student loans. |
| FDLP (The William D. Ford Federal Direct Loan Program) | Stafford, PLUS loans and Consolidation Loans are available directly from the federal government. |
| FFELP (The Federal Family Education Loan Program) | Stafford, PLUS, and Consolidation Loans that are financed by private lenders and guaranteed by the federal government. |
| Financial Aid | A combination of scholarships, loans, grants, and work-study programs provided by Federal and state governments to help students meet the cost of a college education. |
| Forbearance | An agreement the borrower enters into with the lender to postpone their repayment obligation for a time.Interest continues to accumulate during any granted forbearance periods. |
| Grace Period | For Federally guaranteed loans, this is the period between the time a borrower leaves school (through graduation or dropout) or drops below half-time study and the time that they are obligated to begin repaying their loan(s). |
| Graduated Repayments | Loan repayment that is lower at the beginning of the repayment term and generally increases during third or fifth year of the repayment term. |
| Guarantee Fee | An insurance premium deducted from the borrower’s loan proceeds prior to disbursement and paid to the guaranty agency that insures the loan. |
| Guarantor/Guarantee Agency | A national or state agency that insures a student loan. |
| Interest | This is the fee charged for use of money. The interest is calculated as a percentage of the principal balance. |
| Itemization | One invoice which includes billing for several loans. Depending on the loans being billed, they may have one or more variable rates. |
| Lender | The lender is the actual source providing the loan funds being borrowed. |
| Loan Servicer | Loan servicers are contracted by lenders to manage the day-to-day bill collection and payment processing of the loan on their behalf. |
| Parent Loans for Undergraduate Students (PLUS) | Federally insured loans for parents of dependent students. |
| Perkins Loans | Federally insured campus based loans funded by the federal government and awarded by the school. |
| Postsecondary | This term means “after high school” and refers to all programs for high school graduates, including programs at two and four-year colleges, and vocational and technical schools. |
| Prepayment | When a borrower pays a portion or the entire amount of principal before it is due. This may reduce the total amount of interest charged. |
| Promissory Note | The legally binding contract between a borrower and the lender. It contains the terms and conditions of the loan, including how the loan must be repaid. |
| Rehabilitation | After a borrower has made 12 consecutive monthly payments on time, the Department of Education will agree to reinsure the loan. |
| Repayment | The period when a borrower is repaying the principal and interest on borrowed money. |
| Subsidized Loans | This is a loan based on financial need where the Federal government pays the interest during the borrower’s in school, grace, and deferment periods. |
| Undergraduate Student | A degree-seeking student at a college or university who has not earned a first bachelor’s degree. |
| Unsubsidized Loans | This is a loan not based on financial need, and the Federal government does not pay any interest on the loan. The borrower is responsible for all interest from the date the loan is disbursed. |
| US Department of Education – (ED, DOE) | Government agency that administers several federal student financial aid programs. |
| Weighted Average Interest | It is calculated using a formula provided by the Department of Education, following strict Federal guidelines. It uses the current balances and interest rates and determines an interest rate that is exactly equal to what the borrower is currently paying on his/her loans overall. It is then rounded up to the nearest 1/8th % or 8.25%, whichever is less. |
