A period of time schools use to measure a quantity of study. Contact your financial aid office for information on how your school defines Academic Year.
Demand for immediate repayment of the entire unpaid amount of your loan.
To accumulate interest on a loan.
Alien Registration Number
The alien registration number or "A-number" is an identifying number that U.S. Citizenship and Immigration Services (USCIS) assign to certain non-citizens. A-numbers may consist of 8 or 9 digits. The A-number is yours for life, much like a social security number. The A-number may be found on your green card.
Annual Percentage Rate (APR)
The actual yearly cost of borrowing money reflected as a percentage rate.
A letter from your school that details your federal, state, institutional and private student financial aid.
The individual who signed and agreed to the terms in the promissory note and is responsible for repaying a loan.
Capitalized Interest (Capitalization)
Unpaid interest that has been added to the principal balance of a loan. Future interest is charged on the increased principal balance.
The process of combining one or more loans into a single new loan.
Consumer Reporting Agencies
See credit bureaus.
Cost of Attendance (COA)
The total cost to attend school for the academic year, as determined by your school.
A credit bureau collects the credit information of individuals and makes it available to financial institutions, credit card companies, etc. Credit bureaus are also known as consumer reporting agencies (CRAs).
A number reported by credit bureaus and used by lenders to determine whether to lend you money, and what interest rate to charge you.
A collection of information about you and your credit history, kept by the three major credit bureaus.
When a borrower contracts a third party company to manage his/her unsecured debt.
The amount of debt compared to your overall income. Lenders use this ratio when determining whether to lend you money. A low debt-to-income ratio is more desirable.
Failure to repay a loan according to the terms agreed to. For the FFEL and Direct Loan programs, your loan is in default if you fail to make a payment for 270 days, if you repay monthly (or 330 days, if your payments are due less frequently). Your lender is required to report the default to at least one national credit bureau.
Allows you to temporarily stop making payments on your federal student loans. You are not charged interest on subsidized loans during deferment. Interest will continue to be charged on your unsubsidized loans and PLUS loans.
You become delinquent on a loan if you don't make a payment when due. Your lender is required to report the delinquency to at least one national credit bureau.
See William D. Ford Federal Direct Loan (Direct Loan) Program.
A portion of a loan that is paid out from the school to the borrower by applying the funds to the student's account at the school or paying the borrower directly. Loans are paid out in one or more disbursements.
Eligible loans for the IBR plan are FFELP and Direct Loan Program loans other than: (1) a loan that is in default, (2) a Federal or Direct PLUS Loan made to a parent borrower, or (3) a Federal or Direct Consolidation Loan that repaid a Federal or Direct PLUS Loan made to a parent borrower. Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible for the IBR plan. To access information on all of your federal student loans, check the National Student Loan Data System at www.nslds.ed.gov.
Eligible loans for the Income Based Repayment (IBR) plan
All Direct Loan Program loans are eligible except (1) a loan that is in default, (2) a Direct PLUS Loan made to a parent borrower, (3) a Direct Consolidation Loan that repaid a Federal PLUS Loan or Direct PLUS Loan made to a parent borrower or (4) a Direct PLUS Consolidation Loan.
Loans made under the Direct Loan Program are Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans
- All FFEL Program loans are eligible except (1) a loan that is in default, (2) a Federal PLUS Loan made to a parent borrower, or (3) a Federal Consolidation Loan that repaid a Direct PLUS Loan or Federal PLUS Loan made to a parent borrower.
Loans made under the FFEL Program are Federal Stafford Loans (subsidized and unsubsidized), Federal PLUS Loans, and Federal Consolidation Loans.
Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible for the IBR plan. Your eligibility for the IBR Plan will be determined based on your total eligible loan debt and, if you are married and file a joint federal income tax return, your spouse's total eligible loan debt. To access information on your eligible loans, check NSLDS at www.nslds.ed.gov.
Expected Family Contribution (EFC)
Your Expected Family Contribution (EFC) is the number that's used to determine your eligibility for federal student aid. This number results from the financial information you provided in your FAFSA application. Your EFC is reported to you on your Student Aid Report (SAR).
Free Application for Federal Student Aid. The FAFSA is a form that must be completed annually to help determine your eligibility for federal student aid. For more information, or to complete a FAFSA online for free, visit FAFSA on the Web.
Family size includes you, your spouse, and your children (including unborn children who will be born during the year for which you certify your family size), if the children will receive more than half their support from you. It includes other people only if they live with you now, they receive more than half their support from you now, and they will continue to receive this support from you for the year that you certify your family size. Support includes money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs.
Federal Student Aid PIN
A number used in combination with your Social Security Number, name, and date of birth to identify you as someone who has the right to access your own personal information on Federal Student Aid Web sites.
Federal Family Education Loan (FFEL) Program. Federal student loans borrowed through private lenders and guaranteed by the federal government. FFEL Loans include the following types of federal student loans: Subsidized Stafford Loans, Unsubsidized Stafford Loans, Federal PLUS Loans and Federal Consolidation Loans.
The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Final Divorce Decree
Document prepared by the court that has been signed and notarized, setting forth the terms and conditions of the divorce.
Financial Aid Package
The types and amounts of financial aid (federal and nonfederal) a student is offered by the school to help pay educational costs.
The cost of attendance minus your expected family contribution.
Allows you to temporarily stop making payments or reduce your federal student loans' monthly payment. Interest will continue to be charged on your subsidized, unsubsidized and PLUS loans.
A period of time that generally begins on the day after a borrower graduates, leaves school, or drops below half-time enrollment and ends on the day before the repayment period begins. A borrower is not required to make payments during the grace period. Grace periods occur for:
- subsidized and unsubsidized loans made under the Direct Loan and FFEL programs (six-month grace period); and
- loans made under the Perkins loan program (generally nine-month grace period).
Student grants are monetary gifts to people who are pursuing higher education. Unlike student loans, grants do not require repayment.
Your total income before deductions.
The minimum hours or credit hours you need to be enrolled to be eligible for a federal student loan.
The holder of your FFELP loan(s) may be a lender or the U.S. Department of Education (the Department). The holder of Direct Loan Program loans is the Department. Your loan holder may use a servicer to handle billing and other communications related to your loan(s). If your loan holder uses a servicer, the term "holder" as used throughout this form may also refer to the servicer.
Income-Based Repayment (IBR) is one of several repayment plan options for borrowers of student loans made under the William D. Ford Federal Direct Loan (Direct Loan) Program or the Federal Family Education Loan (FFEL) Program. If you qualify for IBR, your required monthly payment will be an amount that is intended to be affordable based on your income and family size, and will be less than what you would have to pay under a 10-year Standard Repayment Plan.
The cost of borrowing money, charged as a percentage (interest rate) of the outstanding (unpaid) principal balance.
The percentage charged when you borrow money. See also Annual Percentage Rate (APR).
IRS Data Retrieval Tool
The IRS Data Retrieval tool is an easy and secure way to access and transfer tax return information directly onto the electronic IBR application, saving time and improving accuracy. If you do not use the IRS Data Retrieval Tool to provide tax information, you must provide your servicer(s) with a copy of your tax return or obtain an official tax transcript from the IRS.
The London Interbank Offered Rate (LIBOR) is the average interest rate paid on deposits of US dollars in the London market.
Money that you borrow and must repay with interest.
Loan Discharge (Cancellation)
The forgiveness of a loan debt under certain circumstances.
Loan Fee (Origination Fee)
A charge that occurs each time money is disbursed (paid out) to the borrower. The loan fee is charged as a percentage of the disbursement (gross), and reduces the actual amount received (net).
The cancellation of a loan debt under various loan forgiveness programs.
Loan Modification Agreement
Temporary or permanent restructure of a mortgage loan.
The portion of the academic year that the loan is requested for.
Loan Reference Number
An identifying number associated to a Direct PLUS Loan Request. Used by an endorser when completing a Direct PLUS Loan endorser addendum for a specific loan.
A company that collects payments on a loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a loan on behalf of a loan holder.
The time period over which you must repay the loan. The standard loan term for federal student loans is up to 10 years.
Master Promissory Note (MPN)
A binding legal document in which you promise to repay your loans and any accrued interest and fees. It also explains the terms and conditions of your loans. An MPN can be used to make one or more loans for one or more academic years, for up to 10 years, except in certain circumstances.
The minimum amount of money a bank requires you to keep in your account to avoid fees.
My Annual Taxable Income
You must list all taxable income you are receiving this year (i.e., income from employment, unemployment income, dividend income, interest income, tips, alimony). Do not report untaxed income such as Supplemental Security Income, child support, or federal or state public assistance.
If you would like to use your most recent AGI and it was not available through the IRS Data Retrieval Tool, enter your AGI next to Your Annual Taxable Income.
Note: If you filed a joint tax return, enter your joint AGI here and leave Your Spouse's Annual Taxable Income blank.
National Student Loan Data System (NSLDS)
The central database for student aid. NSLDS receives data from schools, guaranty agencies, the Direct Loan program, and other federal student aid programs.
Payment made within 15 days of the scheduled due date.
Money your parents give you to help pay for educational expenses. Not the Expected Family Contribution (EFC) from your FAFSA.
Partial Financial Hardship
A circumstance in which the annual amount due on all eligible loans at the time you enter repayment as calculated under the 10-year Standard Repayment Plan exceeds 15% of the difference between your Adjusted Gross Income and 150% of the poverty line income for your family size.
Amount withheld by an employer from employee's earnings. Some examples are: Federal Income Tax (withholding), Social Security, Medicare, State Taxes, Other Deductions (Health Insurance, Retirement Plan, etc.).
A loan made under the Federal Perkins Loan Program for students with exceptional financial need. Perkins Loans are administered by the school.
Direct PLUS Loans are loans for eligible graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools.*
Includes Direct PLUS Loans (made through the William D. Ford Federal Direct Loan Program) and Federal PLUS Loans (made through the Federal Family Educational Loan Program.**)
The Financial Awareness Counseling Tool does not display to students the PLUS Loans taken out by parents on their behalf.
* Graduate or professional students should exhaust unsubsidized and subsidized loans before taking out Direct PLUS Loans.
** The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Poverty guideline amount is the figure for your state and family size from the poverty guidelines published annually by the U.S. Department of Health and Human Services (HHS). The HHS poverty guidelines are used for purposes such as determining eligibility for certain federal benefit programs. If you are not a resident of a state identified in the poverty guidelines, your poverty guideline amount is the amount used for the 48 contiguous states.
A Section 529 plan. Prepaid tuition plans let you lock in future tuition rates at in-state public colleges at current prices and are usually guaranteed by the state.
The interest rate banks charge their most creditworthy commercial customers.
The loan amount plus any capitalized interest added to the loan.
A defaulted loan is rehabilitated if the borrower makes nine voluntary, reasonable, and affordable monthly payments within twenty days of the due date during ten consecutive months.
To pay back money you borrowed by making scheduled payments to a loan servicer.
A plan setup and agreed upon between a borrower and lender that determines the amount you pay each month and the number of payments you must make.
Satisfactory Repayment Arrangement
Agreement between the debtor and the account holder detailing the terms of repayment.
An organization that manages the loan, provides customer service, and collects loan payments on behalf of the loan holder.
Student Aid Report (SAR)
A summary of the information you submit on your Free Application for Federal Student Aid (FAFSA) that provides you with your Expected Family Contribution (EFC).
Money you borrow for school and must repay with interest.
Student Loan Debt Burden
Student loan debt burden is the portion of a student's monthly income dedicated to their student loan payments. The Consumer Financial Protection Bureau (CFPB) has the following categories for student loan debt burden:
- Low: Monthly payment less than 8% of monthly income
- Medium: Monthly payment between 8% and 14% of monthly income
- High: Monthly payment greater than 14% of monthly income
A federal student loan for which in some cases, a borrower is not responsible for paying the interest while in an in-school, grace*, or deferment period. Includes Direct Subsidized Loans (made through the William D. Ford Federal Direct Loan Program) and Subsidized Federal Stafford Loans (made through the Federal Family Educational Loan (FFEL) Program**.)
* Interest will be charged during your grace period, if your loan is first disbursed July 1, 2012 through June 30, 2014.
** The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Reduces the taxes owed.
Tax - Tax Credit=Taxes Owed
$1000 - $250 = $750
Reduces taxable income.
Income - Deduction=Taxable Income
$45,000 - $5,000 = $40,000
Adjusted Gross Income minus any applicable deductions or exemptions.
A form submitted to the Internal Revenue Service (IRS) and your state government on an annual basis reporting your income for the year.
Tax Withholding Allowances
An allowance an individual claims on a W-4 Form. A withholding allowance is mainly used to assist an employer in calculating the amount of income tax to withhold from an employee's paycheck.
A federal student loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Includes Direct Unsubsidized Loans (made through the William D. Ford Federal Direct Loan Program) and Unsubsidized Federal Stafford Loans (made through the Federal Family Educational Loan (FFEL) Program*.)
* The FFEL Program ended July 1, 2010 and no new loans have been made since that date.
Payment made directly by the borrower and does not include payments obtained by federal offset, garnishment of income or asset execution.
William D. Ford Federal Direct Loan (Direct Loan) Program
Student loans provided by the U.S. Department of Education to enable a student or parent to pay for education after high school. Eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Loans include the following types of federal student loans: Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Amount withheld by an employer from employee's earnings. Some examples are: Federal Income Tax (withholding), Social Security, Medicare, State Taxes, Other Deductions (Health Insurance, Retirement Plan, etc.)