Academic Year

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.

Acceleration

Demand for immediate repayment of the entire unpaid amount of your loan.

Accrue

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.

Award Letter

A letter from your school that details your federal, state, institutional and private student financial aid.

Borrower

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.

Consolidation

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.

Credit Bureaus

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).

Credit Score

A number reported by credit bureaus and used by lenders to determine whether to lend you money, and what interest rate to charge you.

Credit Report

A collection of information about you and your credit history, kept by the three major credit bureaus.

Debt Consolidation

When a borrower contracts a third party company to manage his/her unsecured debt.

Debt-to-Income Ratio

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.

Default

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.

Deferment

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.

Delinquency

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.

Direct Loan

See William D. Ford Federal Direct Loan (Direct Loan) Program.

Disbursement

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 Loan(s)

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

• Eligible loans for the IBR plan are Direct Loan and FFEL Program loans other than: (1) a loan that is in default, (2) a Direct or Federal PLUS Loan made to a parent borrower, or (3) a Direct or Federal Consolidation Loan that repaid a Direct or Federal 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 ICR plan are Direct Loan Program loans received by an eligible new borrower other than: (1) a loan that is in default, (2) a Direct PLUS Loan made to a parent borrower, or (3) a Direct PLUS Consolidation Loan (these are Direct Consolidation Loans made based on an application received prior to July 1, 2006 that repaid Direct or Federal PLUS Loans made to a parent borrower). FFEL Program Loans, Federal Perkins Loans, HEAL loan or other health education loans, and private education loans are not eligible for the ICR plan. A Direct Consolidation Loan made based on an application received on or after July 1, 2006, including loans that repaid a Direct or Federal PLUS Loan made to a parent borrower, is eligible for the ICR 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 Pay As You Earn plan are Direct Loan Program loans other than: (1) a loan that is in default, (2) a Direct PLUS Loan made to a parent borrower, or (3) a Direct Consolidation Loan that repaid a Direct or Federal PLUS Loan made to a parent borrower. FFEL Program Loans, Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible for the Pay As You Earn plan. To access information on all of your federal student loans, check the National Student Loan Data System 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).

FAFSA

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

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. For the purposes of these repayment plans, your family size may be different from the number of exemptions you claim on your federal income tax return.

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.

FFEL

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.

Financial Need

The cost of attendance minus your expected family contribution.

Forbearance

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.

Grace Period

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).

Grant

Student grants are monetary gifts to people who are pursuing higher education. Unlike student loans, grants do not require repayment.

Gross Income

Your total income before deductions.

Half-Time Enrollment

The minimum hours or credit hours you need to be enrolled to be eligible for a federal student loan.

Holder

An entity that holds your loan promissory note and has the right to collect from you. Many banks sell loans, so the initial lender and the current holder could be different. If you have a Direct Loan, your loan holder is the U.S. Department of Education.

Income-Based Repayment

The Income-Based Repayment (IBR) plan is a repayment plan with monthly payments that are limited to 15 percent of your discretionary income. Discretionary income for this plan is the difference between your adjusted gross income and 150 percent of the poverty guideline amount for your state of residence and family size, divided by 12. To initially qualify for IBR and to continue making income-based payments under this plan, you must have a partial financial hardship (see definition).

Interest

The cost of borrowing money, charged as a percentage (interest rate) of the outstanding (unpaid) principal balance.

Interest Rate

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/Pay As You Earn/ICR Request, 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.

LIBOR

The London Interbank Offered Rate (LIBOR) is the average interest rate paid on deposits of US dollars in the London market.

Loan

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).

Loan Forgiveness

The cancellation of a loan debt under various loan forgiveness programs.

Loan Modification Agreement

Temporary or permanent restructure of a mortgage loan.

Loan Period

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.

Loan Servicers

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.

Loan Term

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.

Minimum Balance

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.

On-time

Payment made within 15 days of the scheduled due date.

Parental Contributions

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.

Payroll Deductions

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.).

Perkins Loan

A loan made under the Federal Perkins Loan Program for students with exceptional financial need. Perkins Loans are administered by the school.

PLUS Loan

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

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.

Prepaid Tuition

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.

Prime

The interest rate banks charge their most creditworthy commercial customers.

Principal

The loan amount plus any capitalized interest added to the loan.

Rehabilitated 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.

Repayment

To pay back money you borrowed by making scheduled payments to a loan servicer.

Repayment Plan

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.

Servicer(s)

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. A federal loan servicer is a loan servicer for the U.S. Department of Education. If you have a Direct Loan, you will be assigned a federal loan servicer.

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).

Student Loan

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

Subsidized Loan

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.

Tax Credit

Reduces the taxes owed.
Tax - Tax Credit=Taxes Owed
$1000 - $250 = $750

Tax Deduction

Reduces taxable income.
Income - Deduction=Taxable Income
$45,000 - $5,000 = $40,000

Taxable Income

Adjusted Gross Income minus any applicable deductions or exemptions.

Tax Return

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.

Unsubsidized Loan

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.

Voluntary Payment

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

The William D. Ford Federal Direct Loan Program (Direct Loan Program) and the Federal Family Education Loan Program (FFEL Program) generally have the same terms and conditions. The major difference between the two loan programs is the source of the loan funds. Note: The FFEL Program ended July 1, 2010 and no new loans have been made under the FFEL Program after that date.

Withholding

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.)