Student Loans Glossary

A B C D E F G H I J L M N O P Q R S T U V W 

 

A

Academic Year – The duration which students are expected to complete a year of academic study. While each school defines the duration of its academic year, it is usually 30-weeks long. A full-time undergraduate learner should essentially complete at least 24 semester hours. It can also be one complete year at a certain school or two half years at separate schools.

Acceleration – A demand by loan programs for students to repay their loans immediately or as soon as possible. It applies when students spend the loan money on things other than school-related expenses.

Accreditation – This is confirmation that a certain college, university or school adheres to industry standards set by the Department of Education. Only accredited institutions are eligible to participate in loan programs extended by the federal government.

Accrue – The accumulation of interest on unpaid student loans.

Additional Eligibility – Between the 2009-10 and 2010-11 academic years, students were eligible for two Federal Pell Grants in a single academic year. The Additional Eligibility is a field on the Grant Detail Page that indicates whether students were eligible for double grants.

Adjusted Gross Income – Also referred to as AGI, it is an individual’s (or couple’s) total taxable income such as salaries, wages, interest and dividends among other earnings. It is minus specific deductions as captured in federal income tax returns.

Administrative Wage Garnishment – Also called AWG, it is a regulation that helps the federal government or some other agency to compel your employer to withhold part of your earnings so that it may collect unpaid debts. This amount is usually 15% of your total disposable payment.

Adverse Credit History – Students usually have a summary of their financial ability based on historical trends such as repayment of previous loans. You may qualify for adverse credit history assessment if you suffer any of these experiences.
• Deliberate surrender of personal property to evade repossession
• Bankruptcy within the last five years
• Collateral repossession within the last five years
• Commencement of foreclosure proceedings
• Conveyance of property subject to mortgage
• Delinquent accounts that are 90 days or older
• Accounts with unpaid collections
• Write offs or charge offs of student loans from the federal government
• Loan defaulting even if claims are paid
• Wage garnishment in the past five years
• Contract or lease terminated by default
• Federal, state or county tax lien in the past five years

Aggregate Debt – The total owed amount at the commencement of repayment–

Aggregate Loan Limit – A threshold on total amount of loans whether subsidized or unsubsidized that a student can borrow for either undergraduate or graduate levels. When you reach this predetermined mark at any time of your study, you become ineligible for further loans. However, you could lower your loan debt and qualify for additional borrowing until the same limit is reached again.

Agreement to Serve – This is a binding agreement in which you commit yourself to teach in return of a grant. You could either serve at a high-need school, a low-income one or an agency that serves low income schools. You could also serve for four academic years within double the time after completing your course. If you default the agreement by failing to complete the teaching service, the grants agency or federal government converts the teaching grant into an unsubsidized loan. You must therefore repay it with interest from the date the first installment was disbursed.

Alien Registration Number – Also referred to as an A-number, this is a number that non-citizens obtain from the Citizenship and Immigration Services of the US. It is usually 8-9 digits and is yours for life, just like a Social Security Number.

Annual Loan Limit – This is the maximum amount that a student can get from federal loan programs in each academic year. The limits are usually set by individual institutions and depend on type of loan and grade level among other factors.

Annual Percentage Rate – The yearly cost of obtaining student loans usually stated as a percentage rate.

Approved Drug Rehabilitation Program – It is any program that is approved to receive funds from local, state or federal government and any state-licensed insurance company. It is also a program that is both recognized and administered by a local, state or federal government, health center or medical doctor.

Associate Degree – After two years of study at a career or community college, an undergraduate student receives an Associate Degree.

Attending School – It is a field in a Federal Student Aid account that lists the name of the institution that the student learned and received federal student loans.

Athletic Scholarships – Funding for a student’s education based on his participation in competitive sports and achievement.

Award Amount – The amount that a certain institution expects to pay for your studies. It is based on your current eligibility for grant or loan, your family’s expected contribution, the school’s enrollment and cost of attendance.

Award Letter – A letter to a student from his or her school that indicates your state, federal, institutional or private financial aid for studies.

Award Year – Financial year for which financial aid is paid for your education. It is usually a 12-month year that commences on July 1 on a calendar year and ends on June 30 the following calendar year.

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B

Bachelor’s Degree – The award upon completion of any 4-year undergraduate academic program. These are usually awarded by colleges and universities.

Bankruptcy – An action under law to pardon debts and student loan repayment obligations. Students may take this action under the provisions of the Federal Bankruptcy Act or other relevant regulations.

Books Expenses – Schools’ determination of the general cost of your stationery. It may include transportation, supplies and personal expenses.

Borrower – Any student who obtains studying funds in form of a loan. The only formal commitment to pay is a signed promissory note.

Budget – A student’s spending amount planned for certain duration.

Bursar – University, college or school officer or office responsible for the management of money. The bursar is also responsible for the processing of student loan checks and other transactions such as electronic funds transfers.

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C

Campus-based Program – Any program that a university or college offers at a physical school. A campus-based loan is any funding that offices of the college finance office administer and award you as per federal requirements. Examples are Federal Supplemental Educational Opportunity Grant, Federal Perkins Loan and Federal Work-Study.

Cancellation – The release of your obligation, as a borrower of student to repay all or portions of loan principal or interest. It is also called forgiveness of a loan or a discharge.

Capitalization – Lenders can add unpaid interests to principal loan balances. As interest accrues over your in-school status, deferment, grace period and forbearance, your lender may call for capitalization of the interest. After capitalization, the outstanding principal amount due increases and so does your monthly repayment amount. The lender then charges interest on the new principal balance, effectively increasing the overall cost of the student loan.

Citizen Status – This is the status that you must have or attain for you to qualify for a US federal student loan. You must either be a
• U.S Citizen
• U.S National or native of Swain’s Island or Samoa
• U.S Permanent resident with a valid Alien Registration Receipt Card

Charged Off Account – Also referred to as a written off account, it is a debt that has been written off by a creditor but is still subject to collection.

Co-applicant – Someone other than the student who enters a loan agreement to enable a student who lacks enough credit score to qualify. Both people are legally obliged to repay the loan.

Collection Agency – An organization that agrees to collect delinquent of defaulted loans for a specified fee.

Collection Costs – Expenses that creditors charge on students who default on federal loans. These costs are added on the loan’s principal balance.

College Aid – Financial assistance from your career college.

Commuter Student – A student residing on other accommodation facilities other than the campus hostel. The term also applies to a student at an institution where no on-campus accommodation is available.

Consolidation – The conglomeration of several student loans into one. For consolidation to happen, the student must already be in the loan’s grace period or in the repayment phases. Consolidation may lower monthly repayments by extending the terms. However, more interest may accrue over time.

Consumer Reporting Agencies – See Credit Bureau

Cooperative Education – This is a learning program that allows you to alternate your periods of learning with periods of employment.

Cost of Attendance – also referred to COA, this is the total monetary value needed for covering your educational expenses. These costs include fees, tuition, boarding, accommodation, books, personal supplies, transportation and among other expenses.

Creditworthy – The determination by a lender that you are likely to repay your student loan according to its provisions.

Credit Bureau – An agency that collects and keeps reports and financial data about borrowers to respective lenders and creditors. The data includes number of credit accounts held, payment habits, account balances, employer, duration of employment and financial transactions.

Credit Response – The response by a lender to an application of financial aid. The response may reflect approval, decline or make a counteroffer for the applied loan.Credit Response –

Credit Score – Determination of a student’s ability to repay loans based on his or her past records.

Cumulative Loan Amount – Also referred to as Aggregate Loan Amount, it is the total amount in loans that a borrower disburses towards the education of a student throughout the borrower’s academic year.

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D

Data Release Number – Also called DRN; it is a 4-digit number that is assigned to your Free Application for Federal Student Aid (FAFSA), enabling you to release data to schools that you omitted on your original FAFSA. This number is useful when you visit Federal Student Aid Information Center to correct your mailing address and other details.

Debt – The amount of money that you owe a certain lender.

Debt Consolidation – Bringing two or more unsecured debts into a single debt or loan with better terms.

Debt-to-Income Ratio – A comparison of student’s debts to his overall income. Lenders rely on this ratio to determine your credit worth. If you have a low ratio, you are more likely to secure federal aid and other types of student funding.

Default – The failure to repay a loan in its entirety or its monthly installments as agreed in the terms of the loan’s promissory note. Lenders record all defaults on your credit report and can negatively affect your eligibility for further funding. For almost all federal student loans, you will be deemed to have defaulted if you have failed to make payments in more than 270 days.

Default Rate – The percentage rate at which lenders and creditors reports defaulters.

Deferment – Rescheduling of repayment of loan principle or interest for a short period under certain special situations. For you to qualify for student loan deferment, you must apply to the relevant grants body with suitable reasons.

Delinquency – A status that your loan enters when you fail to make prompt repayments. A lender is free to report your delinquency to a national credit bureau.

Dependent Status – The determination by the US Department of Education whether students are self-dependent or depend on parents or guardians.

Diploma Mill – The name informally given to any college or school that is unaccredited or one that awards degrees and certificates to students at a fee and without attending proper classes.

Direct Loan – The William D. Ford Direct Loan Program allows the disbursement of student loans expressly from the U.S Department of Education.

Direct PLUS Loan – A loan disbursed by the U.S Department of Education to parents of professional or graduate students. You are legally bound to repay the loan interest regardless of its status.

Disbursed Amount – The value of federal student aid funds that a creditor issues a certain school to cover the learning costs of the borrower (student). Most federal student aid programs make two or more disbursements.

Disbursement Date – The date on which your school, college or university receives a loan check from your lender.

Discharge – The pardon of a student from paying existing student loans.

Discretionary Income – The resultant gross income of a student after deducting the poverty guidelines of the student’s family size as well as state of residency.

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E

Early Action – A policy of admission to college or university that allows students to apply and receive a report on their admission (or lack of it) early. If you receive this report you are not obligated to join that school, so you may submit similar applications elsewhere.

Early Decision – When you receive admissibility report, you may commit yourself to attend that institution and therefore are obligated to withdraw similar submissions elsewhere.

Economic Hardship – A difficult financial situation in which a student loan borrower is unable to service his loan. This may occur when one earns below the minimum wage of his country or state or when he exceeds the federal government’s definition of debt-to-income ratio.

Economic Hardship Deferment – A temporary postponement of student loan repayment that the law grants students after meeting a predetermined eligibility requirement.

Education Savings Account – A bank account that holds funds from the savings of parents and students to cover education expenses. It allows the holder to put up to $2,000 each year for each child under the legal age of 18. As long as you spend withdrawals from the education savings account on offsetting education expenses, the withdrawals are tax-free.

Education Service Agency – A regional organization that is legally authorized by state or federal law to develop and manage local education services in public school districts and other agencies.

Electronic Funds Transfer – The exchange of money between a creditor and a borrower’s school accounts electronically. It is also the repayment of loans electronically. This transfer is usually safer and more convenient for the entity transacting.

Elementary School – Any school public or non-profit private school that offers elementary and secondary education as stipulated under state regulations.

Eligible Institution – Any higher education institute, vocational institute, school, college or university that meets all minimum requirements to participate in the disbursement of student loans.

Eligible Program – A study or program that requires a predetermined duration to lead students to a degree or certificate.

Emancipated Minor – An underage person whom the law has legally determined to be adult in his or her state of residence.

Endorser – Someone with a reputable credit score who agrees to repay a student loan in full if the qualifying student defaults.rant

Enrollment Status – Your standing as a student in the school or college regardless of your type of study, level and class.

Entrance Counseling – A compulsory session that schools and colleges convene to offer vital information to new students. It is geared at enlightening student loan beneficiaries of their responsibilities and rights.

Exit Counseling – A session of loan repayment and debt management that federal laws require students graduating from college to attend. It seeks to remind borrowers of their mandate as far as loan repayment is concerned.

Expected Family Contribution – Usually abbreviated to EFC, this is the number that determines your eligibility for student loans. It is a product of the data you provide during application for the aid. It is always reported on individuals’ Student Aid Report.

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F

FAFSA – Free Application for Federal Student Aid. You must fill a FAFSA application form
annually to help the relevant authorities determine your eligibility for student aid.

FAFSA4 caster – An online application that helps you compute and estimate your eligibility for federal student loans early. This tool also helps you to plan finances for college life.

Federal Direct Student Loan Program – A program enabling students to access education loans directly from the federal government and not from traditional lenders. It is also referred to as William D. Ford Federal Program.

Federal Methodology – A criteria of establishing need that the 1992 Reauthorization of the Higher Education Act gave power.

Federal Pell Grants – America’s largest federal grant program. Each year, it gives aid to millions of low-income tertiary education students.

Federal School Code – A collection of codes that you should list on your application for student financial aid. This is generally an identifier assigned by the U.S Department of Education to all schools or colleges that are eligible for student aid programs.

Federal Student Aid – financial assistance from the federal government to eligible students to help them pay for education expenses at participating schools or colleges. The aid caters for tuition, food, fees, accommodation, books, transport, personal effects and other expenses.

Federal Student Aid PIN – A personal Identification Number that until May 10 2015 served as a unique identifier for students to access personal federal loan information. It applied in several systems under the U.S Department of Education, including acting as a digital signature in online applications.

Federal Student Aid Programs – The programs that provide loans, grants, fellowships, and work-study funds as specified under the Higher Education Act of 1965. These allow eligible students from low-income families to obtain funding in a participating schools or colleges.

Federal Student Loan – A loan that the federal government advances to you for payment of college education. As it is borrowed money, you have to commit to pay with interest over a period agreed in a promissory note.

Federal Work-Study Program – Is a scheme that allows students to engage in part-time employment to fund their studies.

Fellowship – A grant that requires students to engage in teaching or research to fund their postgraduate study.

FFEL Program – Federal Family Education Loan. This program enables private lenders to give you and other student loans that the federal government guarantees. Since June 30 2010 when the program ended, no loans have been granted under it.

Finance Aid Administrator – An officer who prepares, communicates, tabulates and reports data about student grants, loans, scholarships and employment programs within a college or university. He or she is also responsible for implementing finding policies as required by state, local or federal government regulations.

Financial Aid Offer – The cumulative financial aid that a student gains at a college or school whether originating from the federal government or elsewhere. The staff at a college financial aid office combines this data to come up with a package that meets student education expenses.

Financial Aid Office – The department at a school or college that prepares, communicates and reports all student financial aid. This is the office that you need to visit when applying or clarifying information about student loans, grants, fellowships and scholarships among other financial aid types.

Financial Aid Transcript – A report from your school or college that summarizes all financial loans received in a certain period such as year or the entire college enrollment.

Financial Need – The difference between the cost of attendance and expected family contribution.

Forbearance – Is a benefit in student loans from the federal government under which you can temporarily halt the payments of loans. Even with forbearance, the lender will still continue to charge interests whether your loan is subsidized or not.

Fixed Interest Rate – A student loan interest rate that is not subject to change by circumstances. A fixed interest rate can benefit students where inflation increases exponentially.

Foster Care – An arrangement providing temporary residence for dependent children when circumstances prevent their parents, guardians and relatives to take them under their roof. Examples of these circumstances are parents’ divorce or disagreement pending a court determination, abuse of the children and other legal situations.

FSA ID – A system of identification that allows students access to their Federal Student Aid details. This ID consists of the student’s name, a username, verified email address and password. It can serve as a legal signature for web-based applications.

Full-Time Employment as Teacher – Students or previous students may be employed as teacher or tutors at certain schools and colleges as an aid to offset outstanding federal and other student loans. This usually happens under the Student Loan Forgiveness Program. The employment is determined by the provisions of the state in which the school is situated. Sometimes, you may have to teach in two or more schools. Here, a combination of all employments held determines the terms of engagement.

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G

Garnishment of Wages – Deduction of your pay to offset a student loan with or without your consent. It applies where the federal government or other lending authority seeks to force the repayment of defaulted student loans.

Gift Aid – Financial aid advanced to certain students without needing repayment. Lenders, schools and federal government have the sole right to administer this type of aid under special circumstances.

Grace Period – The period of time allowed by creditors and lenders for the repayment of student loans. Interests still accumulate during a loan’s grace period.

Graduate School – Any school or college that offers additional education other than an ordinary baccalaureate.

Graduate or Professional Student – A student at an institution of higher learning who is-
• Currently studying in a program or study above the bachelor’s degree level
• Not enrolled in an undergraduate program
• Has sufficiently and suitably completed a minimum three years of full-time study

Graduated Repayment Plan – This is an arrangement with the following stipulations-
• Monthly payments start at a low figure and increase steadily after every two years
• Monthly payments are made of up to a decade excluding periods of forbearance and deferment
• Monthly payments should be equal or more than the interest accruing on your student loan
• Monthly payments will not exceed three times any other payment

Graduation Rate – A measure of the student’s progression from first-time certificate programs as full-timers to the completion of a degree within 150% or ordinary time.

Grant – A form of financial aid that federal government, private lenders and other institutions award deserving students and do not require repayment.

Gross Income – A person’s total income before taxes and deductions. This income refers to salaries, wages, business profits, dividends from shares and other benefits.

Guarantee Fee – A percentage of a loan principal that is charged on the borrower as
insurance premium. It is usually deducted from the proceeds of the loan.

Guaranty Agency – A government institution or non-profit organization that supervises loan insurance programs for students to protect lenders from undesirable situations. Examples of these are sudden disability and death of borrower, his or her defaulting on repayments and bankruptcy.

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H

Halftime Enrolment – The least number of hours that you need to be a student to qualify for a federal student loan. This figure may vary depending on the college’s policies and provisions of your program. It can be obtained from the office of financial aid at your school.

Head of Household – This term is used to refer to a person who-
• Pays more than half of the total expenses of maintaining a home for the year;
• Is unmarried on the year’s last day
• Qualifies to be head of household and has lived in a home for at least half of the year

Holder – Also referred to as loan holder, this is the person or institution that keeps your promissory note and is mandated to collect loan repayment from you. This holder may be the U.S Department of Education, a financial institution or other legal entity.

Homeless – Any person who lacks regular, fixed or adequate housing for a period of time. If you have moved in with relatives or friends because of desperation, you may be referred to as homeless. The same applies for people living in a park, makeshift shelter, motel or car.

Home-school – A learning arrangement where students study at home as opposed to formal classrooms. Here, they are educated by private tutors, parents, guardians or relatives as opposed to traditional teachers at a public or private school.

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I

Income Tax Refund OffsetsIncome-Sensitive Repayment – An annually-reviewed option of repaying student loans at a certain percentage of the borrower’s income. To qualify for this option, you have to supply the lending authority with you prompt income documentation such as annual tax returns.

Income Tax Refund Offsets – A tool for debt collection that helps the federal or state governments to get hold of individuals; income tax refunds when these individuals owe the government. This tool may be applied for collection of defaulted federal student loans.

Independent Student – This determination is made by the office of student aid at each school or college. For one to be called an independent student, he or she must be any of the following:
• At least 24 years old
Married
• Veteran
• Orphan
• Ward of the court
• Have a legal dependent apart from a spouse
• Graduate or professional student

Installment Loan – Financial aid where the lender demands repayment over a period of time. Student loans, mortgages and auto loans are good examples.

Institutional Grant – A form of student gift aid that a college funds and does not have to be repaid.

Interest – The charge that you, as a borrower have to pay for using a lender’s financial
aid through a certain period.

Interest Rate – Also called Annual Percentage Rate, it is the percentage of a principal that you pay for borrowing money.

Internship – Work experience that students gain at any time before graduating from college. Internships may or may not be paid.

IRS Data Retrieval Tool – An application that people use to access and/or transfer information regarding tax returns. It helps you to save time and increase accuracy.

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J

Job Placement Rate – The percentage at which a college’s graduating class secures employment within a stipulated time frame after getting their certificate or degree. This refers to jobs in individuals’ trained industry, trade, profession and related specializations.

Judgment Lien – A court order that gives creditors the right to claim a home or property if the owner defaults loan repayment. Students normally do not qualify for federal student loans if they own a judgment lien property in the U.S.

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L

Legal Guardianship – A situation created by a court order where a judge or jury appoints a person other than a child’s parent to temporarily take care of the minor. Students in legal guardianship are not obligated to fill parent information when applying for federal student aid, as they are considered independent students.

Lender – The organization that initially makes a loan. It may be the borrower’s school, a bank, savings and loan organization, credit union and any legal institution that provides loans.

LIBOR – London Interbank Offered Rate. It is an average interest rate that selected London market banks use to lend money to other banks. It is also used as a guide in many loan transactions.

Lifetime Eligibility Used – Also referred to as LEU, this is the amount of all federal aid that is awarded to a student divided by the amount that a student would receive if he or she was under full-time enrolment. Therefore, this figure is presented as a percentage.

Litigation – The process of taking or contesting an action in court. Students may face litigation under several circumstances including loan defaulting.

Loan – The amount of money that student aid lenders give you for gradual repayment.

Loan Date – The date when the first disbursement of a student loan was made or guaranteed.

Loan Forgiveness – The annulment of a portion or the entire outstanding student loan balance. This situation occurs under special circumstances and borrowers are no longer responsible for repayment.

Loan Holder – The organization or legal entity that keeps the promissory note and collects loan repayments from the borrower.

Loan Rehabilitation – The procedure of forgiving a defaulted loan and removing the default register from a borrower’s credit report.

Loan Servicer – An organization that acts on behalf of lenders to collect payments, answer customer service questions, provides administrative support and maintains information on federal student loans.

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M

Master Promissory Note – You must sign this legal document to commit yourself to a federal student loan. This note lists the terms and guidelines that you will repay the loan. It also highlights your responsibilities as well as rights. Read your promissory note carefully to understand all provisions.

Merit-Based Aid – The stipulation that federal, state and local government will provide student loans based on the skills and abilities of students. It is the responsibility of the school or college to determine the merit of all eligible applicants.

Minimum Balance – The lowest amount of money that you are needed to maintain in your bank account to prevent fees.

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N

National Student Loan Data System – A central dedicated database that tracks, reports and displays student aid information. Also referred to as NSLDS, it obtains data from guaranty agencies, schools, the federal government and databases belonging to the U.S Department of Education.

Need-Based Aid – A stipulation that student loans be given as per the needs of eligible applicants. Here, the students with lowest incomes may be considered before others.

Net Price – An annual estimation of the total cost that you and your family need to raise for your education expenses at a specified school. The figure is attained by deducting eligible grants and scholarships from the cost of attendance at the said institution.

Next of Kin – Your closest living relatives.

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O

On-time – A loan repayment deposited within 15 days of its due date.

Out-of-state Student – A student who goes to a career school or colleges in a state outside his legal residence.

Outstanding Interest – This is the value of all interests accrued from the balance of a student loan.

Outstanding Principal – The unpaid portion of the loan plus all interests owed.

Overpayment – An error that occurs when a federal student aid fund disburses more money than the student is actually eligible to receive. Contact your school’s office of student loans to correct the error. Otherwise, you may have to pay principal and interest that you did not imagine originally.

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P

Parental Contributions  Money that your family members and close relatives give you to offset educational expenses. This should not be confused with expected family contribution.

Payroll Deductions – Amount that an employer withholds from an employee’s salary or wages. Examples of payroll deductions are Social Security, Federal Income Tax, Medicare, Health Insurance, State Taxes and Retirement Plan among others.

Postgraduate Teacher Certification Program – A program for holders of bachelor’s degrees. It has the following provisions-
• It is regarded as an ordinary graduate program
• It does not lead students to a graduate degree and
• Contains state-stipulated courses for students to receive license of teaching at an elementary or secondary school

Poverty Guideline Amount – This is a figure determined and published by the U.S Department of Health and Human Services. This guideline helps the federal government in determining people’s eligibility to certain benefit programs such as food stumps, healthcare services and education aid among others.

Prime – The interest rate that financial institutions such as banks charge customers with the most impressive creditworthiness.

Principal – The overall sum of money that you borrow for student fees. It also includes capitalized interests.

Private Loan – Any loan that has been advanced to students by nonfederal institutions such as credit unions, banks, school and state agencies.

Promissory Note – A legal binding document that beneficiaries of student loans must sign to commit themselves to the terms of the agreement. Apart from reading it carefully, a borrower needs to keep the promissory note safely for future reference.

Proprietary School – A private school or college that provides training at a profit.

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Q

Qualifying Public Services – The services that a non-profit organization offers to qualify it as an employer in the Public Service Loan Forgiveness Program. These services are-
Military services
• Emergency management
• Public safety
• Public Interest law services
Law enforcement
• Early Childhood Education
• Public service for senior citizens
• Public Service for disabled persons
Public education, public health
• Public library services and
• Other school-based services

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R

Regular Student – Any student who is studying or has been accepted to study at a college to obtain a certificate or degree. Generally, you should be a general student for you to qualify for federal student aid.

Rehabilitated Loan – A loan whose lender absolved of default after the borrower made nine deliberate and affordable monthly installments in the first 20 days of the loan’s due date during ten simultaneous months.

Remaining Amount – The amount of grant that a school or college anticipates to distribute to individual students until the end of the year.

Retention Rate – A percentage measure of students who clear one level of higher education and return to the same institution for further studies the following year.

Room and Board – The unitary cost of food and housing when you are attending career school or college.

Repayment – To pay a creditor or lender an installment of money owed from a loan.

Repayment Period – The maximum time within which a promissory note states you will repay a federal student loan. This period depends on amount of loan, type of loan and repayment plan. It may be as little as 10 years or as much as 30 years.

Repayment Plan – A procedure that a lender and a lender agree on for repaying a loan. Most lenders have predetermined repayment plans but you can have a favorably one tailored especially for you.

REPAYE Plan – Revised Pay As You Earn. This arrangement has monthly repayments equivalent to 10 % of your income. This figure is then divided by 12.

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S

Satisfactory Academic Progress – The standard of pleasing academic performance when students progress to a certificate or degree at a certain institution. As this standard varies from school to school and program to program, it is prudent to inquire your school and program standards.

Satisfactory Repayment Plan – Any binding contract where you agree and your debtor agree on the terms of payment.

Standard Repayment Plan – Here, your monthly installments are a fixed amount of not less than $50. In addition, it is made up of 10 years excluding periods of forbearance and deferment. Since your monthly payments are usually higher than those of other plans, this plan can save you valuable money.

Scheduled Amount – The highest amount of federal student aid that you are eligible to get in a certain year if you enroll full-time for the entire year. Your school computes this amount from the information you provide on the FAFSA.

Scheduled Award – The highest amount of grant that you are eligible to get in a certain year.

Scholarship – Financial aid given to students to offset certain education costs. You may or may not repay scholarships.

Service Obligation – The requirement on an agreement to serve (ATS) that students need to sign to qualify for a TEACH Grant. These obligations include the following:
• Teaching full-time
• Teaching in a high-need department
• Teaching at a low-income school
• Teaching at a service agency providing educational needs
• Teaching for four or more years within eight years of completing school

Standardized Test – An exam that tests students against a collective standard.

State Aid – Financial aid from your state of residence to you

Status Effective Date – The date when your current loan status was activated.

Student Aid Report – Also referred to as a SAR, it is a chronicle of your information and data at FAFSA. The authority typically emails you this report a few days after the processing of your FAFSA. Alternatively, you can receive the report by mail in the first 7-10 days.

Subsidized Loan – A cheaper student loan where the federal government offsets the interest that your loan accrues when you attend a grace, in-school or deferment status.

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T

TEACH Grant – Teacher Education Assistance for College and Higher Education. If you agree to teach at a primary, secondary or education service agency for four years, you could benefit from a TEACH Grant. Usually, the federal government gives up to $4,000 to beneficiaries. If you do not meet the obligations of the loan, the federal government converts the grant to a Direct Unsubsidized loan.

Total Borrowed – The amount of loan principal that a lender disburses to a borrower.

Transfer Rate – A percentage of the number of students who transferred to other institutions as compared to those who didn’t.

Treasury Offset Program – A debt collection application that enables governments to get hold of a defaulting borrower’s government benefits and income tax refunds. If you default a federal student loan, this tool may be used against you.

TRIO – A combination of eight programs that identifies students from disadvantaged communities and helps them obtain student loans. Examples are people living with disabilities, the sick, poor and those afflicted by natural tragedies.

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U

Unsubsidized Loan – A loan whose principals and interest rate you are fully mandated to pay regardless of its status. Interest for this type of student loan starts accruing right after its disbursement date and continues to accrue throughout its lifespan.

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V

Verification – The procedure that your school follows in order to confirm the accuracy of the data you provide. Your school may request further documentation to prove our income and other fields in the application form.

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W

William D. Ford Federal Direct Loan Program – The federal government program that offers student loans to eligible applicants. It is mandated by Title IV of Higher Education Act and is implemented through federal approved schools.

Work-Study – A program advanced by the federal government to eligible students where they work on a part-time basis while still enrolled in school. It is geared towards helping a student pay part of his or her education expenses.

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