A one-year period between July 1 and June 30.
The additional amount of money you have to repay on a loan, on top of the original principal amount.
Annual percentage rate (APR):
A measure of how much interest will be accrued on an annual basis without taking into account compound interest, the interest which is calculated not only on the initial principle but also the accumulated interest
Used when calculating the Expected Family Contribution (EFC), and includes:
income, checking and savings accounts, stocks, bonds, trusts, real estate (doesn't include a person's home), and material goods owned.
Automated Clearing House (ACH):
An electronic network for financial transactions in the United States. Using ACH payments can help reduce errors, and organize the student loan repayment process.
A notice from a financial aid office to an applicant that specifies the financial aid programs and dollar amount of each financial aid award.
Cost of attendance:
The total cost a financial aid office estimates students will incur during attendance at that college or university.
An application from the College Scholarship Service (CSS) that is used by some private colleges and universities to determine eligibility for non-federal loans.
Department of Education:
The federal agency that establishes financial aid programs and processes applications.
A temporary period during which a borrower is not required to make loan payments. Deferments are more common in federal loan programs rather than alternative loans. For those with subsidized Stafford Loans (and Perkins Loans), deferments are often subsidized as well, meaning that the interest accrued on the loan during the deferment is paid by the government. For unsubsidized loans, the borrower must pay the interest accrued during deferment.
A federal loan issued by the government and administered by the college or institution. Students attending a school that participates in this program are required to complete the application process directly with their school, as well as fill out the FAFSA.
The act of sending federal loan money to the student. Loan payments are paid both to the student and his/her school. Any excess funds are also given directly to the student.
Expected family contribution (EFC):
The dollar amount that a student and family can be expected to contribute toward educational expenses for an academic year. The EFC is calculated when the student submits a financial aid application, and is reported on the Student Aid Report (SAR).
Federal Pell Grant:
The U.S. Department of Education provides student grants that are designed to help offset the unwieldy costs of college tuition. The Pell Grant is awarded to students who can prove the most financial need, and it does not require repayment.
The difference between a student's Cost of Attendance and his/her Expected Family Contribution (EFC). It is the amount of financial aid the student needs to afford tuition at a particular college.
Refers to loan interest rates that will not change throughout the entire lifecycle of the loan.
Free Application for Federal Student Aid (FAFSA):
The FAFSA is the official application form for all federal financial aid programs, including loans and grants.
The time period between a student's graduation (or termination) and the beginning of loan repayment. It usually lasts six to nine months.
A type of financial aid award that does not have to be repaid. Grants are often awarded based on a student's financial need or EFC.
Usually refers to when a student is taking at least six credit hours of class. In most cases, enrollment must be at least half-time to qualify for any financial aid.
Students that are any of the following:
24 years or older (as of 12/31 of the award's year), a graduate or professional student, married, have legal dependents, a veteran of the U.S. Armed Forces or an orphan.
Federal student loan interest rates are variable, adjusted annually and set by the Department of Education each July 1st for the subsequent 12 month loan period.
The bank or lending institution from which a student loan is borrowed.
Parent PLUS Loan:
A federally guaranteed loan program that allows parents to borrow funds to help pay educational expenses. The program does require a credit-worthy borrower. The loan's interest rate is variable, but new loans have a maximum interest rate of 9%.
A need-based financial aid program funded by the federal government. The amount of the award is based on the student's enrollment level and the cost of attendance.
The time period when payments need to be made. The repayment period excludes any months of authorized deferment or forbearance; however, interest will continue to accrue for both PLUS and unsubsidized Stafford Loans.
Student Aid Report (SAR):
The official summary of financial aid eligibility sent to the student by the government once needs analysis has been performed.
Variable interest rates:
Interest rates that can fluctuate. Most variable-interest loans have an annual or maximum cap, which prevents them from exceeding a set amount within a certain period of time.