Federal Student Aid, an office of the U.S. Department of Education: Proud sponsor of the American mind. Federal Student Aid, an office of the U.S. Department of Education: Proud sponsor of the American mind.

Glossary

Academic Year

A period of time schools use to measure a period of study. Contact your financial aid office for information on how your school defines Academic Year.

Acceleration

Demand for immediate repayment of your entire federal student loan. The entire unpaid amount of your federal student loan becomes due and payable if you:
  • Receive loan money, but don't enroll at least half-time at the school that determined you were eligible to receive the federal student loan;
  • Use your loan money to pay for anything other than expenses related to your education at the school that determined you were eligible to receive the federal student loan;
  • Make a false statement that causes you to receive a federal loan that you're not eligible to receive; or
  • Default on your federal student loan.

Accrue

To accumulate interest on a loan.

Adjusted Gross Income (AGI)

Adjusted Gross Income is an individual (or couple's) total taxable income minus specific reductions. You can find your Adjusted Gross Income on your most recently filed IRS Form 1040, 1040A, or 1040EZ, or by requesting a tax return transcript online at http://www.irs.gov/Individuals/Get-Transcript

Aggregate Loan Limit

A limit on the total amount of subsidized and/or unsubsidized loans that you may borrow for undergraduate and graduate study. If the total loan amount you receive over the course of your education reaches the aggregate loan limit, you're not eligible to receive additional loans. However, if you repay some of your loans to bring your outstanding loan debt below the aggregate loan limit, you could then borrow again, up to the amount of your remaining eligibility under the aggregate loan limit.

Agreement to Serve

The TEACH Grant ATS is a legally binding document that:
  • Explains your TEACH Grant service obligation;
  • Explains the conditions under which your TEACH Grant may be converted to a Direct Unsubsidized Loan; and
  • Describes the repayment terms and conditions that apply, and your rights, responsibilities, and benefits if your TEACH Grant is converted to a loan.

Alien Registration Number

The alien registration number or "A-number" is an identifying number that U.S. Citizenship and Immigration Services (USCIS) assigns 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 Loan Limit

The maximum federal student loan eligibility per academic year. These amounts vary by type of loan and grade level. Your school will tell you how much you're eligible to receive each academic year. Specific amounts can be found at StudentAid.gov.

Annual Percentage Rate

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.

Books, Supplies, Transportation, and Miscellaneous Personal Expenses

Educational expenses included in your cost of attendance as determined by your school.

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 federal student loan. Future interest is charged on the increased principal balance and this may increase your monthly payment amount and the total amount you repay over the life of the federal student loan.

Cancellation timeframe (TEACH Grant)

If you decide that you do not want a TEACH Grant (or if you want to receive less than the full amount for which you are eligible), you can cancel all or part of your TEACH Grant by notifying your school within the cancellation timeframe.

By the later of:

  • 14 days after the date the school notifies you of your right to cancel all or part of the TEACH Grant; or
  • The first day of the school's payment period (your school can tell you the first day of the payment period).

Charged Off (written off) Account

A debt that a creditor has written off as a loss, but that is still subject to collection action.

Collection Account

A debt that has been placed with a collection agency by a creditor or that is subject to more intensive efforts by a creditor to recover amounts owed from a borrower who has not responded satisfactorily to the demands routinely made as part of the creditor's billing procedures.

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 credit bureaus.

Debt Consolidation

Combining several unsecured debts into a single, new loan, usually with more favorable terms.

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

A benefit of federal student loans that allows you to temporarily stop making payments. You're not generally charged interest on subsidized loans during deferment. Interest will continue to be charged on your unsubsidized loans and PLUS loans.

Delinquency

A status of a loan that begins if you don't make a payment when due. Your lender is required to report delinquency to at least one national credit bureau.

Dependent Child Care Expenses

The cost of care during periods that include but aren't limited to class time, study time, field work, internships, and commuting time for the student.

Direct Loan

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

Disbursement

A portion of a federal student loan that the school pays out by applying the funds to the student's school account or by paying the borrower directly. Students generally receive their federal student loans in more than one disbursement.

Discretionary Income

Your adjusted gross income minus the poverty guidelines for your family size.

Discretionary income for the IBR plan

Discretionary income for the IBR plan is the amount by which your adjusted gross income exceeds 150% of the poverty guideline amount.

Discretionary income for the ICR plan

Discretionary income for the ICR plan is the amount by which your adjusted gross income exceeds the poverty guideline amount for your state of residence and family size.

Discretionary income for the PAYE plan

Discretionary income for the PAYE plan is the amount by which your income exceeds 150% of the poverty guideline amount.

Eligible loans for the REPAYE plan

Discretionary income for the REPAYE plan is the amount by which your income exceeds 150% of the poverty guideline amount.

Educational service agency

An educational service agency is a regional public multiservice agency (not a private organization) that is authorized by state law to develop, manage, and provide services or programs to local education agencies, (such as public school districts).

Eligible loans for the 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. You are a new borrower for the IBR plan if (1) you have no outstanding balance on a Direct Loan or FFEL Program loan as of July 1, 2014 or (2) have no outstanding balance on a Direct Loan or FFEL Program loan when you obtain a new loan on or after July 1, 2014.

Eligible loans for the ICR plan

Eligible loans for the ICR 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 PLUS Consolidation Loan (based on an application received prior to July 1, 2006 that repaid Direct or Federal PLUS Loans made to a parent borrower). However, a Direct Consolidation Loan made based on an application received on or after July 1, 2006 that repaid a Direct or Federal PLUS Loan made to a parent borrower is eligible for the ICR plan.

Eligible loans for the PAYE plan

Eligible loans for the PAYE 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.

You are a new borrower for the PAYE plan if: (1) you have no outstanding balance on a Direct Loan or FFEL Program loan as of October 1, 2007 or have no outstanding balance on a Direct Loan or FFEL Program loan when you obtain a new loan on or after October 1, 2007, and (2) you receive a disbursement of an eligible loan on or after October 1, 2011, or you receive a Direct Consolidation Loan based on an application received on or after October 1, 2011.

Eligible loans for the REPAYE plan

Eligible loans for the REPAYE 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.

Eligible Parent for PLUS Loan

To be eligible to borrow PLUS loans as a parent you must:
  • Be a U.S. Citizen or National or Permanent Resident/Other Eligible Non-Citizen
  • Be the biological or adoptive parent of the student
  • Be the spouse of the student's parent and considered to be a parent in accordance with the instructions on the Free Application for Federal Student Aid (FAFSA) for purposes of reporting income and assets on the FAFSA
  • Have made satisfactory arrangements to repay the amount owed after receiving more money than you were eligible to receive from one of the Title IV programs (e.g. Federal Perkins Loan, Federal Pell Grant, a federal student loan)
  • Have made satisfactory arrangements to repay the amount owed on any loan you are in default on from one of the Title IV programs (e.g. Federal Perkins Loan, Federal Pell Grant, a federal student loan)
  • Have fully repaid to the U.S. Department of Education (ED) or to the loan holder in the case of a Title IV federal student loan, if convicted of, or pled nolo contendere (no contest) or guilty to, a crime involving fraud in obtaining funds under a program authorized under Title IV of the Higher Education Act of 1965, as amended (HEA).

Endorser

Someone who does not have an adverse credit history and agrees to repay the federal student loan if you don't.

Endorser Code

An identifying number associated to a Direct PLUS Loan application. Used by an endorser when completing a Direct PLUS Loan endorser addendum for a specific loan.

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).

Extended Repayment Plan

Under this plan, your monthly payments are:
  • fixed or graduated
  • made for up to 25 years

You must have had no outstanding balance on a Direct Loan and /or a FFEL Program loan as of October 7, 1998, or on the date you obtained a Direct Loan and/or a FFEL Program loan after October 7, 1998, and you must have more than $30,000 in outstanding Direct Loans or $30,000 in FFEL Program loans.

For example, if you have $35,000 in outstanding FFEL Loans and $10,000 in outstanding Direct Loans, you can choose the Extended Repayment Plan for your FFEL Loans, but not for your Direct Loans.

The Extended Repayment Plan option can extend the repayment period further than is provided for under the Standard and Graduated Repayment Plans for consolidation loans that are based on total education indebtedness that is over $30,000 but not exceeding $40,000.

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 https://fafsa.gov/.

Family Size

Family size always includes you 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.
For the PAYE, IBR, and ICR Plans, family size also always includes your spouse.
For the REPAYE plan, family size includes your spouse unless your spouse's income is excluded from the calculation of your payment amount.
For all plans, family size also includes other people only if they live with you now, receive more than half their support from you now, and will continue to receive this support 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 repayment plans, your family size may be different from the number of exemptions you claim on your federal income tax return.

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, FFEL PLUS Loans and FFEL Consolidation Loans.

The FFEL Program ended June 30, 2010 and no new loans have been made under the FFEL Program since that date.

Final Divorce Decree

A document issued by a court that legally ends a marriage and sets 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

A benefit of federal student loans that 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. Some forbearances are required to be granted by your federal loan servicer; others are offered only at the discretion of your federal loan servicer.

FSA ID

An FSA ID consists of a username (or verified e-mail address) and password which gives you access to Federal Student Aid's online systems and can serve as your legal signature.

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 usually ends six to nine months later. 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).
*Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

Graduate or Professional Student

A student who:
  • Is not an undergraduate student;
  • Is enrolled in a program or course above the bachelors degree level or is enrolled in a program leading to a professional degree; and
  • Has completed the equivalent of at least three years of full-time study either before entering the program or as part of the program itself.

Graduated Repayment Plan

Under this plan, your monthly payments
  • start out low and increase every two years
  • are made for up to ten years (not including periods of deferment or forbearance)
  • will at least equal the amount of interest that accrues on your loan each month
  • won't be more than three times greater than any other payment

Under the Graduated Repayment Plan, consolidation loans have repayment periods of 10 to 30 years based on your total education loan indebtedness. For example, if your total education loan indebtedness exceeds $60,000, your repayment period will be 30 years (360 months).

Grant

Student grants are monetary gifts to people who are pursuing higher education. Unlike student loans, grants don't 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. For information on half-time enrollment at your school contact your school's financial aid office.

Head of household

  • You're unmarried or "considered unmarried" on the last day of the year.
  • You paid more than half the cost of keeping up a home for the year.
  • A "qualifying person" lived with you in the home for more than half the year (except for temporary absences such as school). However, if the "qualifying person" is your dependent parent, he or she does not have to live with you.

Highly-Qualified Teacher

You must perform your teaching service as a highly-qualified teacher. The term "highly-qualified teacher" is defined as:

  • In section 9101(23) of the Elementary and Secondary Education Act of 1965, or
  • If you are a special education teacher, in section 602(10) of the Individuals with Disabilities Education Act.

More information about the requirements for being a highly-qualified teacher

Holder/Loan Holder

The holder of your Direct Loans is the U.S. Department of Education (the Department). The holder of your FFEL Program loans may be a lender, secondary market, guaranty agency, or the Department. Your loan holder may use a servicer to handle billing, payment, repayment options, and other communications. References to "your loan holder" on this form mean either your loan holder or your servicer.

Income-Based Repayment (IBR) Plan

The Income-Based Repayment (IBR) plan is a repayment plan with monthly payments that are generally equal to 15% (10% if you are a new borrower) of your discretionary income, divided by 12.

Income-Contingent Repayment (ICR) Plan

The Income-Contingent Repayment (ICR) plan is a repayment plan with monthly payments that are the lesser of (1) what you would pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on your income or (2) 20% of your discretionary income divided by 12.

Insurance

Financial protection against loss or harm. Includes medical, renters, homeowner's, vehicle and life insurance.

Interest

The cost to borrow money. Interest is calculated as a percentage 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 Income-Driven Repayment Plan Request, saving time and improving accuracy. If you don't 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 at which a selection of banks are prepared to lend money (in U.S. dollars) to other banks in the London market. LIBOR is used as an index rate in many loan transactions.

Loan

Money that you borrow and must repay.

Loan Discharge (Cancellation)

Loan discharge is the removal of a borrower's obligation to repay a loan when the loan is still outstanding. Loan discharge is granted on federal student loans only in limited circumstances.

Loan Fee (Origination Fee)

A fee charged for each federal student loan you receive that is a percentage of the total loan amount you're borrowing (gross amount). The loan fee is deducted proportionately from each disbursement of your loan. This reduces the actual loan amount you receive (net amount). The specific loan fee that you're charged will be included in a disclosure statement you'll receive after the first disbursement of your federal student loan. You will be required to repay the gross amount.

Loan Forgiveness

Loan forgiveness is the removal of a borrower's obligation to repay a loan when the loan is still outstanding. Loan forgiveness is granted on federal student loans only in limited circumstances.

Loan Modification Agreement

Temporary or permanent restructure of a 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 application. Used by an endorser when completing a Direct PLUS Loan endorser addendum for a specific loan.

Loan Servicer/Federal Loan Servicer

An entity that collects payments on a federal student loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student 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'll be assigned a federal loan servicer.

Direct Loan borrowers are assigned a federal loan servicer after the first disbursement of their loan. Your federal loan servicer will contact you directly after you receive your first disbursement.  For a list of federal loan servicers and their contact information, select "Additional Information" on the "Contact Us" page to access the list of servicers and their contact information.

Low Income Schools/Schools and Educational Service Agencies Serving Low-Income Students

TEACH Grant recipients must teach at an elementary or secondary school (public or private) or educational service agency (ESA) that serves low-income students (low-income school or ESA). These schools and ESAs are listed in the Department's Annual Directory of Designated Low-Income Schools for Teacher Cancellation Benefits (Low-Income School Directory). Any elementary or secondary school operated by the U.S. Department of the Interior's Bureau of Indian Education (BIE), or operated on an Indian reservation by an Indian tribal group under contract or grant with the BIE, also qualifies as a low-income school. A list of these schools is available in the BIE Directory.

Master Promissory Note (MPN)

A legal document in which you promise to repay your federal student loan(s) and any accrued interest and fees to your lender or loan holder. There is one MPN for Direct Subsidized/Unsubsidized Loans and a different MPN for Direct PLUS Loans.

Most schools are authorized to make multiple federal student loans under one MPN for up to 10 years.

The MPN contains a Borrower's Rights and Responsibilities Statement that explains the terms and conditions of the loan(s) you receive.

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're receiving this year (i.e., income from employment, unemployment income, dividend income, interest income, tips, alimony). Don't 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, and other Department of Education databases.
Any Title IV grant or loan you receive will be included in NSLDS.

Next of kin

A person's most closely related living blood relative or relatives.

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 partial financial hardship is an eligibility requirement for the PAYE and IBR plans. You have a partial financial hardship when the annual amount due on all of your eligible loans (and, if you are required to provide documentation of your spouse's income, the annual amount due on your spouse's eligible loans) exceeds what you would pay under PAYE or IBR.

The annual amount due is calculated based on the greater of (1) the total amount owed on eligible loans at the time those loans initially entered repayment, or (2) the total amount owed on eligible loans at the time you initially request the PAYE or IBR plan. The annual amount due is calculated using a standard repayment plan with a 10-year repayment period, regardless of loan type. When determining whether you have a partial financial hardship for the PAYE plan, the Department will include any FFEL Program loans that you have into account even though those loans are not eligible to be repaid under the PAYE plan, except for: (1) a FFEL Program loan that is in default, (2) a Federal PLUS Loan made to a parent borrower, or (3) a Federal Consolidation Loan that repaid a Federal or Direct PLUS Loan made to a parent borrower.

Pay As You Earn (PAYE) plan

The Pay As You Earn (PAYE) plan is a repayment plan with monthly payments that are generally equal to 10% of your discretionary income, divided by 12.

Payroll Deductions

Amount withheld by an employer from employee's earnings. Some examples are: Federal Income Tax, Social Security, Medicare, State Taxes, 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 and FFEL PLUS Loans are loans to 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 FFEL PLUS Loans (made through the Federal Family Educational Loan Program.**)

Students' loan information doesn't include 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 June 30, 2010 and no new loans have been made under the FFEL Program since that date.

Poverty Guideline

The 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). 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 you borrowed plus any capitalized interest.

Public Service Loan Forgiveness

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan (i.e. Income-Driven Repayment or Standard Repayment Plan) while working full-time for certain public service employers.

Qualifying employers include governmental organizations and many not-for-profit organizations. For more information visit StudentAid.gov.

Rehabilitated Loan

A loan that was removed from default because the borrower made 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 holder or servicer.

Repayment Period

The maximum time period over which you must repay your federal student loan. The repayment period may range from 10 years to 30 years, depending on loan amount, loan type, and repayment plan.

Repayment Plan

A plan set up and agreed upon between a borrower and lender that determines the amount you pay each month and the number of payments you must make.

Revised Pay As You Earn (REPAYE) plan

The Revised Pay As You Earn (REPAYE) plan is a repayment plan with monthly payments that are generally equal to 10% of your discretionary income, divided by 12.

Room and Board

An allowance for the cost of housing and food while attending college or career school.

Satisfactory Repayment Arrangement

Agreement between the debtor and the account holder of a defaulted loan detailing the terms of repayment.

Standard Repayment Plan

Under this plan, your monthly payments are
  • a fixed amount of at least $50 each month
  • made for up to 10 years (not including periods of deferment or forbearance)

This repayment plan saves you money over time because your monthly payments may be higher than payments made under other plans, but you'll pay off your federal student loan in the shortest time. For this reason, you'll pay the least amount of interest over the life of your federal student loan.

Under the Standard Repayment Plan, consolidation loans have repayment periods of 10 to 30 years based on your total education loan indebtedness. For example, if your total education loan indebtedness exceeds $60,000, your repayment period will be 30 years (360 months).

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 a borrower is not generally 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 Education 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 June 30, 2010 and no new loans have been made under the FFEL Program 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

All income you're receiving this year (i.e., income from employment, unemployment income, dividend income, interest income, tips, or alimony). Does not include untaxed income such as Supplemental Security Income, child support, or federal or state public assistance.

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.

Teacher Education Assistance for College and Higher Education Grant (TEACH Grant)

Provides funds to students who are completing or who plan to complete coursework that is required to begin a career in teaching, and who agree to teach full-time for at least four years.

TEACH Grant High-Need Fields

For purposes of the TEACH Grant program, high-need fields are:
  • Mathematics;
  • Science;
  • Foreign language;
  • Bilingual education;
  • English language acquisition;
  • Special education;
  • Reading specialist; or
  • Any other field that has been identified as high-need by the federal government, a state government, or a local education agency, and that is included in the Department's annual Teacher Shortage Area Nationwide Listing (Nationwide Listing).

Search the Nationwide Listing.

Note: The Nationwide Listing includes both subject areas and geographic shortage areas. To qualify based on teaching in a high-need field that is included in the Nationwide Listing, you must teach in a listed subject shortage area, not a geographic shortage area.

TEACH Grant servicer

The contractor that works on behalf of the Department to communicate with you in regards to your TEACH Grant service obligation, monitor your progress toward meeting your service obligation, process requests for suspension of the service obligation period, and handle other administrative matters related to your service obligation.

Teacher

For purposes of the TEACH Grant program, a teacher is a person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including special education teachers and reading specialists.

Title IV Aid

The programs authorized under Title IV of the Higher Education Act are the major source of federal student aid. Title IV programs include:
  • Loans
  • Federal Family Education Loan (FFEL)
  • Direct Loan
  • Federal Perkins Loan
  • Grants
  • Federal Pell Grant
  • Academic Competitiveness Grant (ACG)
  • National SMART Grant
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • Federal Work-Study (FWS)

Total Education Indebtedness

Total Education Indebtedness is the sum of a Direct Consolidation Loan, and other eligible education indebtedness (i.e. federal loans not eligible to be consolidated, private loans, or state loans) up to an amount equal to the Direct Consolidation Loan. Total Education Indebtedness is used to calculate the number of payments under the Standard and Graduated Repayment Plans.

Tuition

A charge for teaching/instruction at an institution (e.g. the rental or purchase of equipment (including equipment for instruction by telecommunications), materials, or supplies required of all students in the same course of study).

Undergraduate Student

A student who is enrolled in an undergraduate course of study at a college/university or career school that usually doesn't exceed four years and that leads to an undergraduate degree or certificate.

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 Education Loan (FFEL) Program*.)

* The FFEL Program ended June 30, 2010 and no new loans have been made under the FFEL Program since that date.

Untaxed Income

Income you don't pay taxes on, such as Supplemental Security income, child support, or federal, or public assistance.

Utilities

Includes electricity, gas, water, telephone, cable or internet.

Verified FSA ID

When you create your FSA ID, your information is confirmed with the Social Security Administration (SSA). This takes one to three days, and you'll receive an e-mail (if you provide one) when this is complete.

Once SSA confirms your information, you will have a verified FSA ID and be able to log in to StudentLoans.gov.

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

Student loans provided by the U.S. Department of Education to enable a student to pay for education after high school. Eligible students 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.

Withholding

Amount deducted by an employer from employee's earnings. Some examples are: Federal Income Tax, Social Security, Medicare, State Taxes, Health Insurance, Retirement Plan, etc.