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.
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 do not 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 student loan that you are not eligible to receive; or
- Default on your federal student loan.
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 are 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.
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 are 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.
A letter from your school that details your federal, state, institutional and private student financial aid.
Books, Supplies, Transportation, and Miscellaneous Personal Expenses
Includes reasonable amounts, as determined by your school.
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.
The process of combining one or more loans into a single new loan.
Consumer Reporting Agencies
See credit bureaus.
Cost of Attendance (COA)
The total cost to attend school for the academic year, as determined by your school.
A credit bureau collects the credit information of individuals and makes it available to financial institutions, credit card companies, etc. Credit bureaus are also known as consumer reporting agencies (CRAs).
A number reported by credit bureaus and used by lenders to determine whether to lend you money, and what interest rate to charge you.
A collection of information about you and your credit history, kept by credit bureaus.
Combining several unsecured debts into a single, new loan, usually with more favorable terms.
The amount of debt compared to your overall income. Lenders use this ratio when determining whether to lend you money. A low debt-to-income ratio is more desirable.
Failure to repay a loan according to the terms agreed to. For the FFEL and Direct Loan programs, your loan is in default if you fail to make a payment for 270 days, if you repay monthly (or 330 days, if your payments are due less frequently). Your lender is required to report the default to at least one national credit bureau.
A benefit of federal student loans that allows you to temporarily stop making payments. You are not generally charged interest on subsidized loans during deferment. Interest will continue to be charged on your unsubsidized loans and PLUS loans.
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 are not limited to class time, study time, field work, internships, and commuting time for the student.
See William D. Ford Federal Direct Loan (Direct Loan) Program.
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.
Your adjusted gross income minus the poverty guidelines for your family size.
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 FFEL PLUS Loan made to a parent borrower, or (3) a Direct or FFEL Consolidation Loan that repaid a Direct or FFEL PLUS Loan made to a parent borrower. Federal Perkins Loans, HEAL loans or other health education loans, and private education loans are not eligible to be repaid under the IBR Plan.
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 (these are Direct Consolidation Loans made based on an application received prior to July 1, 2006 that repaid Direct or FFEL PLUS Loans 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 to be repaid under 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 FFEL PLUS Loan made to a parent borrower, is eligible for the ICR Plan.
Eligible loans for the Pay As You Earn Repayment Plan
Eligible loans for the Pay As You Earn Repayment Plan are Direct Loan Program loans received by a 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 Consolidation Loan that repaid a Direct or FFEL 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 to be repaid under the Pay As You Earn Repayment Plan.
Someone who does not have an adverse credit history and agrees to repay the federal student loan if you do not.
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.
Free Application for Federal Student Aid. The FAFSA® is a form that must be completed annually to help determine your eligibility for federal student aid. For more information, or to complete a FAFSA® online for free, visit FAFSA® on the Web.
Family size includes you, your spouse, and your children (including unborn children who will be born during the year for which you certify your family size), if the children will receive more than half their support from you. It includes other people only if they live with you now, they receive more than half their support from you now, and they will continue to receive this support from you for the year that you certify your family size. Support includes: money, gifts, loans, housing, food, clothes, car, medical and dental care, and payment of college costs. 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.
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.
The cost of attendance minus your expected family contribution.
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 loan servicer; others are offered only at the discretion of your loan servicer.
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).
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).
Student grants are monetary gifts to people who are pursuing higher education. Unlike student loans, grants do not require repayment.
Your total income before deductions.
The minimum hours or credit hours you need to be enrolled to be eligible for a federal student loan. For information on half-time enrollment at your school contact your school's financial aid office.
Head of household
- You are 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.
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. The holder(s) of your Direct Loans is the U.S. Department of Education (the Department). The holder of your FFEL Program loan(s) may be a lender, secondary market, guaranty agency, or the Department. Your loan holder(s) may use a servicer to handle billing, payment, repayment options, and other communications on your loans.
Income-Based Repayment (IBR) Plan
IBR is a repayment plan with monthly payments that are limited to 15% (10% if you are a new borrower) of your discretionary income. Discretionary income for this plan is the difference between your adjusted gross income and 150% 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).
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.
Income-Contingent Repayment (ICR) Plan
ICR is a repayment plan with monthly payments that are the lesser of (1) what you would pay on a 12-year standard repayment plan multiplied by an income percentage factor or (2) 20% of your discretionary income divided by 12. Discretionary income for this plan is the difference between your adjusted gross income and the poverty guideline amount for your state of residence and family size.
The cost to borrow money. Interest is calculated as a percentage of the outstanding (unpaid) principal balance.
The percentage charged when you borrow money. See also Annual Percentage Rate (APR).
IRS Data Retrieval Tool
The IRS Data Retrieval tool is an easy and secure way to access and transfer tax return information directly onto the electronic Income-Driven Repayment Plan 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.
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.
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 are 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 are charged will be included in a disclosure statement you will receive after the first disbursement of your federal student loan. You will be required to repay the gross amount.
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.
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 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 will be assigned a federal loan servicer.
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.
Borrower's Rights and Responsibilities Statement - The MPN contains a Borrower's Rights and Responsibilities Statement that explains the terms and conditions of the loan(s) you receive.
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, and other Department of Education databases.
Any Title IV grant or loan you receive will be included in NSLDS. You can access NSLDS at www.NSLDS.ed.gov.
Payment made within 15 days of the scheduled due date.
Money your parents give you to help pay for educational expenses. Not the Expected Family Contribution (EFC) from your FAFSA®.
Partial Financial Hardship
A circumstance in which the annual amount due on all of your eligible loans or, if you are married and file a joint federal income tax return, the annual amount due on all of your eligible loans and your spouse's eligible loans, exceeds 10% (for the Pay As You Earn Repayment Plan and for new borrowers under the IBR plan) or 15% of the amount by which your adjusted gross income (AGI) exceeds 150% of the annual poverty guideline amount for your family size and state of residence.
Pay As You Earn Repayment Plan
The Pay As You Earn Repayment Plan is a repayment plan with monthly payments that are limited to 10% of your discretionary income (the difference between your adjusted gross income and 150% of the poverty guideline amount for your state of residence and family size, divided by 12). To initially qualify for the Pay As You Earn Repayment Plan and to continue to make income-based payments under this plan, you must have a partial financial hardship (and be a new borrower).
You are a new borrower for the Pay As You Earn Repayment 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 a Direct Subsidized Loan, Direct Unsubsidized Loan, or student Direct PLUS Loan on or after October 1, 2011, or receive a Direct Consolidation Loan based on an application received on or after October 1, 2011. However, you are not considered a new borrower if the Direct Consolidation Loan you receive repays loans that would make you ineligible under part (1) of this definition.
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.
A loan made under the Federal Perkins Loan Program for students with exceptional financial need. Perkins Loans are administered by the school.
Direct PLUS Loans 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 amount is the figure published annually by the U.S. Department of Health and Human Services (HHS) and differs by family size and state of residence. The HHS poverty guidelines are used for purposes such as determining eligibility for certain federal benefit programs. If you are not a resident of a state identified in the poverty guidelines, your poverty guideline amount is the amount used for the 48 contiguous states.
A Section 529 plan. Prepaid tuition plans let you lock in future tuition rates at in-state public colleges at current prices and are usually guaranteed by the state.
The interest rate banks charge their most creditworthy commercial customers.
The loan amount you borrowed plus any capitalized interest.
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.
To pay back money you borrowed by making scheduled payments to a loan holder or servicer.
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.
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.
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 will 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).
Money you borrow for school and must repay with interest.
Student Loan Debt Burden
Student loan debt burden is the portion of a student's monthly income dedicated to their student loan payments. The Consumer Financial Protection Bureau (CFPB) has the following categories for student loan debt burden:
- Low: Monthly payment less than 8% of monthly income
- Medium: Monthly payment between 8% and 14% of monthly income
- High: Monthly payment greater than 14% of monthly income
A federal student loan for which 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.
Reduces the taxes owed.
Tax - Tax Credit=Taxes Owed
$1000 - $250 = $750
Reduces taxable income.
Income - Deduction=Taxable Income
$45,000 - $5,000 = $40,000
All income you are 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.
A form submitted to the Internal Revenue Service (IRS) and your state government on an annual basis reporting your income for the year.
Tax Withholding Allowances
An allowance an individual claims on a W-4 Form. A withholding allowance is mainly used to assist an employer in calculating the amount of income tax to withhold from an employee's paycheck.
A 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).
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.
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.
Income you do not pay taxes on, such as Supplemental Security income, child support, or federal, or public assistance.
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.
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.