AGI = Adjusted Gross Income = Your or your family’s wages, salaries, interest, dividends, etc., minus certain deductions from income as reported on a federal income tax return.
Consolidation = The process of combining one or more loans into a single new loan.
COA = Cost of Attendance = The total amount it will cost you to go to school—usually stated as a yearly figure. COA includes tuition and fees; room and board (or a housing and food allowance); and allowances for books, supplies, transportation, loan fees, and dependent care. It also includes miscellaneous and personal expenses, including an allowance for the rental or purchase of a personal computer; costs related to a disability; and reasonable costs for eligible study-abroad programs. For students attending less than half-time, the COA includes tuition and fees and an allowance for books, supplies, transportation, and dependent care expenses, and can also include room and board for up to three semesters or the equivalent at the institution. But no more than two of those semesters, or the equivalent, may be consecutive.
Default = Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. You may experience serious legal consequences if you default.
Deferment = A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s).
Delinquent = A loan is delinquent when loan payments are not received by the due dates. A loan remains delinquent until the borrower makes up the missed payment(s) through payment, deferment, or forbearance. If the borrower is unable to make payments, he or she should contact his or her loan servicer to discuss options to keep the loan in good standing.
Dependency Status = The determination of a FAFSA applicant as dependent or independent.
Dependent Student = A student who does not meet any of the criteria for an independent student. An independent student is one of the following: at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, someone with legal dependents other than a spouse, an emancipated minor or someone who is homeless or at risk of becoming homeless.
Disbursement = Payment of federal student aid funds to the student by the school. Students generally receive their federal student funds in two or more disbursements.
Entrance Counseling = A mandatory information session which takes place before you receive your first federal student loan that explains your responsibilities and rights as a student borrower.
Exit Counseling = A mandatory information session which takes place when you graduate or attend school less than half-time that explains your loan repayment responsibilities and when repayment begins.
EFC = Expected Family Contribution = This is the number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your FAFSA®, the application for federal student aid. Your EFC is reported to you on your Student Aid Report (SAR).
FAFSA = Free Application for Federal Student Aid = is a free application used to apply for federal student aid, such as federal grants, federal loans and work-study. It is filed with Federal Student Aid, a part of the US Department of Education
Federal Student Aid Programs = The programs authorized under Title IV of the Higher Education Act of 1965 that provide grants, loans and work-study funds from the federal government to eligible students enrolled in college or ca…
Federal Student Loan = A loan funded by the federal government to help pay for your education. A federal student loan is borrowed money you must repay with interest.
Financial Need = The difference between the cost of attendance (COA) at a school and your Expected Family Contribution (EFC). While COA varies from school to school, your EFC does not change based on the school you attend.
FSA ID = is a username and password combination that serves as a student’s or parent’s identifier to allow access to personal information in various U.S. Department of Education systems and acts as a digital signature on some online forms.
Grant = Financial aid, often based on financial need, that does not need to be repaid (unless, for example, you withdraw from school and owe a refund).
Independent Student = An independent student is one of the following: at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse, an emancipated minor or someone who is homeless or at risk of becoming homeless. Get additional information to determine your dependency status.
Interest = A loan expense charged for the use of borrowed money. Interest is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.
Interest Rate = The percentage at which interest is calculated on your loan(s).
Lender = The organization that made the loan initially; the lender could be the borrower’s school; a bank, credit union, or other lending institution; or the U.S. Department of Education.
Loan Servicer = A company that collects payments, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a lender. If you’re unsure of who your federal student loan servicer is, you can look it up at nslds.ed.gov.
Master Promissory Note = A binding legal document that you must sign when you get a federal student loan. The MPN can be used to make one or more loans for one or more academic years (up to 10 years). It lists the terms and conditions under which you agree to repay the loan and explains your rights and responsibilities as a borrower. It’s important to read and save your MPN because you’ll need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearances.
Merit-based = Based on a student’s skill or ability. Example: A merit-based scholarship might be awarded based on a student’s high grades.
Need-based = Based on a student’s financial need. Example: A need-based grant might be awarded based on a student’s low income.
Pell Grant = A federal grant for undergraduate students with financial need.
PLUS Loan = Parent Loans for Undergraduate Students = loans that are available to parents, stepparents or graduate students. It is a credit-based (not a need-based) loan.
Room and Board = An allowance for the cost of housing and food while attending college or career school.
SAP = Satisfactory Academic Progress = A school’s standards for satisfactory academic progress toward a degree or certificate offered by that institution.
Scholarship = Money awarded to students based on academic or other achievements to help pay for education expenses. Scholarships generally do not have to be repaid
Subsidized Loan = federal direct loan that is need-based with the interest being paid by the government while the principal is deferred as long as the student is enrolled at least part-time
Unsubsidized Loan = federal direct loan that is not based on need and while the principal is deferred, the student will be responsible for the interest while enrolled.
Verification = the Department of Education randomly selects individual students for the process of verification, which requires students and parents to verify the information that was entered into the FAFSA with additional documents. Your school has the authority to contact you for documentation that supports income and other information that you reported.
Work-Study = A federal student aid program that provides part-time employment while you are enrolled in school to help pay your education expenses.
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