Paying For College

Terms in this set (41)

Award Letter
A letter that outlines your financial aid package from the college(s) to which you applied, detailing your federal, state, institutional and private financial aid
Capitalized Interest
Unpaid interest that has been added to the principal balance of a loan
Cosigner
Someone who legally agrees to take responsibility for a person's debt if they cannot repay it
Cost Of Attendance
Total expense of going to college which may include tuition, room and board, fees, books and supplies, transportation, health insurance, etc. Also known as Sticker Price or a school's published price.
Default
Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score
Deferment
A process that allows a borrower to pause their federal student loan payments; interest does NOT accrue during this time period on subsidized loans
Delinquency
Describes the status of being behind on one or more loan payments
Direct Plus Loans
A federal loan available to 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
Direct Subsidized Loan
A federal student loan available to undergraduate students; the federal government pays interest on the loan as long as the student is in school at least part-time
Direct Unsubsidized Loan
A federal student loan available to undergraduate and graduate students; the student is responsible for paying the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into the principal amount of their loan
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.
Entrance Counseling
A mandatory information session which takes place before a student receives their first federal student loan. It explains their rights and responsibilities as a student borrower.
Expected Family Contribution (EFC)
An index number used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your Free Application for Federal Student Aid (FAFSA) form. It's reported to you on your Student Aid Report (SAR).
Exit Counseling
A mandatory information session which takes place when a student graduates, leaves school, or attends school less than half-time. It explains the student's loan repayment responsibilities and when repayment begins.
Federal Student Aid
The largest form of student aid in the country; federal aid programs come in the form of government grants, loans, and work-study opportunities
Fixed-Rate Loan
A loan with an interest rate that does not change over the life of the loan
Forbearance
A process that allows a borrower to pause their federal student loan payments; interest continues to accrue during this time period and may be capitalized
Free Application For Federal Student Aid (FAFSA)
A free online application that current or prospective college students can submit each year to determine their eligibility for financial aid
Gift Aid
Financial aid that does not have to be paid back, such as scholarships and grants
Grace Period
A period of time during which a borrower is typically not required to make loan payments. This period generally begins on the day after a borrower graduates, leaves school, or drops below half-time enrollment and ends on the day before the repayment period begins.
Grants
Student aid coming from the state or federal government, the school, or from private sources that does not need to be repaid
Interest Rate
The rate charged for borrowing money usually expressed as a percent of the amount borrowed
Loan Refinancing
A process that REPLACES one or more existing federal or private loans with a new private student loan, ideally with a lower interest rate
Loan Consolidation
A process that allows a borrower to COMBINE multiple federal loans into one, allowing the borrower to make one monthly payment. The new interest rate of the loan is a weighted average of the prior loans' rates.
Loan Servicer
The organization that collects payments on a loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a loan on behalf of a loan holder
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
Needs
Expenses that are essential for you to be able to live and function
Net Price
The actual cost a student pays to attend a school, calculated as the sticker price minus grants and scholarships
Pell Grant
A federal grant usually awarded to undergraduate students who display exceptional financial need and have not earned a bachelor's, graduate, or professional degree. This grant does not have to be repaid.
Prepayment Penalty Fee
A fee that some lenders charge if you pay off all or part of your loan early
Principal
Original amount of money borrowed, separate from interest or fees
Repayment Period
The maximum time period over which you must repay your student loan -- currently between 10 and 30 years for Federal loans
Repayment Plan
A plan that outlines your monthly loan payment, repayment period, and how much interest you will pay over the life of the loan
Room And Board
Cost of housing and food while at college
Scholarship
A type of aid primarily awarded for academic merit (good grades) or for something you have accomplished (volunteer work, athletics, etc) that does not need to be repaid
Sticker Price
Total expense of going to college which may include tuition, room and board, fees, books and supplies, transportation, health insurance, etc. Also known as Cost of Attendance or a school's published price.
Student Aid Report (SAR)
The report you receive after submitting your FAFSA. It contains your EFC, Pell Grant eligibility, whether you've been selected for verification, and all other information that colleges will use to determine your financial aid package.
Work-Study
A federal program that provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses
Tuition
The sticker price for the academic portion of your college expenses, which does not include room and board, textbooks, or other fees
Variable-Rate Loan
A loan in which the interest rate can change, based on prime rate or index rate, over the course of the loan
Wants
Expenses that help you live more comfortably
Sets with similar terms