GLOSSARY

Accredited:  The school must be accredited by a rating agency recognized by the Secretary of Education. Any school that meets standards established by a nationally recognized accrediting agency, and for which that agency has provided documented acknowledgment of the school’s compliance.

Accrediting Agency:  An agency that sets educational standards for schools, evaluates schools, and certifies that schools have met these standards. A “nationally recognized
accrediting agency” is one that the U.S. Department of Education has recognized to accredit or preaccredit a particular category of school or educational program. The agency grants accreditation status to schools.

Accrued Interest: Interest that has not yet been paid. This interest has accumulated since the date the accrued interest was last satisfied.

ACT: American College Testing (ACT) publishes the ACT Assessment Test, commonly known as the ACT. It is a standardized, multiple-choice test used by some colleges as part of the admissions process that is administered five times a year. The ACT measures academic achievement in four areas: English, Math, Reading, and Science.

Adjusted Gross Income (AGI): Taxable income from all sources. (See your federal income tax Form 1040 EZ, line three, or Form 1040, line 31.)

Adobe Acrobat Reader: A software program developed by Adobe Systems, Inc. for viewing electronic PDF (Portable Document Format) documents.

Adverse Action Letter: Form letter sent to applicants to decline loan.  Letter complies with Fair Credit Reporting Act

Aid Gap: The gap between the cost of attendance (COA) and the financial aid received by a student.  Financing higher education means more than just paying tuition expenses. Costs involved with attending college also include room & board, books, lab fees, student membership fees, spending money, etc.

Alternative Loans: Alternative Loans can fill the financial aid gap between what you receive from all financial aid sources and what you really need to cover the cost of your education. They differ from traditional non-education related bank or credit union loans in their terms. They generally allow the borrower to defer repayment and have lower interest rates.

Amortization Schedule: An amortization schedule will show the reduction of a loan balance from disbursement through payoff, after each of the projected monthly payments are applied to the account.

Arizona Nexus: Program where the state of Arizona contributes funds to lower the cost of borrowing through federal loans for students who attend Arizona schools. The results are better borrower discounts, like those currently offered by the Arizona Higher Education Loan Authority.

Assets: Items of financial worth which may include your home, business, savings and checking accounts, stock, bonds, real estate, trust funds, etc.

Automatic Debit: A payment program that allows you to authorize automatic deductions from your checking or savings account to cover monthly education loan payments.

Award Letter: This official document issued by a college's financial aid office lists all of the financial assistance offered to a student. (Loans, grants, scholarships, and work-study)

Borrower: The person to whom a loan is made and who agrees to repay it. The borrower signs a promissory note, which serves as the formal promise to repay the loan.

Browser: Short for Web Browser, a software application used to locate and display Web pages. The two most common browsers are Microsoft Internet Explorer and Netscape Navigator.

Capitalized Interest:  Accrued interest added to your outstanding principal. Subsequent interest accrues on the new total principal balance, which includes any capitalized interest.

COA (Cost of Attendance):  The total amount a student must pay to attend school for one academic year, including tuition, room and board, books, supplies, transportation, and personal expenses. A college's financial aid office determines this figure.

Co-borrower: An individual who, with the borrower, signs the promissory note and assumes equal liability for the loan. An example of a co-borrower is a spouse on a spousal consolidation loan.

COE (Cost of Education):  Total cost of education as determined by the school.

Cohort Default Rate:  Percentage of students who default on federal loans at a particular school. 

CommonLine Format:  Common file format used to exchange data between colleges, lenders, guarantors, and servicers.

Common Manual:  Book of agreed upon laws/regulations between states.  Also includes a list of state variations.

Common Record: CommonLine (CRC):  Latest incarnation of CommonLine.  Based on XML.  Loans can be processed real-time individually, or in batch mode.

Compound Interest: Interest computed on the sum of an original principal and accrued interest. All loans offered by AHELA are simple interest loans, not compound interest.

Consolidation Loan: Refinancing of a group of loans into a single new loan. Can result in a different interest rate and/or longer repayment period.

Cookies:  A message passed to a Web browser by a Web server. The browser stores the message in a text file called cookie.txt. The message is then sent back to the server each time that the browser requests a page from it. Manage Your Loans uses non-persistent cookies to maintain state information about users while they are actively using the system. The cookie is automatically removed from the user's browser when the browser is closed or the cookie expires.

Co-signer:  An individual other than the borrower who signs a promissory note and assumes liability for it should the borrower fail to make repayment. In some private loan programs, a co-signer may assume equal liability for the repayment of the loan.

Cost of Attendance (COA): The total amount a student must pay to attend school for one academic year, including tuition, room and board, books, supplies, transportation, and personal expenses. A college's financial aid office determines this figure.

Credit-based Loans: Loans (i.e. PLUS or Private loans) that are made to a borrower based on credit worthiness as opposed to federal Stafford loans and grants which are determined through a need analysis process based on the cost of education and individual income and assets.

Daily Interest Accrual Formula: The current principal balance multiplied by the interest rate, divided by 365.25.

Days Past Due: The number of days that have passed since the oldest unsatisfied payment due date.

Declining Balance: An illustration of the reduction in principal balance from the original amount to the present principal amount outstanding as a result of payments made that have been allocated to interest and principal.

Deductible Interest: Interest paid on a student loan that is deductible from your taxable income.

Default: Failure to make payments when due or to meet other terms of the promissory note. The promissory note outlines the specific information regarding the timing for default on each loan product. A FFELP loan defaults at 271 days, which is the day the claim is filed with the guarantor. CEL loans default at 120 days.

Deferment: A period of time during repayment in which the borrower, upon meeting certain conditions, is not required to make regular monthly payments. Note: Interest payments may or may not be postponed depending on the type of loan. Eligibility for various deferments is determined by the date that the borrower obtained their very first federal student loan. Deferments are applied towards all of the borrower’s eligible loans.

Available deferments programs are:

• ACTION Program: Covers full-time paid volunteer service with an organization participating in a program authorized under Title I of the Domestic Volunteer Act of 1973.
• Economic Hardship: Covers a borrower who earns less than minimum wage or exceeds a federally defined debt-to-income ratio. Also covers borrowers who are receiving public assistance or who are serving in the Peace Corps.
• Graduate Fellowship: Covers study under an eligible graduate fellowship program.
• In-School (Student): Covers both full-time and half-time study at eligible schools.
• Internship / Residency: Covers service in an internship program that is required to receive professional recognition needed to begin professional practice or service. Also covers service in a medical internship or residency training program that leads to a degree or certificate awarded by an institution of higher education, hospital, or a health care facility that offers postgraduate training.
• Military: Covers active duty status in the U.S. Armed Forces.
• National Oceanic and Atmospheric Corps: Covers active duty service in the National Oceanic and Atmospheric Administration Corps.
• Parental Leave: Covers a borrower who is pregnant or caring for their newborn or newly adopted child. Borrowers cannot be working full-time and must have been enrolled at least half-time in school six months prior to beginning the deferment.
• Peace Corps: Covers volunteer service under the Peace Corps Act.
• Primary Care Physician: Covers practicing primary care physicians that completed an internship in one of the following specialties: osteopathic general practice, family practice, general internal medicine, preventive medicine, general pediatrics.
• Public Health Service: Covers service as a full-time officer in the Commissioned Corps of Public Health of the U.S. Public Health Service.
• Rehabilitation Training Program: Covers a qualified individual’s participation in a rehabilitation-training program.
• Summer Bridge Extension: Covers summer months for students who are deferred through the end of the spring academic period and are planning to reenroll for the fall academic period.
• Tax-Exempt Organization Volunteer: Covers full-time paid volunteer service with a tax-exempt organization that the U.S. Department of Education has determined to be comparable to service as a Peace Corps or ACTION volunteer.
• Teacher Shortage Area (Targeted Teacher): Covers full-time teaching in a public or nonprofit private elementary or secondary school located in a teacher shortage area as defined by the U.S. Department of Education.
• Temporary Total Disability: Covers a period during which a borrower is temporarily totally disabled or unable to secure employment because they are caring for a dependent or spouse who is temporarily totally disabled.
• Unemployment: Covers individuals who are seeking, but unable to secure, employment in the United States. The borrower can be receiving unemployment benefits.
• Working Mother: Covers mothers of pre-school age children when the mothers are entering or reentering the workforce.

Delinquent: The status of a loan that begins on the day after the due date of a payment when the borrower fails to make the equivalent of one full payment.

Department of Education (DOE or ED): The US government department responsible for supporting and coordinating those aspects of education programs within the federal purview. Specific to higher education, “the Dept” (as it sometimes referred to) most commonly provides students helpful information about financial aid and universities and lenders with policies and procedures that must be followed.

Direct Lending School: Institutions of higher education that have chosen to place all of their students' federally insured student loans through the federal Direct Lending Program. Such colleges or universities may either participate exclusively in the Direct Lending Program or allow students (borrowers) to choose the lending program from which to borrow.

Direct Loan: A student loan issued under the William D. Ford Federal Direct Loan (Direct Loan) Program. The program includes Federal Direct Stafford/Ford (Direct Subsidized) loans, Federal Direct Unsubsidized Stafford/Ford (Direct Unsubsidized) loans, Federal Direct PLUS (Direct PLUS) loans, and Federal Direct Consolidation (Direct Consolidation) loans.

Disbursement Amount: The amount requested or approved for disbursement. This amount excludes origination, guarantee, and supplemental fees that are applicable to the loan program.

Disbursement Date: The date the funds were issued / sent to the school or escrow agent (if applicable).

Disbursement Notification: A letter that is sent to you acknowledging that your loan is approved and letting you know when the money will be sent to your school, as well as the loan amount and any fees (origination or guarantee). This marks the successful completion of the loan application process.

Disclosure statement:  A notification of the actual cost and terms of a loan, which includes the interest rate and any additional finance charges.

DOE: Department of Education (Also see ED)

Due Date:  The date your student loan payment is due each month.

Due Diligence: The procedures outlined by ED for attempting to satisfactorily resolve a delinquency and prevent a loan default. The procedures outline at which stage of delinquency attempts to contact the borrower should be made, and how those attempts should be made (phone calls, late letters, skip tracing, etc.)

EARP:  Electronic Application Record Processing

ED:  Department of Education (Also see DOE)

EFC (Expected Family Contribution):  The amount a family is expected to pay toward college costs. This amount is determined via the FAFSA process by a need analysis formula established by the federal government. The EFC amount is provided to the student in their Student Aid Report (SAR) and to the school on the Institutional Student Information Record (ISIR).

EFT: Electronics Fund Transfer. A method by which a school receives funds electronically.

Electronic Signature: An electronic signature is a process by which a borrower may sign their request via the Web. Submitting an electronic signature eliminates the need to print and mail the loan request and expedites the approval process.

Eligible Citizen:  A United States citizen, U.S. national, or resident of certain U.S. territories who qualifies to borrow under the FFEL or FDL student lending programs.

Eligible Non-citizen:  A permanent resident alien of the United States who is able to present evidence from the Immigration and Naturalization Service that he or she is in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident. (Permanent Resident Alien ID number must be provided.)

ELM:  An expanding database sponsored by various lenders and used by schools for the single point/tracking ability of details and status of a student loans.

ELM NDN:  ELM’s National Disbursement Network – Automates the disbursement process.

Employment (full-time):  Employment with at least a 30-hour work week that is expected to last at least three consecutive months.

Employment (part-time):  Employment with less than a 30-hour work week or employment in a position expected to last less than three consecutive months.

Employment Agency (Public):  An employment broker for the public sector. A person is often automatically registered with a public employment agency upon filing for unemployment benefits.

Employment Agency (Private):  An employment broker for the private sector.

Encrypted:  Scrambled or translated into secret code to prevent unauthorized access using an acceptable security protocol.

Enrollment Verification Form:  A form completed by your school and sent to your servicer to verify you are eligible for an in-school deferment.

Exit Interview: An in-person or online counseling session with the school's financial aid office before graduation or withdrawal to review the terms and obligations of your student loan.

Expected Family Contribution (EFC): The amount a family is expected to pay toward college costs. This amount is determined via the FAFSA process by a need analysis formula established by the federal government. The EFC amount is provided to the student in their Student Aid Report (SAR).

FAA/FAO:  Financial Aid Administrator or Financial Aid Officer

FAFSA:  The Free Application for Federal Student Aid (FAFSA) is a standard federal form used to determine your eligibility for most types of financial aid including federal government-backed loans. The FAFSA is typically completed early in the year and it requires income, asset, and tax information from the students and/or parents.

FAMS (Financial Aid Management Systems):  System of record used by schools to track financial aid requests.

FDLP (Federal Direct Loan Program):  Also known as the William D. Ford Federal Direct Loan Program.  With FDLP loans the U.S. Department of Education is the lender.

Federal Interest Subsidy:  The Federal Government's payment to lenders of accrued interest on subsidized Stafford loans (and some consolidation loans) while the borrower is in school, grace and deferment statuses.

Federal Loan:  Loans guaranteed by the U.S. government (Loan programs authorized in Title IV of the Higher Education Act).

Federal Perkins Loan:  Federally funded loans that bear a low interest rate and are awarded by the college based on need. The school administers Perkins loans.

Federal Supplemental Educational Opportunity Grant (FSEOG):  Government grants distributed by colleges, at their discretion, to students based on need.

Federal Work Study (FWS):  Jobs, typically on campus, that a student can work to earn federally funded money to help pay for the cost of education. Work-study is awarded as financial aid. The benefit of accepting work-study, rather than working off-campus, is that income from work-study is not calculated as income for purposes of the FAFSA. A portion of the Federal work-study funds must be earmarked specifically for community service jobs on or near campus.

FFELP (Federal Family Education Loan Program):  The Federal Family Education Loan Program. A loan program authorized by the federal government in the Higher Education Act of 1965, as amended. This program includes Federal Stafford, PLUS, and Consolidation Loans. These loans are funded by lenders, guaranteed by guaranty agencies and ultimately insured by the federal government.

Financial Aid Package: The total amount of monetary assistance available to the student including all grants, scholarships, work-study, and loans available from school, state, and federal programs, as listed in a college's financial aid award letter. It does not include alternative, non-federally guaranteed loans.

Financial Need: The difference between the total cost of attendance and the Expected Family Contribution. (COA – EFC = Financial Need)

First Payment Due Date: The date on which the first payment for a loan is due. The first payment must be 30 – 60 days from the date of disbursement or grace period end date, depending on the loan type.

Forbearance: A temporary cessation or reduction of payments due to financial difficulty. Forbearance is usually granted for periods up to twelve months at a time. You are responsible for all accrued interest during a forbearance period. Unpaid interest may be capitalized quarterly or at the end of the forbearance.

Available forbearances for FFELP loans include:

• Administrative: Granted to the borrower for payments of principal and interest that are overdue or that would be due in certain circumstances. An example of an administrative forbearance is a forbearance that is processed prior to a deferment when an account is past due. Also, a mandatory forbearance may be processed as an Administrative forbearance.
• Discretionary (voluntary): Assists a borrower in fulfilling the repayment obligations of the loan and to help prevent default. Situations in which the forbearance may be granted include, but are not limited to: personal financial problems, poor health, enrollment in a school or volunteer organization, or a request for change in due date or payment amount.
• Mandatory: Forbearance that the lender is required to grant for borrowers
• Who are in an internship/residency program but are not eligible for an internship/residency deferment
• Whose student loan debt exceeds 20% of their monthly income
• Who demonstrate eligibility through the National and Community Service Trust Act of 1993 (AmeriCorps)
• Who are eligible for Loan Forgiveness Demonstration Program for Child Care Providers
• Who are participating in a Student Loan Repayment Program administered by the U.S. Department of Defense

The borrower must request the forbearance and provide documentation of eligibility. These forbearance types may be reflected as Administrative Forbearance on your account.

FSEOG (Federal Supplemental Educational Opportunity Grant):  Government grants distributed by colleges, at their discretion, to students based on need.

FWS (Federal Work Study):  Jobs on campus for a student to earn federally funded money to help pay for the cost of education. Work-study is awarded as financial aid. The benefit of accepting work-study, rather than working off-campus, is that income from work-study is not calculated as income for purposes of the FAFSA. A portion of the Federal work-study funds must be earmarked specifically for community service jobs on or near campus.

Grace Period:  The six-month period that begins the day after a Stafford loan borrower ceases to be enrolled at least half time at an eligible school, ends the day before the repayment period begins, and during which payments of principal are not required. (CSCL loans have a sixty-day grace period. Perkins loans have a nine-month grace period.)

Graduated Repayment:  A repayment program that allows qualified borrowers to pay only interest for up to four years followed by gradual increases in monthly payments during years five through ten or remaining years. This allows borrowers to make lower payments when first beginning employment after leaving school.

Grants:  A form of financial aid, similar to scholarships that do not have to be repaid. (PELL, FSEOG, MAP, CALGRANTS, etc.)

Gross Income: Your income before taxes and deductions.

Guarantor / Guaranty Agency: A state or private nonprofit organization that has an agreement with the U.S. Secretary of Education to administer a loan guarantee program under the Higher Education Act. (USAF, CSAC, ECMC, ASA, ISAC, GLHEC, etc.)

Guarantee Fee:  A sum charged by the guarantor to insure a loan. The guarantee fee (sometimes called an insurance fee) is deducted from the principal amount of the loan and paid by the lender to the guarantor.

HEAL Loans: The discontinued HEAL (Health Education Assistance Loan) program provides federal insurance for educational loans made by participating lenders to eligible graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, public health, pharmacy, chiropractic, or in health administration and clinical psychology programs.

Higher Education Act of 1965:  Act that includes Title IV.  The purpose of this act was to make higher education accessible to more people.  Side benefits include: increase the tax base, make a larger number of people self-sufficient, create a population of educated voters, provide funding for low-income schools and childcare, mandate equal treatment of students based on age, sex, race, religion, etc.

Income Contingent Repayment:  A repayment schedule for some HEAL and Direct Loan program loans under which the monthly payment amount is adjusted annually, based on the total amount of loans, the family size, and the adjusted gross income (AGI) reported on the most recently filed federal income tax return. In the case of a married borrower who files a joint income tax return, the AGI includes the spouse’s income.

Income Sensitive Repayment:  A repayment schedule for some FFELP (Federal Family Education Loan Program) loans under which the monthly payment amount is adjusted annually, based solely on the borrower’s expected total monthly gross income received from employment and other income sources during the year.

Interest: The fee charged to borrow money from a lender, usually a percent of the outstanding amount, which accrues and is paid over the life of a loan.

Interest Rate: The percentage of a sum of money charged for its use.

Lender:  A financial institution that provides funds to a borrower.

Lender code:  A code given by the department of education for each financial institution that provides funds to the borrower as a part of the FFELP. A federal lender ID.

Lender list: A list compiled by the school of financial institutions that provide funds to the school’s students. Although a student may select any FFELP lender, the school will provide the student with it’s ‘preferred lender list’ during the financial aid process.

Loan: A sum of money borrowed (principal) usually for a specific reason (e.g., to obtain an education, buy a car, etc.). The entity lending the money (e.g. a bank) usually charges interest for use of the money. The amount of money borrowed is typically repaid with interest over a period of time.

Loan Balance:  The total unpaid amount of a specific loan. This sum includes outstanding principal, capitalized interest, accrued interest, late charges, and any miscellaneous fees such as returned payment fees.

Loan Forgiveness:  Programs that offer partial or complete loan forgiveness based on service/participation in teacher shortage areas, child-care provider careers, and Ameri-corps jobs.

Loan Origination:  Phase within the life of a loan that includes accepting/reviewing application, making credit decision, and disbursing funds to a borrower or school.

Servicer: A company that manages loans once in the repayment phase. This includes posting payments, distributing bills, and handling inquiries from borrowers.

Loan Status:  The current status of your loan or loan application. The loan statuses are:

General Statuses:

• Grace: Borrower/student has withdrawn, dropped to less than halftime or graduated from school, but repayment period has not yet begun.
• In School: Borrower/student currently in school.
• Repayment: Period when a monthly payment is due.

Forbearance Statuses:

• Admin Forbearance: An administrative forbearance. This forbearance can be processed without the borrower's request. It is used to clear delinquency prior to a deferment, after a deferment or mandatory forbearance, during periods of bankruptcy, and when an account is less than 60 days past due at purchase.
• Disaster Forbearance: A forbearance due to a disaster. This is granted to borrowers living in a federally declared natural disaster area. The begin and end dates of the forbearance are determined by the U.S. Department of Education.
• Voluntary Forbearance: A voluntary forbearance has been processed. The borrower must agree in writing to the terms of this forbearance. The servicer is permitted to use discretion in determining whether a borrower should be granted this type of forbearance.
• Intern Forbearance: A forbearance due to internship for borrowers who have used their maximum internship deferment time or who do not qualify for the internship deferment based on their promissory note.
• Extension Forbearance: A forbearance for private loan borrowers during a period of hardship.

Deferment Statuses:

• Fellowship Deferment: (For FFELP, HEAL, AND HEAL Relief loans) A deferment for a borrower who is completing fellowship requirements.
• Grace Deferment: (For FFELP loans) A post-deferment grace period for applicable FFELP loans.
• Hardship Deferment: (For FFELP loans) A deferment due to economic hardship.
• In School Deferment: (For FFELP loans) A deferment for eligible borrowers who are currently enrolled in school at least half-time.
• Internship Deferment: (For FFELP, HEAL, AND HEAL Relief loans) A deferment for eligible borrowers pursuing internship or residency.
• Military Deferment: (For FFELP loans) A deferment for eligible borrowers on active military service.
• NOAA Deferment: (For FFELP loans) A deferment for eligible borrowers serving in the National Oceanic Atmospheric Administration.
• Parent Leave Deferment: (For FFELP loans) A deferment for eligible borrowers on parental leave while caring for a newborn.
• Peace Corps Deferment: (For FFELP loans) A deferment for eligible borrowers in the Peace Corps.
• Primary Care Deferment: (For HEAL loans and HEAL Relief loans only) A deferment for borrowers who are establishing a primary care physician practice.
• Public Health Deferment: (For FFELP loans) A deferment for eligible borrowers serving in public health.
• Rehab Deferment: (For FFELP loans) A deferment for eligible borrowers engaged in a mental or physical rehabilitation training program.
• SLS Grace Deferment: (For SLS loans only) A deferment for loans in grace status due to delayed commencement of repayment.
• Summer Deferment: (For FFELP loans) A deferment for a borrower who has just completed the spring semester and will be continuing in the fall. This deferment covers the summer months between those semesters.
• Tax Exempt Deferment: (For FFELP loans) A deferment for eligible borrowers with a tax-exempt status.
• Teacher Deferment: (For FFELP loans) A deferment for eligible borrowers who are teaching in a teacher shortage area that has been approved by the U.S. Department of Education.
• Temp Disable Deferment: (For FFELP loans) A deferment for eligible borrowers who are temporarily totally disabled or are caring for a spouse or dependent who is disabled.
• Unemployment Deferment: (For FFELP loans) A deferment for eligible unemployed borrowers.
• Volunteer Deferment: (For FFELP loans) A deferment for eligible borrowers serving as a volunteer in a program approved by the U.S. Department of Education.
• Working Mom Deferment: (For FFELP loans) A deferment for eligible working mothers of a pre-school child or children.

Paid Statuses:

• PAID/Borrower: Loan paid in full by borrower.
• PAID/Consolidation: Loan paid in full by consolidation.
• PAID/Guarantor: Loan paid in full by guarantor. Does not release borrower from debt.

Application Statuses:

• Application Approved: Application approved; awaiting disbursement.
• Application Cancelled: Application has been cancelled.
• Application In Process: Application has been received and is being processed.
• Application Incomplete: Application in process; additional information or clarification needed from borrower, school, or guarantor.
• Awaiting Application: Application has been received and awaiting completion.
• Awaiting Guarantee: Application sent to guarantor for approval.

Loan Terms: Includes the amount you are borrowing, the interest rate and fees associated with the loan, the length of the repayment period, and the amount of and conditions under which late fees and collection costs may be assessed.

LVC:  Lender Verification Certificate

Monthly Due Date:  Date the regularly scheduled monthly payment is due.

Monthly Income:  Amount of monthly income from employment and other sources before taxes and other deductions or one-twelfth of the amount of your income reported as adjusted gross income on your most recently filed federal income tax return. You may choose either of these income amounts for the purpose of reporting your monthly income on an economic hardship deferment request.

Master Promissory Note (MPN): Master Promissory Note refers to the revised promissory note, which the Department of Education has authorized to be used with Stafford loans and PLUS loans. It allows lenders to use a single MPN instead of requiring borrowers to sign a new promissory note for additional loans each school year.

National Student Loan Clearinghouse: An organization that helps schools report enrollment updates. Schools who use this organization electronically transmit enrollment information to the Clearinghouse, which transmits the enrollment information to the relevant servicers.

NDN: National Disbursement Network is an ELM based service that provides schools with control over disbursement dates, cancellations and refunds, and reports, while streamlining the delivery of FFELP and private loan funds. Lenders will disburse funds by placing the funds with the NDN. The NDN will then distribute those funds to participating schools and then inform the lender that the disbursement has been made.

Next Payment Due Date: The date the next scheduled monthly payment is due.

Non-Direct Lending Schools: Institutions of higher education which have chosen to place their students' federally insured student loans through the Federal Family Education Loan (FFEL) program. In the FFEL program, borrowers choose a lender from which to borrow and the lender then obtains a loan guarantee from a state or private guarantee agency.

NSLDS: National Student Loan Database System.

Original Balance: The initial principal amount borrowed.

Original Principal Balance: The total amount of principal owed on a loan before any payments are made.

Origination Fee:  A fee charged to offset the cost of interest, special allowance, and reinsurance payments by the federal government on a FFELP loan.

Outstanding Interest:  The amount of unpaid interest. This amount can include accrued interest and capitalized interest.

Outstanding Principal Balance:  The outstanding amount of the loan on which the lender charges interest.

Parent Loans for Undergraduate Students (PLUS) Loans:  Loans made to parents of dependent undergraduate students based on credit worthiness rather than financial need. Parents can borrow up to the total cost of education, minus any financial aid the student will receive. The parent is responsible for repaying the loan in full within 60 days of disbursement.

Past Due Amount:  The amount delinquent on the loan.

Payment Schedule:  A summary of the terms of a loan, which includes the total principal amount, the date payment begins and the interest rate.

Payoff Balance:  This is the total amount you would owe if you were to pay off your entire loan. It includes the outstanding principal plus any unpaid accrued interest.

PDF: Short for Portable Document Format, a file format developed by Adobe Systems, Inc. that presents a document electronically as it would appear on paper.

Pell Grants:  One of the largest sources of grants, Pell Grants are distributed by the federal government and are designed to help students with financial need pay for college.

Perkins Loans:  A campus-based, low interest loan for graduate and undergraduate students. The college acts as the lender using a limited pool of funds provided by the federal government. These loans are awarded based on exceptional financial need. Formerly known as National Direct Student Loans (NDSL), these loans are made only to the student and carry the very low interest rate of 5%.  Payment begins only after the student graduates, leaves school, or drops below half-time status. No interest accrues during the college years, and students have up to ten years to repay. Although the money comes from the government, these loans are administered through the financial aid office. The federal government gives the college a lump sum every year, but the Financial Aid Officer gets to decide which students receive these loans and how much they receive, based on need. Undergraduates can borrow up to $4,000 per year, with a cap of $20,000. Students must show a strong degree of need to be granted these loans. Perkins loans have a nine-month grace period.

PLUS (Parent Loans for Undergraduate Students) Loan: A low interest education loan for parents of undergraduate dependent students. The PLUS loan allows you to obtain funding to cover the entire cost of the student's education (less student financial aid).

PLUS Loan Pre-Approval: A pre-screening of credit to pre-qualify parents who are concerned with their credit history to determine their eligibility for a Federal PLUS loan. A loan application must then be completed to obtain the PLUS loan.

Poverty Line Amounts: A federal poverty measure issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are used to determine financial eligibility for certain federal programs and deferments.

Principal / Principal Balance: The outstanding amount of the loan on which the lender charges interest. As the loan is repaid, a portion of each payment is used to satisfy interest that has accrued and the remainder of the payment is applied to the outstanding principal balance.

Privacy Practices: The ways in which financial institutions use and protect personal information about individuals who obtain financial products or services from them.

Private Loan: Private loans provide supplemental funding when other financial aid does not cover costs. Banks or other financial institutions and schools offer these loans (not sponsored by the federal government).

Promissory Note: A legally binding agreement you sign to obtain a loan, in which you promise to repay the loan (with interest and applicable late fees and/or collection costs) in periodic installments. The agreement also includes information about any grace period, deferment, or cancellation provisions and your rights and responsibilities in respect to the loan.

Quarterly Interest Statement: A statement to show you how much interest has accrued on your loan during periods of forbearance or while in school or in deferment for unsubsidized loans.

Repayment Period: This is the amount of time during which you repay the money borrowed plus interest.

Residency: The period in which a medical student receives specialized clinical training.

SAP (Satisfactory Academic Progress): SAP is a major factor in continuing to receive student financial aid. Federal law requires each postsecondary school to establish, publish, and apply reasonable standards for measuring if a student is maintaining SAP.

SAP (Special Allowance Payments):  A percentage of the daily average unpaid principal balance, paid to a lender by the Department on an eligible Stafford, PLUS, SLS, or Federal
Consolidation loan. Special allowance payments act as an incentive for lenders to make education loans by, in effect, making up the difference between the interest rate charged to a FFELP borrower and market interest rates. The special allowance rate is set by statutory formula.

SAR (Student Aid Report): A report sent to a student by the government 4 to 6 weeks after submitting a FAFSA. The report informs the student of the Expected Family Contribution (EFC) and the financial aid for which the student is eligible. College financial aid offices use the report information to build a financial aid package for a student.

SAT: The Scholastic Aptitude Test (SAT) is a seven-section, three-hour exam that is administered seven times a year. Three of the sections are verbal, three are math, and one is experimental. The experimental section can be either verbal or math. It is used by the test-makers for research purposes only and will not count toward your final score.

ScholarNet:  Great Lake’s proprietary loan clearing house.  Analogous to ELMNet

Scholarships:  Scholarships, like grants, are a form of financial aid that do not have to be repaid. These are available from many sources including community groups, schools and private corporations. Scholarships can be awarded based on a variety of criteria including scholastic achievement, hobbies and college majors.

Secondary Market: An entity that purchases education loans from eligible lenders in order to increase the amount of funds available for education loans. The secondary market obtains funds from investors and uses those funds to purchase existing education loans from lenders. The lenders then use the proceeds of those sales to make new education loans.

Simple Interest: Interest paid or computed on the original principal only of a loan or on the amount of an account. This amount accrues daily and is not capitalized unless specified in the loan agreement.

Stafford Loan: A federally guaranteed loan program that allows students to borrow funds. Stafford loans allow a student to defer payments while they are in school. Stafford loans can be either subsidized or unsubsidized.

Statement of Account History:  History of payments applied to an account, as well as capitalized interest and loan disbursements charged to an account.

Student Aid Report (SAR)  : A report sent to a student by the government 4 to 6 weeks after submitting a FAFSA. The report informs the student of the Expected Family Contribution (EFC) and the financial aid for which the student is eligible. College financial aid offices use the report information to build a financial aid package for a student.

Student Loan Interest Deduction: The Student Loan Interest Deduction is part of the Taxpayer Relief Act of 1997.The Taxpayer Relief Act of 1997 permits borrowers to deduct from their federal income tax return the amount of interest they have paid during the tax year on any qualified education loan for the period of time as defined by law.

Student Loan Interest Statement: Form 1098-E issued from the financial institution, from a governmental unit (or any of its subsidiary agencies), from educational institutions, or any other person to whom you had paid student loan interest of $600 or more in the calendar year.

Subsidized Loan:  A student loan eligible for interest benefits paid by the federal government. The federal government pays the interest that accrues on subsidized loans during the following periods: in-school, grace, authorized deferment, and (if applicable) post-deferment grace periods if the loan meets certain eligibility requirements.

Title IV:  Refers to a section of the 1965 Higher Education Act, which authorizes funding for federal loans.  All types of schools (universities, colleges, junior colleges, trade schools) can qualify for Title IV status if they meet the following requirements:

• Accredited
• Have been in existence for x (3?) years
• Comply with basic civil rights laws (e.g. cannot ban interracial dating, exclude minorities, provide equal programs for men and women, etc)
• Administer Title IV funds according to HEA regulations

Call the Federal Student Aid Information Center (FSAIC) toll-free to find out if a particular school is an eligible institution 800/4FED-AID (800/433-3243).

Title IV School Codes: School identification codes assigned by the Department of Education.

Total Amount Outstanding: Unpaid balance of the loan including outstanding principal balance and accrued interest.

Trans Union: One of 3 large credit bureaus that are used for pulling credit reports.

Truth in Lending:  A requirement that lenders fully disclose credit terms and conditions, the annual percentage rate and other mortgage financing charges in writing to the borrower within three business days.

TRW:  One of 3 large credit bureaus that are used for pulling credit reports.

Unemployment Benefits:  Temporary and partial wage replacement paid to workers who have become unemployed through no fault of their own.

Unsubsidized Federal Stafford Loan: This is a non-need-based, long-term, low-interest loan designed to provide undergraduate and graduate students with additional funds for their education. Unsubsidized means students are responsible for the interest on a loan while in school and during periods of grace and deferment. However, payment can be postponed while the student is in school (and after school under certain circumstances – see deferments & forbearances). Virtually all students who fill out a FAFSA are eligible for these loans. From the moment a student takes out an unsubsidized Stafford loan, however, he or she will be charged interest. Students are given the option of paying the interest while in school or deferring payments (which will continue to accrue) until repayment of principal begins.

Variable Interest Rate: An interest rate that changes according to prescribed methods.

Work-Study (FWS or Federal Work Study): Part of the federal Student Financial Assistance Program that provides part-time employment for post-secondary students who need income to help meet education costs.

W9-S: This is an IRS form which taxpayers use to certify that loans meet the definition of qualifying education debt and which allows lenders to report to the IRS the amount of interest paid on student loans as interest which qualifies for possible tax deductions.

91-day T-Bill: Refers to the auction rate determined for 91-day Treasury Bills by the public auction held by the United States Treasury Department. The

interest rates for Stafford and PLUS loans are tied to the auction rates held at certain times of the year. The rate(s) can be obtained from the Treasury Department.