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A
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Award Letter
The notification sent by the school listing the types and amounts of financial aid awarded.
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C
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COA-Cost of attendance
The annual amount it will cost to attend a specific school. This includes tuition and fees, room and board, books and supplies, transportation costs, and personal expenses.
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Co-signer
A credit-worthy individual who signs the promissory note when the borrower has insufficient credit. The co-signer guarantees the loan will be repaid.
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D
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DRN-Data Release Number
The 4-digit number on the Student Aid Report (SAR) required to make changes via the telephone or electronically. The school may need this number to access a student's SAR electronically.
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Default
Occurs when a borrower fails to repay a loan in accordance with the terms of the promissory note. Defaulted loans can negatively affect a borrower's credit rating for many years.
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Default Fee
A fee the guaranty agency puts in an insurance fund that protects the lender against any loan default.
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Deferment
A temporary period during which no student loan payment is due. Interest payments can be made, but if they are also postponed the interest is capitalized and added on to the principal.
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Delinquency
Failure to make a scheduled loan payment. After 60 days, delinquency will be reported to the national credit bureaus and will negatively affect your credit rating.
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Dependent Student
A student who is being financially supported by his or her parents or does not meet any of the criteria set by the federal government to have independent student status.
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Disclosure Statement
This statement is required by law and notifies the borrower of the amount being borrowed, anticipated disbursement date, and fees deducted from the principal.
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E
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Entrance Interview
Before the first loan disbursement can be put on the student's account, the student is required to go through an entrance interview to acknowledge the debt he or she is about to incur.
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Exit Interview
Before the student graduates or leaves school he or she is required to go through the exit interview in which information is given on repayment obligations.
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EFC-Expected Family Contribution
The EFC is used to determine your eligibility for federal student aid, by measuring your family's financial strength based on income and assets. Within 4-6 weeks of filing the FAFSA, you will receive a Student Aid Report (SAR). The SAR will report your Expected Family Contribution.
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F
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FAFSA-Free Application for Federal Student Aid
This form collects family income and asset information to determine your eligibility for financial aid. Filling out this from is your first step to applying for financial aid. To apply online go to www.fafsa.ed.gov.
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Federal Perkins Loan
A federally funded low-interest loan program administered by the school.
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Federal PLUS Loan-Parent Loan for Undergraduate Students
Enables parents to borrow money to pay for their child's education expenses. The interest rate is fixed at 8.5%. Parents can borrow up to the cost of attendance less financial aid. Repayment begins within 60 days after the final loan disbursement for parents. However, some lenders allow Parent PLUS Loans to be deferred up to 48 months while the student is in school.
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Federal Stafford Loan
Enables undergraduate and graduate students to borrow money to pay for their education expenses. The current rate is fixed at 6.8%, and the loan can be subsidized or unsubsidized.
- Subsidized is a loan in which the federal government pays the interest while in school, during the grace period and during periods of authorized deferment. It is based on financial need.
- Unsubsidized is a loan in which the student is responsible for the interest while in school, during the grace period and during authorized periods of deferment and forbearance. It is not based on financial need.
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Financial Aid Award Package
The total amount of financial aid the student receives including grants, scholarships, work-study, and loans.
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Financial Need
The cost of attendance minus the Expected Family Contribution. It is the basis for most financial aid awards.
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Forbearance
A period of time, granted at the lender's discretion, during which no loan payments of the principal is required. The borrower must prove that he or she is willing, but unable to make payments.
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G
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Grace Peiod
The period of time before the repayment of the principal begins following graduation or leaving school.
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Guaranty Agency (Guarantor)
The agency that insures the federal student loans made by lenders.
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H
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Half-Time Student
A student must be enrolled at least half-time to qualify for a student loan or in-school deferment.
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I
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Independent Student
A student who is at least 24 years old, or meets the criteria set by the Federal Government.
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L
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Lender
The actual source providing the funds being borrowed. It could be a bank, credit union, financial institution, the federal government, or even the school—as in the case of a Federal Perkins Loan.
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Loan Consolidation
A method of combining several loans into a single loan with an extended repayment term. This can be an effective way of lowering your monthly payments.
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Loan Disbursement
The release of the student's loan funds to the school. Loan disbursements are usually made in multiple, equal installments.
- Check Disbursement - The loan is disbursed by check to the school and must be endorsed by the borrower and the school.
- EFT- Electronic Funds Transfer - The loan disbursement is sent to the school by wire transfer.
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Loan Servicer
Is contracted by the lender to manage the day-to-day bill collection and payment processing of the loan on the lender's behalf.
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M
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MPN-Master Promissory Note
The MPN is a single promissory note with a multi-year feature. Only one note is required for multiple loans or years at participating schools. See Promissory Note for more information.
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N
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Needs Analysis
The process used to determine the student's eligibility for financial aid.
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NJHESAA-New Jersey Higher Education Student Assistance Authority
This agency authorizes guarantees for Federal Stafford and PLUS loans, as well as administers New Jersey Tuition Aid Grants.
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O
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Origination Fee
The fee that is automatically deducted from the principal loan amount and paid to the Federal Government for originating the loan.
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P
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PHEAA-Pennsylvania Higher Education Assistance Agency
This agency authorizes guarantees for Federal Stafford and PLUS loans, as well as administers PHEAA State Grants.
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PIN (Personal Identification Number)
The 4-digit number that is required to sign FAFSA forms electronically. Both student and parent need their own PIN numbers. It is also required to make electronic SAR corrections. To request a PIN, visit www.pin.ed.gov or call 1-800-801-0576.
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Principal
The amount borrowed. The student must repay the total loan principal plus interest.
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Promissory Note
A legally binding document that the borrower signs before he or she receives a loan promising to repay the loan. The note includes information about the terms and conditions of the loan.
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R
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Repayment Schedule
A document provided by the lender that lists the amount owed, amount of monthly payments, the date the payments are due, and length of repayment for your federal loans.
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S
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SAR-Student Aid Report
Within 4-6 weeks of filing the FAFSA, you will receive a Student Aid Report (SAR). This report is used by the school to determine the student's eligibility for financial aid.
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T
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Term
The length of time you have to repay your loan, usually up to 10 years for federal student loans.
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U
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Unmet Need
The cost of attendance minus the financial aid award.
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USA Funds-United Student Aid Funds
A non-profit agency that authorizes guarantees for Federal Stafford and PLUS Loans.
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Equal Housing Lender - Member FDIC
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