Dictionary
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AA
An associate of arts degree. Can
be earned at most two-year colleges.
AAS
An associate of applied science
degree. Can be earned at some two-year colleges.
Academic
Year
A period of time schools use to
measure a quantity of study. For example, a school's academic
year may consist of a fall and spring semester, during which a
student must complete 24 semester hours. Academic years vary
from school to school, and even from educational program to
education program at the same school.
Accrued
Interest
Interest that accumulates on the
unpaid principal balance of a loan.
Achievement Tests
Tests required by some colleges to
measure student achievement in specific areas of study such as
English, Math or Science.
ACT
A test published by American
College Testing to measure a student's ability in math, verbal
comprehension and problem solving. Usually students take this
test during their junior or senior year of high school.
Adjusted Gross Income (AGI)
All taxable income less IRS
allowable adjustments to income. This figure is from U.S. IRS
tax forms.
Advanced Placement Test
Test used to earn credit for
college subjects studied in high school. They are offered by
the Educational Testing service (ETS) in the spring. AP tests
are scored on a scale from 1 to 5 (the best possible score).
Aid Package
A combination of financial aid
(scholarships, grants, loans, and/or work study) determined by
the financial aid office of a college or university.
Alternative Mortgage
Products
7/23 and 5/25 mortgages—Mortgages
with a one-time rate adjustment after seven years and five
years respectively.
Amortization
The process of gradually repaying
a loan over an extended period of time through periodic
installments of principal and interest.
Annual Percentage Rate
(APR)
The cost of credit as a yearly
rate or interest rate reflecting the first-year rate including
certain points and credit costs.
Annual Percentage
Yield (APY)
Percentage, required by Truth in
Savings regulations to be disclosed on interest-bearing
deposit accounts, that reflects the total interest to be
received, based on an institution's compounding method for a
365-day year.
Appraisal
Fee
The charge for estimating the
value of property offered as security.
Adjustable Rate
Mortgage (ARM)
Mortgage in which the rate of
interest is adjusted based on a standard rate index. Most ARMs
have a cap on how much the interest rate may increase.
Asset
Property that can be used to
repay debt, such as stocks and bonds or a car.
Automated Teller
Machines (ATM)
Electronic terminals located on
bank premises or elsewhere, through which customers of
financial institutions may make deposits, withdrawals, or
other transactions as they would through a bank teller.
Average Annual Yield
The average yield per year over
the life of the investment, assuming all principal and
interest remain on deposit until maturity.
Award
Letter
An official document issued by a
financial aid office listing all the financial aid awarded to
the student. The award letter will include information about
the cost of attendance and terms and conditions for the
financial aid.
BA or BS
BA stands
for bachelor of arts, and BS stands for bachelor of science.
Both degrees can be earned at four-year colleges. The type of
degree awarded depends on the kinds of courses offered at the
particular school.
Bad Credit
A negative
rating from the credit reporting agencies. Many factors can
contribute to someone getting a "bad credit" rating, among
these are non-payment of an account or late payments over an
extended length of time. Whether non-payment of an account is
willful or due to financial hardship, the result can be the
same, a negative rating. However, lenders are more willing to
work with individuals if the person contacts the lender to let
them know they are having problems meeting their commitment to
pay.
Balloon
Loan in
which little, if any, of your monthly payments go toward
paying off the outstanding balance. Rather, one large,
lump-sum payment is due at maturity.
Balloon
Payment
A large
extra payment that may be charged at the end of a loan or
lease.
Bankruptcy
A person is
declared bankrupt, when found to be legally insolvent and the
person's property is distributed among creditors or otherwise
administered to satisfy the interests of creditors. Generally,
Federal student loans cannot be discharged through bankruptcy.
Base-Year
The tax year
prior to the academic year (award year) for which financial
aid is requested. Financial information from this year is used
to determine eligibility for financial aid.
Billing
Error
Any mistake
in your monthly statement as defined by the Fair Credit
Billing Act.
Borrower
The person
who receives the loan.
Budget
The total
cost of attending a postsecondary institution for one academic
year. The student's budget usually includes tuition, fees,
room, board, books, supplies, travel, and personal expenses.
Each institution develops its own student budget.
Bursar's
Office
The
university office that is responsible for the billing and
collection of university charges.
Business
Days
Check with
your institution to find out what days it counts as business
days under the Truth in Lending and Electronic Fund Transfer
Acts.
Buydowns
Mortgage in
which the rate is offset by paying more points up front.
Campus-based Aid
Financial
aid programs administered by the university. The federal
government provides the university with a fixed annual
allocation which is awarded by the financial aid administrator
to deserving students. The Perkins Loan Program, Supplemental
Education Opportunity Grant (SEOG), and Federal Work-Study are
examples of campus-based aid.
Capitalization of
Interest
Addition
of unpaid interest to the principal balance of a loan which
increases the total outstanding balance due.
Caps
The maximum
amount the mortgage rate can change annually or over the life
of the loan on a one-year adjustable. For example, if the caps
are 2% annual and 6% life of loan, a mortgage whose first-year
rate is 10% could rise to no more than 12% the second year.
CD or Certificate of
Deposit
Time
deposit, FDIC-insured to $100,000 per person, requiring that
either no withdrawals be permitted for seven days, or that a
minimum penalty of seven days' interest be charged upon
withdrawals within the first six days after deposit.
CM
Stands for
compounding method in bankrate.com tables. These include:
S—Simple interest. A—Compounded annually. H—Compounded
semi-annually. Q—Compounded quarterly. M—Compounded monthly.
D—Compounded daily.
COFI
Adjustable-rate mortgage with rate that adjusts based on a
cost-of-funds index, often the 11th District Cost of Funds.
Collateral
Property
offered to support a loan and subject to seizure if you
default.
Collections Account
When an
account cannot be collected, it is referred for collection,
i.e.; given to a bill collector. Once this happens, it will
appear on your credit history whether paid or not. Obviously,
the ramifications are more serious if the account remains
unpaid. Any collection item, whether paid or not, is
considered negative by all credit grantors.
CommonLine Network
Provides
framework for an open, standardized student loan delivery
system by using common file formats to transfer loan
information.
Consolidation
Refinancing
multiple education loans into one new loan with a new
repayment term, monthly payments, and interest rate.
Cooperative Work-Study Education
A program in
which the student alternates between full-time college study
and full-time paid employment related to the student's area of
study. Under this plan, a bachelor's degree often requires
five years to complete.
Cosigner
A person who
signs the promissory note in addition to the borrower and is
responsible for the obligation if the borrower does not pay.
Cost
of Attendance
The total
cost of attending a post-secondary institution for one
academic year. The student's budget usually includes tuition,
fees, room, board, supplies, transportation, and personal
expenses.
Court
Record
Civil
Court records include bankruptcies, judgments, liens, divorce,
satisfied judgments, and satisfied liens. All court records,
including satisfactions, will probably be considered negative
by most credit grantors.
Credit
The right
granted by a creditor to pay in the future in order to buy or
borrow in the present.
Credit
Bureau
An agency
that keeps your credit record.
Credit Card
Any card,
plate, or coupon book used from time to time or over and over
again to borrow money or buy goods or services on credit.
Credit
History
The record
of how you've borrowed and repaid debts.
Credit Scoring System
A
statistical system used to rate credit applicants according to
various characteristics relevant to creditworthiness.
Credit-ready
A
credit-ready borrower is one who has no credit history OR a
credit history with no excessive number of delinquencies on
consumer loans or revolving charge accounts; no prior
education loan defaults; no derogatory credit items such as
charge offs, foreclosures, open judgments, bankruptcy, etc.
Credit-related Insurance
Health,
life, or accident insurance designed to pay the outstanding
balance of debt.
Credit-scoring
A method,
based on statistical analysis of applicant characteristics,
through which lenders determine the applicant's qualification
for credit.
Credit-worthy
An
individual with no negative credit history per the criteria
established by the lender.
Creditor
A person or
business from whom you borrow or to whom you owe money.
Creditworthiness
A persons
past and future ability to repay debts.
Debit Card (EFT Card)
A plastic
card, looks similar to a credit card, that consumers may use
to make purchases, withdrawals, or other types of electronic
fund transfers.
Default
Failure to
make scheduled monthly payments according to the agreed-upon
terms. Default occurs at 180 days when the delinquency date is
prior to 10/7/98, and 270 days when the delinquency date is on
or after 10/7/98.
Deferment
A period
during which a borrower, who meets certain criteria, may
suspend loan payments. For some loans the federal government
pays the interest during a deferment. On others, the interest
accrues and is capitalized, and the borrower is responsible
for paying it.
Delinquency
Failure to
make monthly loan payments when due. Delinquency begins with
the first missed payment.
Dependent Student
An
undergraduate student whose parents provide more than half of
their financial support. A dependent student is not married,
is under 24 years of age, has no legal dependents, is not an
orphan or ward of the court, nor a veteran of the U.S. Armed
Forces. Parents of a dependent student must submit parental
information on the FAFSA for their son or daughter to be
considered for financial aid. (See also Independent.)
Direct
Repay
Borrowers
authorize automatic transfers of funds from checking or
savings accounts to cover monthly education loan payments.
Participants may receive a 1/4% interest rate reduction on
eligible loans.
Disbursement
The release
of loan funds to the school for delivery to the borrower.
Disbursements are usually made in equal multiple installments
co-payable to the borrower and the school.
Disclosure Statement
Statement of
the total cost and amount of a loan, including the interest
rate and any additional finance charges.
Disclosures
Information
that must be given to consumers about their financial
dealings.
DNR
In
bankrate.com tables of rates, this indicates that the
institution did not report the information requested.
Due
Diligence
If a
borrower fails to make payments on their loan according to the
terms of the promissory note, the federal government requires
the lender, holder, or servicer of the loan to make frequent
attempts to contact the borrower (via telephone and mail) to
encourage him or her to repay the loan and make arrangements
to resolve the delinquency.
Early
Decision
A program
with earlier deadlines and earlier notification dates than the
regular admissions process. Students who apply to an early
decision program commit to attending the school if admitted
(thus, early decision can be applied to only one school).
Unfortunately, this means the student has accepted the offer
of admission before they find out about the financial aid
package.
Elderly Applicant
As defined
in the Equal Credit Opportunity Act, is a person 62 or older.
Electronic
Fund Transfer (EFT) Systems
A variety of
systems and technologies for transferring funds electronically
rather than by check.
Electronic Funds
Transfer (EFT)
Any transfer
of funds that is initiated through electronic means, such as
data transmission by computer rather than a paper based
transaction, such as a check.
Eligible Non-Citizen
Someone who
is not a US citizen but is nevertheless eligible for Federal
student aid. Eligible non-citizens include US permanent
residents who are holders of valid green cards, US nationals,
holders of form I-94 who have been granted refugee or asylum
status, and certain other non-citizens. Non-citizens who hold
student visas or exchange visitor visas are not eligible for
Federal student aid.
Endowment
Funds owned
by an institution and invested to produce income to support
the operation of the institution. Many educational
institutions use a portion of their endowment income for
financial aid.
Enrollment Status
An
indication of whether you are a full-time or part-time
student. Generally you must be enrolled at least half-time
(and in some cases full-time) to qualify for financial aid.
Entitlement
Entitlement
programs award funds to all qualified applicants. The Pell
Grant is an example of such a program.
Entrance Interview
See Loan
Interviews.
Exit
Interview
See Loan
Interviews.
Expected Family
Contribution (EFC)
Amount a
family is expected to contribute to a student's education. EFC
is calculated based on family earnings, net assets, savings,
size of family and number of students in college.
ExportSS Service
Sallie
Mae's loan administration and origination service offered to
lenders.
FAA (Financial Aid
Administrator)
A college or
university employee who is involved in the administration of
financial aid. Some schools call FAAs "Financial Aid Advisors"
or "Financial Aid Counselors".
FAFSA (Free Application for Federal Student Aid)
The form
that must be completed by students and parents applying for
Federal Title IV student aid.
FDSLP
The Federal
Direct Student Loan Program. Stafford and PLUS loans are
available directly from the federal government rather than
through commercial lenders. Selected colleges and universities
participate in this program.
Federal Methodology
The need
analysis formula mandated by federal law to determine a
family's Expected Family Contribution (EFC).
Federal Processor
The
organization that processes the information submitted on the
Free Application for Federal Student Aid (FAFSA) and uses it
to compute eligibility for federal student aid.
Fellowship
A form of
aid given to graduate students to help support their
education. Some fellowships include tuition waivers or
payments to universities in lieu of tuition. Most fellowships
include a stipend to cover reasonable living expenses (e.g.,
just above the poverty line). Fellowships are a form of gift
aid and do not have to be repaid.
FFELP
The Federal
Family Education Loan Program. Stafford and PLUS loans are
financed by private lenders and guaranteed by the federal
government.
Finance Charge
The total
dollar amount credit will cost.
Financial
Aid
The total
amount of financial aid (federal and nonfederal) such as
scholarships, grants, loans, and/or work-study for which a
student is eligible.
Financial Aid
Transcript (FAT)
A record of all federal aid received by students at each school attended.
Financial
Need
The
difference between the cost of attendance at a college and the
Expected Family Contribution.
Fixed
Interest
On a fixed
interest loan, the interest rate remains the same for the life
of the loan.
Forbearance
Temporary
cessation of regularly scheduled payments or temporarily
permitting smaller payments than were originally scheduled.
General Education Development Certificate (GED)
A
certificate students receive in lieu of a diploma if they have
passed a specific approved high school equivalency test.
Gift Aid
Financial
aid, such as grants and scholarships, which does not need to
be repaid.
Grace
Period
Specified
period of time between the date a student graduates or drops
below half-time status and the date loan repayment begins.
Grade Point Average (GPA)
An average
of a student's grades, where the grades have been converted to
a 4.0 scale - with 4.0 being an A, 3.0 being a B, and 2.0
being a C.
Graduate Student
A student in a postsecondary institution who is enrolled in a master's or
higher level degree program.
Graduated Repayment
A repayment
schedule where the monthly payments are smaller at the start
of the repayment period and become larger later on.
Grants
Financial
aid awards that do not have to be repaid. Grants are available
through the federal government, state agencies and colleges.
Grant
Returns
A Sallie Mae
program that rewards highly indebted Stafford borrowers who
pay on time with a credit to their account.
Great
Rewards
Enables
eligible borrowers who pay on time to receive an interest rate
reduction for the remaining term of their loans.
Gross
Income
Income
before taxes, deductions, and allowances have been subtracted.
Guarantor or Guarantee
Agency
State
agency or private non-profit institution that insures student
loans for lenders and helps administer the FFELP.
HEAL Loans
(Health
Education Assistance Loans) Loans that are available to
graduate health professions students.
HEAL Relief
A
consolidation plan specifically for HEAL borrowers.
HEAL
Rewards
A program
from Sallie Mae that rewards HEAL Relief (HEAL consolidation
loan) borrowers who pay on time with an interest rate
reduction on their loans.
History of Late Payment
A negative
entry to your credit report lists a history of late payments.
A late payment is recording made to your merchant trade line
account when payment is received after the due-date grace
period.
Holder
The
institution that owns a loan.
Home Equity Line of
Credit
A form of
open-ended credit in which the home serves as collateral.
HPSL Loans
(Health
Professions Student Loans) are relatively low-interest loans
for graduate health professions students with exceptional
financial need.
In-School
The period
that borrowers are enrolled at least half-time.
In-School and
Grace Interest Subsidy
Interest
the federal government pays on certain loans while borrowers
are in school, during authorized deferment, or grace periods.
Income
The amount of money received from employment (salary, wages, tips),
profit from financial instruments (interest, dividends,
capital gains), or other sources (welfare, disability, child
support, Social Security, and pensions).
Income-Based Repayment
(Income
Sensitive/Income Contingent) Repayment schedule where the
amount of the monthly payments is based on the income earned
by the borrower.
Independent Student
A student
who is either married, 24 years of age or older, enrolled in a
graduate or professional education program, has legal
dependents other than a spouse, is an orphan or ward of the
court, or a veteran of the U.S. Armed Forces.
Index
A floating
index lenders use to calculate the rate on a one-year
adjustable-rate mortgage. The most common indexes are the
one-year Treasury Constant Maturity Yield and the FHLB 11th
District Cost of Funds.
Indexed
Rate
The sum of
the published index plus the margin. For example if the index
were 9% and the margin 2.75%, the indexed rate would be
11.75%. Often, lenders charge less than the indexed rate the
first year of an adjustable-rate mortgage.
Inquiry
An "inquiry"
is a listing of the name of a credit grantor, or authorized
user who has accessed your credit file. Each inquiry is posted
to the credit file so you know who has obtained a copy of it.
Credit grantors post an inquiry before offering you a
pre-approval credit card application. These are listed as
"promotional" inquiries on your credit file because only your
name and address were accessed, not your credit history
information. They are NOT sent to credit grantors or
businesses for reasons of credit reporting. They are listed
for your informational purposes only.
Institutional Methodology
When a
college or university uses its own formula to determine
financial need for allocation of the school's own financial
aid funds, the formula is referred to as the Institutional
Methodology.
Insurance
Fee
A fee
charged by guarantee agencies, which is deducted from loan
proceeds and used to insure against defaulted loans.
Int Rate or "Interest
Rate"
(Loans) The
amount charged per year on a home loan. The rate varies
according to the type of loan. This chart shows 15-year and
30-year mortgages, which are typically used to shop around for
loans from various institutions; or percentage of interest
paid.
Joint
Account
A credit
account held by two or more people so that all can use the
account and all assume legal responsibility to repay.
Jumbo
Mortgages
Mortgages
that go over the $227,150 Fannie Mae and Freddie Mac limit.
Late
Payment
A payment
made later than agreed upon in a credit contract and on which
additional charges may be imposed.
Laureate
Sallie
Mae's new solution to managing and delivering student loan
information. Laureate is designed to simplify the financial
aid process for students, schools, guarantors and lenders.
Lawloans
A private
loan for law students and law school graduates studying for
the bar exam.
Lender
A financial institution, agency or school that provides the money to make
a loan to a borrower.
Lessee
A person who
signs a lease to get temporary use of property.
Lessor
A company
that provides temporary use of property usually in return for
periodic payment.
Liability on an Account
Legal
responsibility to repay debt.
LineSS
Sallie Mae's
electronic loan information and management system for FAAs.
Loan
A type of
financial aid that is available to students and their parents.
Student loan programs have varying interest rates and
repayment provisions. An education loan must be repaid.
Loan
Interviews
Students
with educational loans are required to meet with a financial
aid administrator before they receive their first loan
disbursement and again before they graduate or otherwise leave
school. During these counseling sessions, called entrance and
exit interviews, the FAA reviews the repayment terms of the
loan and the repayment schedule with the student.
Loan-to-Value Ratio
Proportion
of a home's value upon which an institution will issue a loan.
It is calculated by dividing the loan amount by the lesser of
the sales price or appraised value of a property.
Lock
Lender's
guarantee that the mortgage rate quoted will be good for a
specific number of days.
Margin
The number
of percentage points added to the index on a one-year
adjustable. For example, if the index rate is 9% and the
margin is 3%, then the fully-indexed rate is 12%.
Master Promissory Note
The
promissory note a student signs when taking out a Stafford
Loan. The Master Promissory Note covers both the Subsidized
and Unsubsidized Stafford loans the student may receive for
the same enrollment period. If the student is attending a
4-year or graduate school, the Master Promissory Note also
covers Subsidized and Unsubsidized Stafford loans the student
may receive for future enrollment periods.
MBA Loans
Private
loans for graduate business students.
MEDLOANS
Private
loans for allopathic medical students.
Merchant Credit Line
These
include all regular credit lines, such as department store
cards, auto loans, mortgages, bank loans and credit cards. If
there is any history of late payment, or if the trade line was
included in the bankruptcy, charged off, or put into
repossession, the listing will be considered negative by most
credit grantors.
Merit-based
A means of
determining eligibility for certain types of financial aid using merit, such as a specific accomplishment or talent, as
the determining factor, rather than financial need.
Money Market Account (MMA) or Money Market Deposit
Liquid
account, providing FDIC insurance to $100,000 per person, that
restricts preauthorized transfers to six monthly, three of
which may be by check.
National Service Trust
President
Clinton's national community service program. If you
participate in this program before attending school, the funds
may be used to pay your educational expenses. If you
participate after graduating, the funds may be used to repay
your federal student loans. Eligible types of community
service include education, human services, the environment,
and public safety.
Need
The
difference between the Cost of Education and the Expected
Family Contribution (EFC) is the student's financial need —
the gap between the cost of attending the school and the
student's resources.
Need
Analysis
Technique
used to determine a student's need for financial assistance
for college expenses. The analysis determines the family's
ability to contribute to costs compared to the student's cost
of attendance.
Need-based
A means of
determining eligibility for certain types of financial aid
using financial need as the determining factor.
Negative Amortization
When, on an
adjustable-rate mortgage, interest rates increase faster than
monthly payments. Result: Your balance may grow despite
efforts to pay it down.
Net Income
This is
income after taxes, deductions, and allowances have been
subtracted.
One-year Adjustable
Mortgage
whose annual rate changes yearly. The rate is usually based on
movements of a published index plus a specified margin, chosen
by the lender.
Open
Admissions
When most
or all students that apply to a college are admitted.
Open-end
Credit
A line of
credit that may be used over and over again, including credit
cards, overdraft credit accounts, and home equity lines.
Open-end
Lease
A lease that
may involve a balloon payment based on the value of the
property when it is returned.
Origination
The process
whereby the lender, or a servicing agent on behalf of the
lender, handles the initial application processing and
disbursement of loan proceeds.
Origination Fee
Fee, payable
by the borrower and deducted from the principal of a loan
prior to disbursement to the borrower. For federally-backed
loans, the origination fee is paid to the federal government
to offset the cost of the interest subsidy to borrowers. For
private loan programs, the origination fee is generally paid
to the originator to cover the cost of administering and
insuring the program.
Overaward
The amount
of loan proceeds that, when added to other student financial
assistance, exceeds the borrower's educational need.
Overdraft Checking
A line of
credit that allows you to write checks or draw funds by means
of an EFT card for more than your actual balance, with an
interest charge on the overdraft.
Parent Loans for Undergraduate Students (PLUS)
Federally-insured loans for parents of dependent students.
Parent's Contribution (PC)
Amount
parents can be expected to contribute each year to the cost of
their student's education as determined by the Federal
Methodology.
Pell
Grant Program
The largest
federal grant program. Eligibility and award amounts are
determined by the college based on established federal
guidelines.
Period of Enrollment
The period
for which aid is made as determined by the school. A period of
enrollment coincides with an academic term such as the
academic year, semester, trimester, or quarter, and starts on
the day classes begin.
Perkins
Loans
Federally-insured loans funded by the federal government and
awarded by the school. The loans feature a low interest rate
and are repayable over an extended period.
Point-of-Sale (POS)
A method by
which consumers can pay for purchases by having their deposit
accounts debited electronically without the use of checks.
Points and Origination
Fees
Points are
finance charges paid at the beginning of a mortgage in
addition to monthly interest. One point equals one percent of
the loan amount. An origination fee covers the lender's work
in preparing your mortgage loan.
PortSS
System
Sallie
Mae's microcomputer-based loan origination software.
Postsecondary
This term
means "after high school" and refers to all programs for high
school graduates, including programs at two and four-year
colleges, and vocational & technical schools.
Prepaid Tuition Plan
A college
savings plan that is guaranteed to rise in value at the same
rate as college tuition. For example, if a family purchases
shares that are worth half a year's tuition at a state
college, they will always be worth half a year's tuition, even
10 years later when tuition rates will have doubled.
Prepayment
Paying off
all or part of a loan before it is due.
Principle Balance
Amount
borrowed, which may increase as a result of interest
capitalization, and the amount on which interest is
calculated.
Private
Loans
Private
loans provide supplemental funding when other financial aid
does not cover costs. These loans (not sponsored by government
agencies) are offered by banks or other financial institutions
and schools to parents and students.
PROFILE
(CSS/Financial
Aid PROFILETM) A customized financial aid application form
required at certain colleges, which collects additional
financial information to determine eligibility for
institutional aid.
Promissory Note
Contract
between a borrower and a lender that includes all the terms
and conditions under which the borrower promises to repay the
loan.
Proprietary School
Postsecondary schools that are private and are legally
permitted to make a profit. Most proprietary schools offer
technical and vocational courses.
PSAT/NMSQT
The
Preliminary Scholastic Assessment Test/National Merit
Scholastic Qualifying Test, which helps prepare students for
the SAT and is part of the qualifying criteria for the
National Merit Scholarship Program. A student usually takes
this test as a high school sophomore or early in the junior
year.
Pts or
"Points"
An
interest fee charged by the lender. One point is equal to one
percent of the mortgage. The use of points allows the lender
to raise its yield above the apparent interest rate.
Punitive Damages
Damages
awarded by a court above actual damages as punishment for a
violation of law.
Renewal Application
A FAFSA
application that is used for subsequent-year applications
after the initial FAFSA has been filed.
Repayment
The time
during which a borrower actively pays back an education loan.
Rescission
The
cancellation or "unwinding" of a contract.
Reserve
Officers Training Corps (ROTC)
Programs
that combine military education with baccalaureate degree
study, often with financial support and required commitment to
future service in the Armed Services. Scholarship recipients
participate in summer training while in college and meet a
service commitment after college.
SAT l
The
Scholastic Assessment Test, which is used to measure a
student's ability in math, verbal comprehension and problem
solving. SATs are administered during the junior and senior
years in high school.
SAT
ll Subject Test
Offered in
many areas of study including English, mathematics, many
sciences, history, and foreign languages. Some colleges
require students to take one or more SAT II tests when they
apply for admission.
Satisfactory Academic
Progress
An
eligibility requirement to receive federal student aid.
Satisfactory progress standards are established by each
school.
Scholarships
Funds used
to pay for higher education that do not have to be repaid.
Scholarships may be awarded based on any number of criteria,
such as academics, achievements, hobbies, talents,
affiliations with various groups, or career aspirations. They
usually do not provide funds for living expenses.
Secondary Market
Institutions, like Sallie Mae, that buy student loans from the
institutions that originate or own them.
Selective Service
Registration
for the military draft. Male students who are U.S. citizens,
have reached the age of 18, and were born after December 31,
1959, must be registered with the Selective Service to be
eligible for federal financial aid.
Self-help
Aid
Financial
aid in the form of loans or student employment.
SEOG
Supplemental Educational Opportunity Grant Program; federal
grant funds made available through some schools to a limited
number of undergraduate students with financial need.
Serialization
Combining
several loans into one account so that the borrower only pays
one monthly bill. Original loan terms do not change with
serialization.
Servicer
Organization
that administers and collects loan payments. May be either the
loan holder or an agent acting on behalf of the holder.
SMART
LOAN Account
Sallie Mae's
loan consolidation plan that allows borrowers to reduce their
initial monthly payments by as much as 40%.
Stafford
Loans
Loans, both
subsidized (need based) and unsubsidized (non-need based),
guaranteed by the federal government and available to students
to fund education.
Statement of
Educational Purpose
A legal
document in which the student agrees to use the financial aid
for educational expenses only.
Student Aid Report (SAR)
A federal
output document sent to a student by the application
processor. The SAR contains financial and other information
reported by the student on the FAFSA. The student's
eligibility for aid is indicated by the Expected Family
Contribution (EFC, which is printed on the front of the SAR.
Subsidized Stafford Loans
Need based
loans.
Supplemental Loan for
Students
Federal
loans for financially independent students. This program was
eliminated in 1994 with the creation of the Unsubsidized
Stafford Loan program.
Transcript
A list of
all the courses that a student has taken at a particular high
school or college with the grades that the student earned in
each course. Transcripts are usually required for college
applications.
TransportSS
Sallie Mae
product whereby lenders take responsibility for loan
origination, then transfer the loan to Sallie Mae for
servicing and eventual purchase.
Tuition
The amount
of money colleges charge for classroom and other instruction,
and use of some facilities such as libraries.
Undergraduate Student
A
degree-seeking student at a college or university who has not
earned a first bachelor's degree.
Unsubsidized Stafford
Loans
Non-need
based loans.
US
Department of Education (ED, DOE, USED, DE)
Government
agency that administers several federal student financial aid
programs, including the Federal Pell Grant, the Federal
Work-Study Program, the Federal Perkins Loan, the FFELP, and
the FDSLP.
US
Department of Health and Human Services (DHHS)
Government
agency that administers several federal health education loan
programs, including the HEAL, HPSL, and NSL loan programs.
Variable Interest
With a
variable interest loan, the interest rate changes
periodically. For example, the interest rate might be pegged
to the cost of US Treasury Bills (e.g., T-Bill rate plus 3.1%)
and be updated monthly, quarterly, semi-annually, or annually.
Verification Worksheet
A form
sent by the college to students who are selected for
verification by the Department of Education's Central
Processing System.
Veteran
For
Federal financial aid purposes, such as determining dependency
status, a veteran is a former member of the US Armed Forces
who served on active duty and was discharged other than
dishonorably.
Work Study
A program,
awarded by the college, through which students work part-time
to help fund their education.