Adjusted Gross Income (AGI)
Your or your family’s wages, salaries, interest, dividends, etc., minus certain deductions from income as reported on a federal income tax return.
Administrative Wage Garnishment (AWG)
A tool that allows the federal government or your guaranty agency to have your employer withhold a portion of your earnings to collect unpaid non-tax debts that you owe to the federal government. If you have a federal student loan in default, up to 15% of your disposable pay could be taken by the federal government or your guaranty agency to repay your debt.
Award Letter
An offer from a college or career school that states the type and amount of financial aid the school is willing to provide if you accept admission and register to take classes at that school.
Award Year
The school year for which financial aid is used to fund your education.
Cancellation
The release of the borrower’s obligation to repay all or a designated portion of principal and interest on a student loan. Also called discharge or forgiveness of a loan.
Cost of Attendance (COA)
The total amount it will cost you to go to school—usually stated as a yearly figure. COA includes tuition and fees; room and board (or a housing and food allowance); and allowances for books, supplies, transportation, loan fees, and dependent care. It also includes miscellaneous and personal expenses, including an allowance for the rental or purchase of a personal computer; costs related to a disability; and reasonable costs for eligible study-abroad programs. For students attending less than half-time, the COA includes tuition and fees and an allowance for books, supplies, transportation, and dependent care expenses, and can also include room and board for up to three semesters or the equivalent at the institution. But no more than two of those semesters, or the equivalent, may be consecutive. Contact the financial aid administrator at the school you’re planning to attend if you have any unusual expenses that might affect your COA.
Default
Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. You may experience serious legal consequences if you default.
Default Rate
The percentage of borrowers who fail to repay their loans according to the terms of their promissory notes.
Deferment
A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s).
Delinquent
A loan is delinquent when loan payments are not received by the due dates. A loan remains delinquent until the borrower makes up the missed payment(s) through payment, deferment, or forbearance. If the borrower is unable to make payments, he or she should contact his or her loan servicer to discuss options to keep the loan in good standing.
Dependency Status
The determination of a Free Application for Federal Student Aid (FAFSA) applicant as dependent or independent.
Dependent Student
A student who does not meet any of the criteria for an independent student. An independent student is one of the following: at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, someone with legal dependents other than a spouse, an emancipated minor or someone who is homeless or at risk of becoming homeless.
Direct Loan
A federal student loan, made through the William D. Ford Federal Direct Loan Program, for which eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans and Direct Consolidation Loans are types of Direct Loans.
Direct PLUS Loan
A loan made by the U.S. Department of Education to graduate or professional students and parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status.
Disbursement (disburse or disbursed)
Payment of the loan funds to the borrower by the school. Students generally receive their federal student loan in two or more disbursements.
Eligible Noncitizen
A U.S. national (includes natives of American Samoa or Swains Island), U.S. permanent resident (who has an I-151, I-551 or I-551C [Permanent Resident Card]), or an individual who has an Arrival-Departure Record (I-94) from U.S. Citizenship and Immigration Services (USCIS) showing one of the following designations:
- “Refugee”
- “Asylum Granted”
- “Cuban-Haitian Entrant (Status Pending)”
- “Conditional Entrant” (valid only if issued before April 1, 1980)
- Victims of human trafficking, T-visa (T-2, T-3, or T-4, etc.) holder
- “Parolee” (You must be paroled into the United States for at least one year and you must be able to provide evidence from the USCIS that you are in the United States for other than a temporary purpose and that you intend to become a U.S. citizen or permanent resident.)
If you meet the noncitizen criteria above, you are eligible to receive federal student aid. If you are unsure of your eligibility, please check with your school’s financial aid office for more information.
Eligible Program
A program of organized instruction or study of a certain length that leads to an academic, professional, or vocational degree or certificate, or other recognized education credential.
Emancipated Minor
An individual (under the age of 18) who has legally been determined to be an adult by a court in his or her state of legal residence.
Entrance Counseling
A mandatory information session which takes place before you receive your first federal student loan that explains your responsibilities and rights as a student borrower.
Exit Counseling
A mandatory information session which takes place when you graduate or attend school less than half-time that explains your loan repayment responsibilities and when repayment begins.
Expected Family Contribution (EFC)
This is the number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provide in your FAFSA, the application for federal student aid. Your EFC is reported to you on your Student Aid Report (SAR).
Federal Family Education Loan (FFEL) Program
Under this program, private lenders provided loans to students that were guaranteed by the federal government. These loans included Subsidized Federal Stafford Loans, Unsubsidized Federal Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans. Federal student loans under the FFEL Program are no longer made by private lenders. Instead, all new federal student loans come directly from the U.S. Department of Education under the Direct Loan Program.
Federal Pell Grant
A federal grant for undergraduate students with financial need.
Federal School Code
An identifier that the U.S. Department of Education assigns to each college or career school that participates in the federal student aid programs. In order to send your FAFSA information to a school, you must list the school’s Federal School Code on your application. A list of Federal School Codes is available at www.fafsa.gov.
Federal Student Aid
Financial aid from the federal government to help you pay for education expenses at an eligible college or career school. Grants, loans and work-study are types of federal student aid. You must complete the FAFSA to apply for this aid.
Federal Student Aid PIN
Your electronic personal identification number that serves as your identifier to allow access to personal information in various U.S. Department of Education systems and acts as your digital signature on some online forms. If you do not already have a PIN, you can request one online at www.pin.ed.gov.
Federal Student Aid Programs
The programs authorized under Title IV of the Higher Education Act of 1965 that provide grants, loans and work-study funds from the federal government to eligible students enrolled in college or career school.
Federal Student Loan
A loan funded by the federal government to help pay for your education. A federal student loan is borrowed money you must repay with interest.
Financial Aid Package
The total amount of financial aid (federal and nonfederal) a student is offered by a college or career school. The school’s financial aid staff combines various forms of aid into a “package” to help meet a student’s education costs.
Financial Need
The difference between the cost of attendance (COA) at a school and your Expected Family Contribution (EFC). While COA varies from school to school, your EFC does not change based on the school you attend.
Forbearance
A period during which your monthly loan payments are temporarily suspended or reduced. Your lender may grant you a forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. During forbearance, principal payments are postponed but interest continues to accrue. Unpaid interest that accrues during the forbearance will be added to the principal balance (capitalized) of your loan(s), increasing the total amount you owe.
Grace Period
A period of time after borrowers graduate, leave school, or drop below half-time enrollment where they are not required to make payments on certain federal student loans. Some federal student loans will accrue interest during the grace period, and if the interest is unpaid, it will be added to the principal balance of the loan when the repayment period begins.
Grant
Financial aid, often based on financial need, that does not need to be repaid (unless, for example, you withdraw from school and owe a refund).
Independent Student
An independent student is one of the following: at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse, an emancipated minor or someone who is homeless or at risk of becoming homeless. Get additional information to determine your dependency status.
Loan Servicer
A company 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 lender. If you’re unsure of who your federal student loan servicer is, you can look it up on www.nslds.ed.gov.
Master Promissory Note
A binding legal document that you must sign when you get a federal student loan. The MPN can be used to make one or more loans for one or more academic years (up to 10 years). It lists the terms and conditions under which you agree to repay the loan and explains your rights and responsibilities as a borrower. It’s important to read and save your MPN because you’ll need to refer to it later when you begin repaying your loan or at other times when you need information about provisions of the loan, such as deferments or forbearances.
National Student Loan Data System (NSLDS)
A centralized database, available at www.nslds.ed.gov, which stores information on federal grants and loans. NSLDS contains information on how much aid you’ve received, your enrollment status, and your loan servicer(s). You can access NSLDS using your Federal Student Aid PIN.
Need-based
Based on a student’s financial need. Example: A need-based grant might be awarded based on a student’s low income.
PLUS Loan
A loan available to graduate students and parents of dependent undergraduate students for which the borrower is fully responsible for paying the interest regardless of the loan status.
Satisfactory Academic Progress
A school’s standards for satisfactory academic progress toward a degree or certificate offered by that institution. Check with your school to find out its standards.
Scheduled Award
The maximum grant amount you are eligible to receive for the award year if you are enrolled full-time for the full school year. This amount is calculated from the information you (and your family) provided when you filed your FAFSA.
Student Aid Report (SAR)
A summary of the information you submitted on your Free Application for Federal Student Aid (FAFSA). You receive this report (often called the SAR) via e-mail a few days after your FAFSA has been processed or by mail within 7-10 days if you did not provide an e-mail address. If there are no corrections or additional information you must provide, the SAR will contain your EFC, which is the number that’s used to determine your eligibility for federal student aid.
Subsidized Loan
A loan based on financial need for which the federal government pays the interest that accrues while the borrower is in an in-school, grace, or deferment status. For Direct Subsidized Loans first disbursed between July 1, 2012, and July 1, 2014, the borrower will be responsible for paying any interest that accrues during the grace period. If the interest is not paid during the grace period, the interest will be added to the loan’s principal balance.
Unsubsidized Loan
A loan for which the borrower is fully responsible for paying the interest regardless of the loan status. Interest on unsubsidized loans accrues from the date of disbursement and continues throughout the life of the loan.
Verification
The process your school uses to confirm that the data reported on your FAFSA is accurate. Your school has the authority to contact you for documentation that supports income and other information that you reported.
William D. Ford Federal Direct Loan Program
The federal program that provides loans to eligible student and parent borrowers under Title IV of the Higher Education Act. Funds are provided by the federal government to eligible borrowers through participating schools.
Work-Study
A federal student aid program that provides part-time employment while you are enrolled in school to help pay your education expenses.