The portion of the year during which classes are in session. In general, the academic year runs from the beginning of September in one year to the end of May in the following year.

The date that interest begins to accumulate on a student loan.

It is an acronym for American College Test. It is one of two standardized college entrance examinations; the other is the SAT. For students to be accepted at most universities or colleges, they must take either the SAT or ACT.

By U.S. Department of Education calculation methods, the amount of income left over after taxes and basic living expenses have been deducted.

This is when a school admits a student who barely meets the admission requirements, but denies the student any financial aid. Very few schools use admit-deny because lack of financial aid has been shown to be detrimental to marginal students.

Americoprs is a direct service organization run by the U.S. federal government. Member of Americorps work in after-school tutoring, home-building, and cleaning parks and streams. After completing a term of service member receive an education award of $4,725 that they can use toward paying for college or paying off student loans. In addition, if over 11 months of time 1700 hours of service has been completed, members receive a small monthly living allowance and health benefits.

The repayment of a loan, including principal and interest, over a predetermined period of time.

A written, formal request to review financial aid eligibility and adjust the amount awarded if appropriate.

Any item of value that you or your family owns, such as property, bank accounts, retirement funds, etc.

This is a portion of parents’ assets that are not added into the Federal Methodology need analysis calculation of the parent contribution. The asset protection allowance becomes greater as the parents age.

How much you can spend before reaching your credit limit.

The official notification from the financial aid office which describes all financial aid that a student is being offered.

This degree is also referred to as a baccalaureate degree. The degree is awarded upon successfully completing an undergraduate program at a four-year college or university.

In a financial account, it is the amount of money in the account; it can be a positive or a negative amount. However, it can also refer to the amount outstanding in an account such as a credit card balance. At colleges, the balance is the amount owed. If the number is negative, the student has a credit.

A large payment that is made to pay off the balance of a loan without penalties. Most student loans allow balloon payments.

This is the tax year before the year in which financial aid is awarded. For example, incoming freshmen just out of high school, their base year is January 1st of their junior year to December 31 of their senior year. The base year’s financial information determines whether a student qualifies to receive financial aid.

Better Business Bureaus are a network of nonprofit organizations dedicated to serving both businesses and consumers. They encourage businesses to use ethical business practices and provide consumers with a means of reporting businesses who are not ethical.

A person who applies for and receives a loan.

The school office which is responsible for billing students and receiving payments.

The federal government allocates a fixed amount of money for financial aid to universities throughout the country. Each university’s financial aid administrative staff then determines which deserving students receive aid and how much. Not all eligible students can obtain money from this source.

Certain federal student loan programs contain provisions which allow the loan to be canceled under special circumstances; for example, student-borrowers who become teachers in areas of the country which are experiencing a teacher shortage may be eligible for cancellation of part or all of their federal student loans.

This occurs when an asset, such as real estate, stocks, bonds, or mutual funds, gains value between the period when the asset is bought and when the assets sold.

A procedure by which unpaid interest is added to the principal of a loan. Interest then accrues on the new balance, which increases the monthly repayment amount as well as the total cost of the loan.

This is an acronym for Certificate of Deposit, which is similar to a savings account. The difference is that CDs have a fixed term the money has to stay with the bank or credit union before it can be withdrawn. Usually banks award CDs with a higher interest rate in exchange for keeping the money for the fixed term.

A chamber of commerce is an organization of local businesses that represent the interests of the business community. This organization’s goal is to create a strong local economy, to promote the community, and provide a strong network of businesses who can be an advocate for the business community.

Assets used to secure a loan; in the event that the borrower enters into default on the loan, the assets may be seized to settle the debt.

A company hired to collect the funds from defaulted loans.

A college savings plan is sponsored by individual states, and so the plans vary. The plan is designed so families can put aside money in an account, and the interest earned is tax-deferred. The can pay for tuition , book, and room and board.

College work study is a part-time job on campus. The funding for the program comes from federal financial aid funds.

A student who resides at home and travels to classes on a daily basis.

Interest charged on unpaid (capitalized) interest plus the principal loan balance.

The combination of several smaller loans into one large loan from a single lender.

A responsible adult who promises to assume responsibility for paying a loan if the principal borrower defaults.

The yearly cost of attending school, including tuition, textbooks and other materials, room and board, student fees, and other miscellaneous expenses.

Credit is money loaned under an agreement that the money will be repaid.

An account is set up at a business or school which allows customers or students to acquire goods and services before paying for them. In other words, it is a charge account.

An organization that collects financially pertinent information on individuals and sells that information to lenders so they can make decisions whether to grant loans.

Three main credit bureaus summarize a person’s financial records. This includes accounts connected with debt, such as loans and credit card accounts. It lists late payments, non-payments, defaults, and on-time payments. It includes both current and previous financial accounts.

This is the maximum amount of money that a lender will allow to a borrower, or the maximum amount a credit card holder can borrow on a single credit card.

Credit bureaus determine this rating of a borrower’s ability to pay back a debt. The most common credit score is based on FICO formulas and range from 350 to 850; the higher the score the better the credit rating.

An amount of money, services, or goods, that an individual or business borrows from another person, bank, or lending organization. The borrower or debtor owes the creditor and took the money, services, or goods with the intent of repayment.

Failure to make payments on a loan.

A period of time during which a borrower is permitted to delay payments on a loan; if a student returns to school during the repayment period, he or she may apply for deferment on outstanding student loans.

Failure to make payments on time.

This is the federal government organization that oversees financial assistance to students attending post secondary institutions. They administer Federal Pell Grants, Federal Perkins loans, Federal Supplemental Educational Opportunity Grants, Federal work Study, Federal Family Education Loan Programs, and William D. Ford Federal Direct Loan Programs.

A person who receives more than 50% their financial support from you. A spouse is not considered a dependent for the purpose of calculating loan eligibility.

A student who recieves over 50% of their financial support from a parent. Parental income and asset information of the dependent student is included in the FAFSA Expected Family Contribution, which determines eligibility for financial assistance.

A loan in which the college or university acts as the lender and manages the funds, while the federal government is the provider of the funds.

The release of funds from the federal government to the school in order to deliver them to the student/borrower.

The release from an obligation to pay a loan; cancellation.

Lenders must provide a disclosure statement to borrowers. This statement lists the interest rate and all fees or financial charges associated with obtaining the loan.

Participating schools receive Student Aid Reports from the federal processor electronically. Schools with EDE allow their students to electronically file their Free Application For Federal Student Aid (FAFSA).

The determination of a student's qualification to receive a certain type of financial aid.

Endorse is a means of transferring ownership of an asset to another party. For example, signing the back of a check is to endorse.

Most major universities own invested funds which produce income. Many of these universities use some of that income to provide financial aid to students.

The number of college credit hours a student takes determines full-time or part-time status. Full-time status is usually 12 credit hours. Most financial aid requires students to maintain full-time status, but in some cases half-time status is acceptable.

An information session required of first-time borrowers to advise them about their rights and responsibilities in receiving loans from a federal program.

Equifax is one of here nationwide consumer credit reporting agencies. It provides personal credit information to lenders.

An information session required of borrowers who are graduating or withdrawing from school, in which they are advised of their options concerning repayment and deferment.

Commonly referred to as the EFC; the assessment by the U.S. Dept. of Education of the amount a family can be reasonably expected to contribute toward their student's education.

Experian is one of three nationwide consumer credit reporting agencies. It provides personal credit information to lenders.

This is a form that the U.S. government requires individuals who are earning income to file with the Internal Revenue Service. It declares how much money was earned and lists the allowed tax deductions. It identifies individual’s tax responsibility.

The formula used to calculate the EFC, the amount of money a family is expected to provide toward a student's education.

A program which provides part-time employment on campus to students to help pay for education costs; federal funds are used to pay a portion of their salary.

Financial aid awarded to graduate students to pay for education. It usually covers tuition and includes a stipend to cover minimal living expenses. A fellowship does not need to be repaid.

Federal Direct Student Loans are funds provided directly to schools by the federal government in order to provide financial aid. Direct Student Loans include Stafford Loans and PLUS (Parent Loan for Undergraduate Students).

The Family Education Loan Program, which is similar to the Direct Student Loan program. This program includes Stafford, PLUS, and Perkins loans.

These are funds awarded to a post secondary student to help pay for educational expenses. Examples of financial aid are scholarships, grants, loans, and work study.

The university or college office that oversees financial aid. This office determines students’ eligibility for obtaining financial aid.

All financial aid awarded to a student, including federal and state grants and loans, scholarships, and work-study.

The difference between a student's financial resources and the cost of education.

An under-graduate freshman student who is free and clear of any unpaid loan balances when he or she signs the promissory note for an educational loan. First-Time borrowers may have to wait for 30 days after the first day of classes begin to receive their funds. This allows first-time borrowers who withdraw from classes within those 30 days to cancel their loans and then repayment is not necessary.

A loan in which the interest rate does not change over the repayment period.

A period of time during which a borrower is permitted to suspend repayment on the principal of a loan due to economic hardship. Unlike deferment, the borrower must continue to pay the interest during this time.

The application form which all students must file in order to qualify for any need-based assistance.

This is when a lender is able to withhold part of a defaulted borrower’s wages to repay a loan. Garnishment is accomplished without the borrower’s consent.

A brief amount of time following graduation during which a student is not required to begin making payments on student loans.

A repayment schedule that allows smaller monthly payments at the beginning of the repayment period and then over a certain period the monthly payments grow larger.

Need-based funds given to a student which are not repaid.

The total amount of income before taxes, allowances, or deductions are taken out.

This is a state agency that approves student loans and then guarantees or insures the loans against student defaults. The agency also makes sure that federal and state rules concerning the student loan process are followed.

An agency which approves student loans and insures them in case of default.

This is when a student enrolls for only half of the credits of full enrollment. Six credit hours is the normal half-time enrollment number. Most financial aid mandates students be enrolled at least half-time to receive financial aid, but some aid requires full time statues to be eligible.

A student who is 24 as of January 1 of the academic year is considered independent. Other determinations of independent status include being married, having a dependent other than a spouse, being a veteran of the U.S. Armed Forces, or being an orphan.

Some universities or colleges when apportioning their own funds use their own formulas to ascertain students’ financial aid needs. These individual formulas are called Institutional Methodology.

The amount charged for the privilege of borrowing money, usually a percentage of the principal amount of the loan.

A part-time job in a student's field of interest in which they receive practical training.

Investment is using assets to earn profit or income. It is tied to the future. Instead of using the assets today, the assets are redirected for future benefits.

This is an acronym for individual retirement account. Contributions to an IRA can be tax deductible according to IRS guidelines. The earnings in the IRA are tax-deferred until withdrawal.

Whoever funds a loan is referred to as the issuer.

Any financial institution which provides loans.

Colleges and universities offer high achieving students extra financial aid to entice them to enroll at their particular institutions. The practice of figuring out how much to offer and how to customize each offer to attract these desirable students is called leveraging. Leveraging enriches the caliber of students enrolling, and it is considered controversial.

This is an acronym for London Interbank Offered Rate. This is a short term variable interest rate which usually reflects what rates financial institutions charge each other for short-term loans.

This is a pre-approved loan that allows the borrower access to a pre-set amount of credit by just writing a check. A line of credit doesn’t cost anything until a check is written. After that, the repayment is like any other loan.

Funds given to a borrower on the condition that they will be repaid with interest.

It is required that students who receive educational loans meet with a financial aid administrator at least twice. Once before they receive their first loan payout, and second before they graduate or leave school. During these counseling sessions, the terms of the loan are discussed, and then the repayment schedule is reviewed.

It is a post-Bachelor’s Degree that provides a greater mastery of a specific area of study. Typically, a Master’s degree takes one to two years after a Bachelor’s Degree.

When financial aid is determined by academic, artistic or athletic abilities or other special talents, it is merit-based. These awards are not based on financial need.

Mutual funds are when an investment company or manager pools money together from various investors and then uses it to buy diversified investments, depending on the mutual funds’ goals.

This financial aid is awarded when a student cannot afford post secondary education because of straitened financial circumstances.

The amount of income after subtracting taxes, allowances, and deductions.

This is the process of generating a loan, such as the preparation, submitting, and evaluation. It includes verification of employment, credit check, and a property appraisal.

The amount charged for processing a loan.

Students who receive federal support can not accept financial awards of more than $400 over their set financial need amount.

The estimated amount that the government assumes your parent or parents can afford to contribute to your education.

This is the amount necessary to full pay off a loan. It includes the outstanding principal and accrued interest, which has not been paid. Any unpaid late fees and collection charges are added also to this amount.

A federal need-based grant toward educational costs.

A low-interest federal loan offered to students who demonstrate exceptional need.

A loan to parents of undergrad students to finance the cost of attending college.

Post-secondary education refers to any education that is beyond the high school level. This education is obtained at universities, vocational and technical colleges, and community colleges, where certificates, and degrees, such as associate’s, bachelor’s, master’s, and doctorates can be earned.

This is a college savings plan where parents purchase shares worth the cost of college tuition at the present time. The shares are guaranteed to always be worth college tuition. The tuition savings rise in value at the same rate as college tuition.

Repaying part or all of a loan before it comes due.

PRIME is an acronym for Prescribed Right to Income and Maximum Equity. The rate is referring to the interest rate banks charge each other to borrow money.

The amount of funds received from a loan which must be repaid.

Loans obtained from private (non-government) lenders to finance a student's education.

If a student in a need-based federal aid program has extenuating events occur, then the educational institution’s financial aid administrator can adjust the Expected Family Contribution (EFC) and Cost of Attendance (COA) or change his or her dependency status. For example, if a parent loses employment, or becomes disabled or deceased, these are valid reasons for adjustments, but documentation is needed. When the financial aid administrator uses this delegation of authority to make these adjustments it is called Professional Judgment.

The legally binding document which states the amount borrowed and the repayment terms, including interest.

This is another term for the 529 college savings plan. Individuals can contribute tax-deductible money to an account and the interest can be tax-free if used towards educational expenses.

A disclosure of the repayment terms of a loan, including the monthly payment amount, interest rate, and total amount to be paid.

It is one of the standardized U.S. college entrance examinations. Students planning on attending a college or university are required to take the SAT or ACT to gain admission into the school.

These tests focus on individual subjects, such as biology, chemistry, physics, history, math, economics, or a foreign language. The format is a 20 question multiple choice test. If students score high enough, they can bypass freshman entry-level courses.

Gift aid given based on athletic, artistic, or academic ability, as well as many other criteria. Scholarships are not repaid, and they can come from many different sources.

This is a type of credit card that is attached to a savings account. A consumer deposits a set amount into the account and that is how much credit the consumer can use. Secured credit cards protect credit card companies against default and allow a consumer with poor credit to have a card.

Registration for military duty (the draft), which is required of male citizens of the U.S. between the ages of 18-25.

This is when payment is made for a transaction or a trade.

Interest that is calculated on the principal of a loan only, and not on any accumulated interest.

Every legal U.S. resident is assigned a unique number by the government. This nine-digit number is used to track U.S. residents for tax purposes; it is necessary to have a SSN to be employed.

Student loans funded by the federal government, available in two forms: subsidized, which is need-based and on which the government pays the interest while the student is enrolled in school; and unsubsidized, which is not need-based and on which the government does not pay interest.

They are an equity that represents ownership in a corporation or company, and the proportioned claim to the corporation’s profits and assets.

The report generated after the analysis of your FAFSA, which is then provided to your school. Your financial aid award will be calculated based on the information in your SAR.

This amount, part of the EFC, is what the government believes the student should be able to contribute toward his or her cost of attending school.

This in when a third party (not the student, his or parents, or the school) pay for a student’s post-secondary education. They are more common in Europe; wealthy benefactors sponsor (pay for) students from their local communities to attend college.

Any of the need-based loans on which the interest is paid by the federal government while the student is enrolled in school, as well as during the grace period after graduation and any deferment.

These are generally a way to use the tax code to stimulate investment without a local, state, or federal government actually taking it out of their budgets as an expenditure. Such incentives usually are tax exemptions or reductions.

It is the number of years or months that a borrower and creditor agree on that the borrower has to repay a loan.

Transunion is one of the three nationwide credit reporting agencies. It provides consumers’ personal credit information to lenders.

A non need-based loan on which the federal government does not pay any interest.

Unlike a fixed interest loan, the interest rate is periodically changed on a variable interest loan.

The process of confirming whether the information contained on a financial aid application is accurate.

This is the form all employers are required by the IRS to issue to all employees by February 28 of each year. It lists an employee’s wages and the amount of taxes withheld.