Terms you should know

Last week I shared a glossary of financial aid terms (A-F) that families in the midst of applications and those approaching it should know. This week I’ll finish off the alphabet with definitions provided by a great website: www.studentaid.org. I know this exhaustive list looks overwhelming; my suggestion is to skim the list and see which terms are relevant for your family. If you are the parent of a senior, now is the best time to search for scholarships. Many will have deadlines in January, February and March.

he Graduated Repayment Plan starts with lower payments that increase every two years. Under this plan, you make payments for up to 10 years (between 10 and 30 years for consolidation loans).

A school’s graduation rate is the percentage of a school’s full-time, first-time degree- or certificate-seeking students who complete their degree or certificate within 150 percent of the published length of the program in which they are enrolled.

A grant is a monetary gift for people pursuing higher education. It is often based on financial need and does not need to be repaid (unless, for example, you withdraw from school and owe a refund).

Gross income is your total income before deductions.

A guaranty agency is a state or private non-profit agency that helps administer the Federal Family Education Loan (FFEL) Program. A guaranty agency insures federal loans by repaying the loan holder when a loan defaults, and then collects the defaulted loan from the borrower.

Half-time enrollment is an enrollment status applied to students who are only enrolled in half of the expected full-time course load. Half-time enrollment can affect the cost of attendance (COA), and each school may have different half-time enrollment specifications.

For tax purposes, you might claim head of household if you are unmarried and responsible for more than half of the cost of keeping up your and your dependent’s home. Whether you are head of household can affect how you report tax return information on the FAFSA® form.

A homeless individual is someone without a home who generally lives in shelters, parks, motels, hotels, cars, or with someone else due to not having anywhere else to go. Homeless individuals can still receive federal student aid.

ligible loans: Direct loans and FFEL Program loans other than those in default, PLUS loans made to a parent borrower, or Consolidation Loans that repaid a Direct or Federal PLUS Loan made to a parent borrower. Consolidating a Federal Perkins Loan may make you eligible.

Eligible loans: Direct loans other than those in default and parent PLUS loans. Consolidating a Federal Perkins Loan, FFEL Program loan or Direct PLUS Loan made to a parent may make you eligible.

An independent student is at least 24 years old, married, a graduate/ professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, someone with legal dependents (not a spouse), an emancipated minor, or someone who is or at risk of being homeless.

Interest is a loan expense charged for the use of borrowed money. Interest is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan.

You may be eligible for the Iraq and Afghanistan Service Grant (IASG) if your parent or guardian died as a result of military service performed in Iraq or Afghanistan after the events of 9/11, and you are not eligible for a Federal Pell Grant.

A school’s job placement rate is the percentage of graduating students who obtained employment either in the recognized occupation for which they were trained or in a related, comparable, recognized occupation within a determined period after receiving their degree/certificate.

judgment lien gives a creditor the legal right to keep property when the owner fails to pay a debt. It can only be granted by a court. A student (or parent in the case of a parent borrower) with a judgment lien will not qualify for federal student aid.

Legal guardianship is a designation by a court that authorizes someone to care for an individual in place or absence of parents. Having a legal guardian qualifies you as an independent student, such that you do not have to report your parents’ income on the FAFSA® form.

A lender is the organization that made the loan (borrower’s school, bank, credit union, etc.).

itigation is the act or process of bringing or contesting a legal action in court.

A loan is money borrowed from the federal government or a private source like a bank or financial institution, and must be paid back with interest.

Loan discharge is the removal of a borrower’s obligation to repay a loan under certain circumstances including but not limited to death, disability, bankruptcy, fraud, and identity theft.
Student loan forgiveness is offered to encourage certain types of employment. A loan may be fully or partially forgiven after a certain number of years of qualifying employment.

An MPN is a legal document that contains the Borrower’s Rights and Responsibilities and Terms and Conditions for repayment. Direct PLUS and Direct Subsidized / Unsubsidized loans have different MPNs.

Merit-based means that something is based on a student’s skill or ability. For example, a merit-based scholarship might be awarded based on a student’s high grades.

An offset is when a payment from the U.S. Department of Treasury (such as an income tax refund) is reduced or stopped to pay off a delinquent debt. The remainder of a refund will be processed; an offset shouldn’t delay it unless the entire refund is applied to the debt.

The Ombudsman Group is dedicated to helping resolve disputes related to the federal student aid programs, including Direct Loans, Federal Family Education Loan (FFEL) Program loans, Perkins Loans, and grant programs.
button id=”fsa_Button_fsa_Link_OutofStateStudent” class=”btn linkText fsa-btn-link-alt text-left mb-0 pb-0″ type=”button” aria-label=””>Out-of-State Student
An out-of-state student is a student who is attending a college or career school outside of his or her state of legal residence.

Partial financial hardship is an eligibility requirement under the Income-Based Repayment and Pay As You Earn repayment plans. For more information, go to Repayment Plans.

The Pay As You Earn Plan is a repayment plan with monthly payments that are generally equal to 10% of your discretionary income, but never more than the 10-year Standard Repayment amount.

Payroll deductions are amounts of money withheld from your paycheck by your employer.

PLUS credit counseling helps graduate/professional students and parents of eligible dependent undergraduate students understand the obligations associated with borrowing a PLUS loan and assists them in making careful decisions about taking on student loan debt.

A postbaccalaureate teacher certification program is a program that enables those who hold at least a bachelor’s degree to earn teacher certification at the elementary or secondary level. Program specifics can depend on the school and state where the program is available.

prepaid tuition plan, also known as a section 529 plan, lets you lock in future tuition rates at in-state public colleges at current prices and is usually guaranteed by the state in which the plan was established.

Principal refers to the sum of money lent, on which interest is paid.

A proprietary school is a private, for-profit school that provides education and training.

This tool will help you understand the following about the Public Service Loan Forgiveness (PSLF) Program: what is required to participate, if an employer qualifies, which loans qualify, and other actions to take to receive PSLF.

The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 (10 years) qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer.
A regular student is one who is enrolled or accepted for enrollment at an institution for the purpose of obtaining a degree, certificate, or other recognized education credential. To be eligible for federal student aid, you must generally be a regular student.

Loan rehabilitation is one method of getting your student loan out of default. To begin the rehabilitation process, you must contact your loan holder. If you’re not sure who your loan holder is, log in to your account to get your loan holder’s contact information.

Repayment is paying back money you borrowed by making scheduled payments to a loan holder or servicer.

A school’s retention rate is the percentage of its first-time students who are seeking bachelor’s degrees who return to the institution to continue their studies the following fall.

The REPAYE Plan is a repayment plan with monthly payments that are generally equal to 10% of your discretionary income.

Room and board is generally the cost of housing and food while attending college or career school.

atisfactory academic progress is the process a school uses to determine if a student is meeting all of his or her educational requirements and is on target to graduate on time with a degree or certificate. This process may vary across schools.

Scholarships are gifts that don’t have to be repaid and are designed to help students pay for an undergraduate degree. They can be a one-time gift or are renewable, depending on the scholarship.

school closure is an institution that no longer provides educational services to students.

Service Obligation signing is an agreement to teach full-time, in a high-need field, at an elementary/secondary school/educational service agency for low-income students, and for at min 4/8 academic years following their ending of the grant assisted study.

The Standard Repayment Plan is the basic repayment plan for the William D. Ford Federal Direct Loan (Direct Loan) and Federal Family Education Loan (FFEL) Programs. Payments are fixed and made for up to 10 years (10–30 years for Consolidation Loans).

A standardized test is a test that is designed to assess individuals against a common standard. For example, the SAT and ACT are standardized tests that some colleges require for consideration for admission.

States offer financial assistance to eligible residents to help reduce educational costs. Some state aid is first come, first served, so complete your FAFSA® form early. We don’t administer state aid programs. Contact your state grant agency for more information.

Student Fraud is any situation where an individual falsifies information in order to qualify for student aid. Examples of student fraud include using false information on the FAFSA, such as income or marital status, or reporting an invalid high school diploma.

Student loan debt burden is the percentage of a borrower’s monthly income that is dedicated to his or her student loan payments. The smaller this percentage, the lower the debt burden.

The TEACH Grant funds students who are completing/plan to complete coursework that is required to be a teacher, and who agree to teach full-time in a high-need field at an educational service agency or school for low-income students for at least four years.

The TEACH Grant Initial and Subsequent Counseling process acquaints the student to the TEACH Grant program and the TEACH Grant service obligation.

A teach-out plan is a written agreement among schools that provides for the equitable treatment of students and a reasonable opportunity for students to complete their program of study if a school ceases to operate before they have completed their program of study.

A teacher is a person who provides professional direct instruction to students.

A total and permanent disability discharge relieves you from having to repay your federal student loan(s) and/or complete your Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation. Learn more about TPD discharge .

A school’s transfer rate is the percentage of its full-time, first-time students who have transferred to another institution.

A transfer student is a student who has completed some academic credits at a college or university and has requested to enroll at a different institution.

Tuition is the amount of money you owe for receiving instruction, materials, and/or supplies, or for the rental or purchase of equipment, for a course of study at your institution.

An undergraduate student is a student who is enrolled in an undergraduate course of study at a college/university or career school that usually doesn’t exceed four years and leads to an undergraduate degree or certificate.

An unsubsidized loan borrowed through the Direct Loan Program offers students a low, fixed interest rate and flexible repayment terms. It is not based on financial need. The borrower is responsible for paying all the accumulated interest, until the loan balance is paid off.

Untaxed income is income you don’t pay taxes on, such as Supplemental Security Income, child support, or federal or public assistance.

The Direct Loan Program is the federal student loan program under which eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Loans include Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation Loans.

A withholding is an amount of money that an employer takes out of your wages and pays to the government. If too little is withheld, you will owe additional taxes. If too much is withheld, you receive a refund.