Academic Year

This is a measure of academic work to be accomplished by a student. A school defines its own academic year, but federal statute and regulations set minimum standards to determine federal financial aid awards. For instance, the academic year must be at least 30 weeks of instructional time in which a full- time student is expected to complete at least 24 semester or trimester credit hours, 36 quarter credit hours, or 900 clock hours.

Accounting Period

A time period for which financial records are maintained and at the end of which financial statements are prepared.

Accrual Basis

The type of accounting under which incomes are recorded when earned (regardless of when cash is actually received) and expenses are recorded when liabilities are incurred (regardless of when cash is actually expended).

Accrued Interest

Interest on a loan that accumulates and is to be paid in installments at a later time rather than being paid from the time the loan is made. Accrued interest may be compounded or simple. It is usually paid when the principal becomes due.

Depending upon the type of loan, this interest is payable by the borrower or the federal government.

Accrued Salaries

Wages earned by students between the date that the students were last paid and the end of the accounting period being reported, but not yet paid to the students. The unpaid student wages are considered a school liability.

Adjusted Gross Income (AGI)

Taxable income after all allowable deductions are made, such as IRA deductions, moving expenses, self-employment taxes and health insurance, Keogh retirement plans, and alimony paid.

Amortization

The reduction of loan debt through your monthly payments of principal.

Asset Protection

A sum subtracted from a family's total assets when determining the expected family contribution to college costs. This provides a safety net for families, and the allowance increases with the age of the parents.

Assets

The amount a family has in savings and investments. This includes savings and checking accounts; a business; a farm or other real estate; and stocks, bonds, and trust funds. Cars are not considered assets, nor are such possessions as stamp collections or jewelry. The net value of the principal home is counted as an asset by some colleges in determining their own awards but is not included in the calculation for eligibility for federal funds.

Award

A specific amount of financial assistance to pay for education costs offered to a student through one or more financial aid programs. Also, the approval of financial assistance to students, as in one function of an institution is to award campus-based financial aid to students who meet all the eligibility criteria.

Award Adjustment or Revision

An action by a financial aid office resulting in an increase, decrease, program-source substitution, or cancellation of a student's financial aid award.

This may be necessitated by factors such as a change in the student's enrollment status or a change in the financial circumstances of the student's family or the student.

Award Packaging (See Packaging)

Award Year

An award year begins on July 1 of one year and extends to June 30 of the next year. Funding for Federal Pell Grants and campus-based programs is provided on the basis of the award year--for example, a student is paid out of funds designated for a particular award year, such as the 1997-98 award year.

Base Year

For need analysis purposes, the base year is the calendar year preceding the award year. For instance, 1996 is the base year used for the 1997-98 award year. The Free Application for Federal Student Aid (FAFSA) uses family income from the base year because it is more accurate and easier to verify than projected year income.

Borrower

Anyone who obtains money from a lender. The borrower signs a promissory note, which serves as the formal promise to repay the loan.

Business Office

The school office responsible for an institution's financial accounting, including Title IV aid program activity. The office disburses financial aid award payments to students and student accounts and processes loan checks. At various schools, it is sometimes referred to as the fiscal office, finance office, comptroller's office, bursar's office, treasurer's office, or student accounts office. See SEPARATION OF FUNCTIONS.

Robert C. Byrd Honors Scholarship

A Title IV financial aid program that makes scholarships available to full-time postsecondary students with exceptional academic ability and promise. Students apply for the merit-based scholarships through their state education agencies. The program was created in 1984 and named to honor Senator Robert C. Byrd.

Campus Based Programs

The term applied to the majority of postsecondary education:

- Federal Perkins Loan Program,

- Federal Work-Study (FWS) Program, and,

- Federal Supplemental Educational Opportunity Grant (FSEOG) Program.

(See individual program names.)

Cancellation (of a loan)

This occurs when a borrower meets specific requirements that permit nullifying the borrower's obligation to repay all or a designated portion of principal and interest on a student loan. It may also be referred to as "discharge."

Capitalizing Interest

A process in which interest that has accrued but not been paid is added to the loan principal for both the FFEL and Federal Direct Loan Programs. Capitalizing is a consequence of delaying interest payments; it increases the amount of the principal and, consequently, the total amount that must be repaid.

Certificate

An award granted for the successful completion of a sub-baccalaureate program of studies, usually requiring less than 2 years of full-time postsecondary study.

Citizen/Eligible Noncitizen

A student must be one of the following to receive federal student aid:

- U.S. citizen

- U.S. national (includes natives of American Samoa or Swain's Island)

- U.S. permanent resident who has an I-151, I-551, or I-551C (Alien Registration Receipt Card)

If a student is not in one of these categories, he or she must have an Arrival-Departure Record (I-94) from the U.S. Immigration and Naturalization Service (INS) showing one of the following designations:

- "Refugee"

- "Asylum Granted"

- "Indefinite Parole and/or Humanitarian Parole"

- "Cuban-Haitian Entrant, Status Pending"

- "Conditional Entrant" (valid only if issued before April 1, 1980)

- Other eligible noncitizen with a Temporary Resident Card (I-688) Or a student can be eligible on the basis of the Family Unity Status category with an approved I-797 (Voluntary Departure and Immigrant Petition). If a student has only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), he or she is not eligible for federal student aid. If a student is in the U.S. on an F1 or F2 student visa, or on a J1 or J2 exchange-visitor visa only, he or she can't get federal student aid. Also, persons with G series visas (pertaining to international organizations) are not eligible for federal student aid.

Co-Borrower (Signer)

A person who signs the promissory note for a loan in addition to the borrower. The co-borrower becomes equally responsible for the debt. If the borrower does not pay, the co-borrower is responsible for payment of the debt.

Cohort

A group of individuals who have a statistical factor in common, for example, year of birth.

Consolidation Loan

A consolidation loan combines several loans into one bigger loan. This sometimes results in a lower interest rate, as when a consumer loan is used to pay off credit card balances. Such loans often reduce the size of the monthly payment by extending the term of the loan. An extension of the term of the loan may also increase the overall cost of the loan. Consolidation loans also simplify the repayment process by allowing a single payment instead of several. Direct Consolidation Loans are available through the establishment of an Individual Education Account. A loan originated by the Student Loan

Marketing Association (Sallie Mae) or other eligible lenders. The loan can combine multiple student loans made under Title IV programs, the Health Professions Student Loan (HPSL) Program, the Health Education Assistance Loan (HEAL) Program, and the recently included Nursing Student Loan Program (NSLP) into a single loan with one monthly payment. Delinquent or defaulted borrowers may be allowed to establish a repayment schedule through a consolidation loan. Compare FEDERAL DIRECT

Cost of Attendance (COA)

Section 472 of the Higher Education Act sets forth specific statutory parameters for cost of attendance (COA) for Title IV aid programs.

A student's cost of attendance includes tuition and fees, room and board expenses while attending school, allowances for books and supplies, transportation, loan fees (if applicable), dependent- care costs, costs related to a disability, and other miscellaneous expenses. In addition, reasonable costs for a study-abroad program and costs associated with a student's employment as part of a cooperative education program may be included. There are also special rules for less-than-half-time students and correspondence-study students. The cost of attendance is estimated by the school. The cost of attendance is compared to a student's Expected Family Contribution (EFC) to determine the student's need for aid.

Collateral

Something of value pledged as security for a loan. Banks do not require collateral for all loans.

College

A postsecondary school that offers general or liberal arts education, usually leading to an associate's, bachelor's, master's, doctor's, or first- professional degree. Junior colleges and community colleges are included under this terminology.

College Board

A nonprofit membership organization of colleges, secondary schools, and education associations that administers the SATs and runs the College Scholarship Service.

 College Scholarship Service

The arm of the College Board and one of the agencies that processes financial aid information and applications.

Combined elementary and secondary school

A school that encompasses instruction at both the elementary and secondary levels. Examples of combined elementary and secondary school grade spans would be grades 1-12 or grades 5-12.

Commercial Bank

An institution whose primary function is making loans to businesses.

Compound Interest

Interest that is periodically added to a principal sum, resulting in a new principal balance which then triggers a new interest assessment.

Cosigner

A second creditworthy party who signs a promissory note with a borrower who does not have collateral or good credit history. The second party guarantees that the loan will be repaid if the borrower fails to make payments.

Dependent student

A student who under federal criteria is considered to be financially dependent on his or her parents or guardians. Most full-time students are considered dependent until they are 24 years old.

Doctor's degree

An earned degree carrying the title of Doctor. The Doctor of Philosophy degree (Ph.D.) is the highest academic degree and requires mastery within a field of knowledge and demonstrated ability to perform scholarly research. Other doctorates are awarded for fulfilling specialized requirements in professional fields, such as education (Ed.D.), musical arts (D.M.A.), business administration (D.B.A.), and engineering (D.Eng. or D.E.S.). Many doctor's degrees in both academic and professional fields require an earned master's degree as a prerequisite. First professional degrees, such as M.D. and D.D.S., are not included under this heading.

Default

Failure to repay a loan in accordance with the terms of the promissory note. Default can also occur if students fail to submit requests for deferments or discharges (cancellations) in a timely manner.

For Perkins Loans: Failure of a borrower to make a loan- installment payment when due or to meet other terms of a signed promissory note or written repayment agreement.

For FFEL and Direct Loans: Failure to make a loan-installment payment on (a) a loan repayable in monthly installments for 180 days or (b) for FFEL, a loan payable in less frequent installments for 240 days.

There can be serious legal consequences for student-loan defaulters.

See COHORT DEFAULT RATE.

Deferred Interest

Interest payments that are delayed while a borrower is not gainfully employed, as, for example, when the borrower is a student. This benefit is generally characteristic of federal and state guaranteed student loans.

Deferment of a loan

A period of postponement during which repaying loan principal is suspended as a result of the borrower meeting one or more of a number of deferment requirements established by law. While the borrower does not pay interest on SUBSIDIZED loans during deferment, interest expenses continue to accumulate during deferment of an UNSUBSIDIZED loan. Compare FORBEARANCE (ON A LOAN).

Delinquency

You are delinquent if your payment is not received by the due date. Delinquencies greater than 30 days are reported to national credit bureaus.

Delivery

In the Federal Family Education Loan Program, the process of a school transmitting loan proceeds to a borrower. See Disbursement.

Dependency Status

A student's dependency status determines to what degree the student is expected to have access to parental financial resources. An independent student is one who is 24 years old as of January 1 (e.g., born before January 1, 1974 for academic year 1997-98), is married, is a graduate or professional student, has legal dependents other than a spouse, is a veteran, or is an orphan or ward of the court. All other students are considered dependent and, as such, must provide parental information on the Free Application for Federal Student Aid.

Direct Loan (See Federal Direct Loan Program)

Disbursement

The process by which Title IV program funds are paid to a student or parent borrower. A school may:

- pay a student or parent directly,

- by check or other means payable to the student and requiring the student's endorsement or certification (or, in the case of a parent borrowing under the Direct Loan Program or FFEL Program, requiring the endorsement or certification of the student's parent);

- by initiating an electronic funds transfer (EFT) to a bank account designated by the student (or, in the case of a parent borrower, an account designated by the parent); or

- by dispensing cash to the student for which the school obtains a signed receipt from the student: OR

- credit a student's account.

Eligible Program

A course of study that requires a certain minimum number of hours of instruction and period of time and that leads to a degree or certificate at a school participating in one or more of the federal student financial aid programs described in this handbook. Generally, to get student aid, a student must be enrolled in an eligible program.

Eligible Institution

A public or private nonprofit institution of higher education, a postsecondary vocational school, or a proprietary institution of higher education that meets all the criteria to participate in Title IV student financial aid programs.

Eligible Student

The definition of a student eligible to receive federal financial aid from ED is discussed in detail in The 1995-96 Federal Student Financial Aid Handbook, Chapter 2, and Section 668.7 of the Student Assistance General Provisions regulations.

Enrollment Period

For the Federal Family Education Loan (FFEL) and Federal Direct Loan Programs, the period of time for which a borrower's loan is intended and during which a student is enrolled. For a school that uses academic terms (semester, trimester, or quarter) an enrollment period must coincide with the one or more terms or with an academic year. For a school that does not use academic terms, an enrollment period must coincide with the length of a student's program of study or an academic year.

Enrollment Status

At those institutions using semesters, trimesters, quarters, or other academic terms and measuring progress in credit hours, enrollment status equals a student's credit-hour course load. At these schools, a full-time undergraduate student enrolls in at least 12 semester hours or 12 quarter hours each term. At those institutions measuring progress in clock hours, enrollment status equals a student's clock-hour course load. At these schools, a full-time student receives 24 hours of instruction in one week. At either type of school, student enrollment may be categorized as full-time, three-quarter-time, half-time, or less-than-half-time. At those institutions using a combination of both credit and clock hours, enrollment status for a full-time student is any combination of credit and clock hours where the sum of the following fractions is equal to or greater than one.

- For a program using a semester, trimester, or quarter system:

Number of credit hours per term

----------------------------------

12

PLUS

Number of clock hours per week

----------------------------------

24

- For a program not using a semester, trimester, or quarter system:

Number of semester or trimester hours

per academic year

-------------------------------------------

24

PLUS

Number of quarter hours per academic year

---------------------------------------------

36

PLUS

Number of clock hours per week

----------------------------------

24

At non-term institutions, enrollment status for a full-time student is 24 semester hours or 36 quarter hours per academic year or the prorated equivalent for a program of less than one academic year.

Entrance Counseling (for a student borrower)

Each institution participating in the Federal Perkins, FFEL, and Federal Direct Loan Programs (excluding PLUS and Direct PLUS loans) must offer loan counseling to first-time student borrowers called "entrance" counseling. The institution must offer this counseling before the delivery of the first disbursement of any of these loans to a borrower at the institution. Entrance counseling covers the borrower's rights and responsibilities, the terms and conditions of the loan, and the consequences of default. Compare

Exit Counseling (for a student borrower)

Each institution participating in the Federal Perkins, FFEL, and Federal Direct Loan Programs (excluding PLUS and Direct PLUS loans) must offer loan counseling called "exit " counseling to student borrowers. For Federal Perkins borrowers, the interview must take place before the borrower leaves school. In the case of FFEL and Federal Direct Loan student borrowers, the interview must take place shortly before the borrower ceases at least half-time enrollment.

During the interview, the borrower's rights and responsibilities are reviewed, details about handling loan repayment are discussed, and the average indebtedness of the school's borrowers must be disclosed. Borrowers are also required to provide updated personal information such as address, telephone number, employer (if known), and driver's license and state of issuance. See The 1995-96 Federal Student Financial Aid Handbook, Chapters 6 and 10, for complete information on loan counseling requirements. Compare

ENTRANCE COUNSELING (FOR A STUDENT BORROWER).

Expected Family Contribution (EFC)

The figure that indicates how much of a family's financial resources should be available to help pay a student's postsecondary education expenses. This figure, determined according to a statutory defined method known as Need Analysis, is used for all students in determining eligibility for most federal Title IV student financial aid.

FAFSA (Free Application for Federal Student Aid)

This ED input document is the foundation for all need analysis computations. The application form is completed by the student and family. It gathers data to calculate the Expected Family Contribution

(EFC). See NEED ANALYSIS and EXPECTED FAMILY

CONTRIBUTION (EFC).

 Federal Direct Consolidated Loan

A loan is arranged through ED's Direct Loan Servicing Center. The loan is designed to combine Title IV education loans (including non-Direct loans) into a single loan with one monthly repayment. Borrowers may also consolidate certain student loans from the U. S. Department of Health and Human Services. If borrowers consolidate defaulted loans, a new payment schedule is established. Compare

CONSOLIDATION LOAN.

Federal Direct Loan Program (William D. Ford Federal Direct Loan Program)

A federal program where the U.S. government provides four types of education loans to student and parent borrowers:

- the Federal Direct Stafford/Ford Loan,

- the Federal Direct Unsubsidized Stafford/Ford Loan,

- the Federal Direct PLUS Loan, and

- the Federal Direct Consolidation Loan.

These are also referred to collectively as Direct Loans.

See individual loan names.

Federal Direct Plus Loan

Parents may borrow from this education loan program on behalf of their dependent children. As one of the Direct Loans, PLUS loans are made directly by the federal government through students' schools.Compare Federal Plus Loan.

Federal Direct Stafford Loan

Subsidized on the basis of student financial need, this loan program provides federally financed low-interest loans to students who are in undergraduate, graduate, or professional programs. During in-school, grace, and deferment periods, such as when a borrower is in school, the federal government does not charge interest on the loan. The loan formerly was part of the Guaranteed Student Loan (GSL) Program.

In 1987, it was renamed to honor Senator Robert T. Stafford; in 1992, the word "Federal" was added to its name.

Federal Direct Stafford Loan

Unsubsidized, this loan program provides federally financed, low-interest loans to students who are in undergraduate, graduate, or professional programs. These loans are not based on financial need and are not government subsidized. The borrower may pay the interest charges on the loan on a quarterly basis during in-school, grace, or deferment periods, or may allow the interest to accumulate and be capitalized when repayment begins. See CAPITALIZING INTEREST and FEDERAL DIRECT STAFFORD/FORD LOAN (SUBSIDIZED).

Compare UNSUBSIDIZED FEDERAL STAFFORD LOAN.

Federal Direct Education Loan (FFEL) Program

Formerly called the Guaranteed Student Loan (GSL) Program, this group of federal education loans was renamed the Federal Family Education Loan (FFEL) Program as part of the 1992 reauthorization of the Higher Education Act (HEA). The FFEL Program is made up of Federal Stafford Loans (both subsidized and unsubsidized), Federal PLUS (parent) Loans, and Federal Consolidation Loans. All of these are long-term loans insured by state or private nonprofit guaranty agencies that are reimbursed by the federal government for all or part of the insurance claims paid to lenders. This guaranty replaces the collateral or security usually required with long-term consumer loans. The Federal Supplemental Loans for Students (SLS) Program, which was once part of the FFEL Program, was eliminated by legislation, effective July 1, 1994. See individual loan names.

Federal Pell Grant Payment and Disbursement Schedules

Charts published annually by the U.S. Secretary of Education that determine the dollar value of student Federal Pell Grant awards on the basis of schools' costs of attendance (COA) and students' Expected Family Contributions (EFC).

Federal Pell Grant Program

A grant program for undergraduate students who have not completed a first baccalaureate degree. It is designed to financially assist students with need who are the least able to contribute toward their basic education expenses. If students apply, meet all the eligibility criteria, and are enrolled in an eligible program at an eligible institution, they will receive Federal Pell Grants. Formerly, this grant was called the Basic Educational Opportunity Grant (BEOG). In 1982, it was renamed to honor Senator Claiborne Pell; later the word "Federal" was added to its name.

Federal Perkins Loan (FPL) Program

This campus-based loan program provides low-interest student loans to undergraduate and graduate students with financial need. Formerly, it was called the National Direct Student Loan (NDSL) Program and the National Defense Student Loan Program. In 1987, it was renamed to honor Congressman Carl D. Perkins; later the word

"Federal" was added to its name. See CAMPUS-BASED PROGRAMS.

Federal Plus Loan

Parents may borrow from this education loan program on behalf of their dependent children. Loans are made by lenders such as banks, credit unions, or savings and loan associations. Compare FEDERAL DIRECT PLUS LOAN.

Federal register

The government publication, published each weekday (except federal holidays), that prints regulations, regulatory amendments, notices, and proposed regulatory changes for all federal executive agencies. ED sends reprints of excerpts from the Federal Register that pertain to federal student financial aid to all institutions participating in Title IV programs.

Federal Student Financial Aid Handbook

A Department of education publication that explains procedures schools should follow in administering federal student financial aid (SFA) programs. Some of these procedures are required by laws and regulations, while other procedures are necessary for the various reporting systems of each Title IV program.

Federal Supplemental Educational Opportunity Grant

(FSEOG) Program

A campus-based aid program that provides grant assistance to students with financial need who are in undergraduate programs and have not earned a bachelor's degree or first professional degree. Priority in awarding Federal Supplemental Educational Opportunity Grant (FSEOG) funds is given to students who have exceptional financial need and are Federal Pell Grant recipients. See CAMPUS-BASED PROGRAMS.

Federal Work Study (FWS) Program

A campus-based, federally funded employment program that provides paid jobs for undergraduate or graduate students who need such earnings to meet a portion of their education expenses. Formerly, it was called the College Work-Study Program. See CAMPUS-BASED PROGRAMS.

Financial Aid Transcript (FAT)

A document used by institutions to collect data about Title IV aid and other financial aid received by a student at other educational institutions. Institutions must provide completed financial aid transcripts (FAT) at no charge to students and former students.

Financial Need

The difference between the student's cost of attendance (COA) at a specific institution and what the student's family is able to pay--the Expected Family Contribution (EFC). See COST OF ATTENDANCE (COA) and EXPECTED FAMILY CONTRIBUTION (EFC).

Financial responsibility

An institution must show that is has the financial responsibility to participate in federal Title IV student aid programs. Financial responsibility covers general standards as well as exceptions institutions can meet as alternatives. The standards include those for for-profit, nonprofit, and public institutions and cover the past performance of an institution or persons affiliated with an institution. For further information, refer to Section 668.15 of the Student Assistance General Provisions Federal Register, April 29, 1994 or Chapter Two of The Blue Book.

Forbearance (on a loan)

When an FFEL lender (or the U.S. Department of Education for Direct Loans) allows a TEMPORARY cessation of payments or reduction of payment amounts for subsidized or unsubsidized Federal Stafford, Federal PLUS, Federal Perkins, or Federal Direct Loans. In doing so, it allows an extended period for making payments or accepts smaller payments than were previously scheduled. Forbearance may be given for circumstances that are not covered by deferment. Interest expenses continue to accrue during forbearance. Forbearance is an option of the FFEL lender or ED. However, there are a few circumstances where forbearance is mandatory with FFEL borrowers. See CFR 682.211(i) and CFR 682.211(j). Compare DEFERMENT (OF A LOAN).

Free Application For federal Student Aid (See FAFSA)

GED recipient:

A person who has obtained certification of high school equivalency by meeting state requirements and passing an approved exam, which is intended to provide an appraisal of the person's achievement or performance in the broad subject matter areas usually required for high school graduation. (See General Educational Development Test.)

General Educational Development (GED) Test

A test administered by the American Council on Education as the basis for awarding a high school equivalency certification. Graduate: An individual who has received formal recognition for the successful completion of a prescribed program of studies.

Graduate Record Examination (GRE)

Multiple-choice examinations administered by the Educational Testing Service (ETS) and taken by applicants who plan to attend certain graduate schools. Two generalized tests are offered, plus specialized tests in a variety of subject areas. Ordinarily, a student will take only the specialized test that applies to the intended field of study.

Grants

Also known as scholarships, these are funds for postsecondary education that do not have to be repaid.

Gift Aid

Financial aid that a student is not required to repay or earn through employment. Generally, gift aid is in the form of a grant or scholarship.

Grace Period

The time period that begins the day after a loan recipient ceases to be enrolled at least half time and ends the day before the loan repayment period starts. Some loans have a grace period so that repayment doesn't begin until several months after graduation. Grace periods are specified in your promissory note.

Gross Income

Your income before taxes and deductions.

Grant (Programs)

Gift aid programs that require neither repayment nor a work obligation from students. Federal Title IV grant programs are the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), and State Student Incentive Grant (SSIG). See individual grant program names.

Guaranty Agency

A state agency or private, nonprofit institution or organization that administers the financial aid programs within the Federal Family Education Loan (FFEL) Program. One major function is to insure Federal Family Education Loans. Guaranty agencies are reimbursed by the federal government for all or part of insurance claims they pay to lenders.

Independent Student: Any individual who is 24 years of age or older by December 31 of the award year; is a graduate or professional student; is a married student; has legal dependents other than a spouse; is a veteran of the United States Armed Forces; is an orphan or ward of the court; or is a student for whom a Financial Aid Administrator makes a documented determination of independence by reason of unusual circumstances.

Indirect Costs

All the non-tuition-related costs associated with attending college, including room, board, transportation, medical, and personal expenses.

Interest

Interest is an amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. All new Federal Stafford and PLUS loans use variable interest rates that are tied to the rates for federal treasury bills.

High school

A secondary school offering the final years of high school work necessary for graduation, usually including grades 10, 11, 12 (in a 633 plan) or grades 9, 10, 11, and 12 (in a 624 plan).

Life sciences

Life sciences are instructional programs that describe the systematic study of living organisms. Life sciences include biology, biochemistry, biophysics, and zoology.

Loan

An advance of funds guaranteed by a signed promissory note in which the recipient of the funds promises to repay a specified amount(s) under prescribed conditions.

Loan Disclosure Statement

A statement sent to a loan borrower by the lender before or at the time it disburses a loan, as well as before the start of the repayment period. The purpose of the disclosure is to provide the borrower with thorough and accurate information about the loan terms and the consequences of default. It includes information such as:

- amount of the loan,

- interest rate,

- fee charges,

- length of the grace period (if any),

- the maximum length of the repayment, AND

- the minimum annual repayment, deferment conditions, and the definition of default.

 Office of Student Financial Assistance (OSFA)

The U.S. Department of Education that has the responsibility for administering federal student financial aid programs and for developing aid policies and procedures.

Origination Fee

The origination fee is an upfront charge deducted from the loan to pay part of the loan's administrative costs.

Packaging

The process of assembling one or more financial aid awards of loans, grants and/or scholarships, and employment for a student; also referred to as award packaging.

Part-time enrollment

The number of students enrolled in higher education courses with a total credit load less than 75 percent of the normal fulltime credit load.

Part-time worker

One who is employed for 1-34 hours a week, including paid leave for illness, vacation, and holidays. Hours may be reported either for a survey reference week, or for the previous calendar year, in which case they refer to the usual hours worked.

Payment Period

A school-defined length of time for which financial aid funds are paid to a student. For programs using academic terms, a payment period is equal to a term. For programs not using academic terms, schools must designate at least two payment periods within an academic year, pursuant to all applicable regulations. In the Federal Family Education Loan (FFEL) Program, and campus-based programs, a payment period is the time between the beginning and midpoint and end of the academic year or non-traditional program calendar. The Federal Pell Grant Program payment period is defined in 34 CFR 690.3 of the Federal Pell Grant regulations. The concept of a payment period is not used in the Federal Direct Loan Program. Compare ENROLLMENT PERIOD.

Payment Reimbursement Method

A method certain schools must use to request federal financial aid funds from the Department of education. Rather than drawing down Title IV funds BEFORE disbursing them to students, a school submits Form PMS 270, "Request for Advance or Reimbursement," to ED to be reimbursed for the funds it has expended AFTER making aid disbursements to students. Payment is made by ACH/EFT.

Pay-off Balance

This is the amount you would pay if you were to pay off your loan today. It includes the outstanding principal plus any unpaid accrued interest.

Pell Grants ( See Federal Pell Grant Program )

Percentile (score)

A value on a scale of zero to 100 that indicates the percent of a distribution that is equal to or below it. A score in the 95th percentile is a score equal to or better than 95 percent of all other scores.

Perkins Loan (See Federal Perkins Loan Program)

Personal income

Current income received by persons from all sources minus their personal contributions for social insurance. Classified as "persons" are individuals (including owners of unincorporated firms), nonprofit institutions serving individuals, private trust funds, and private non-insured welfare funds. Personal income includes transfers (payments not resulting from current production) from government and business such as social security benefits and military pensions, but excludes transfers among persons.

Physical sciences

Physical sciences are instructional programs that describe inanimate objects, processes, or matter, energy, and associated phenomena. Physical sciences include astronomy, astrophysics, atmospheric sciences, chemistry, geology, physics, planetary science, and science technologies.

Plus Loan See Federal Direct Plus Loan and Federal Plus

Postsecondary education

The provision of formal instructional programs with a curriculum designed primarily for students who have completed the requirements for a high school diploma or equivalent. This includes programs of an academic, vocational, and continuing professional education purpose, and excludes vocational and adult basic education programs.

Private school or institution

A school or institution that is controlled by an individual or agency other than a state, a subdivision of a state, or the federal government, which is usually not supported primarily by public funds, and is not operated by publicly elected or appointed officials.

Prime Rate

The fluctuating interest rates that banks charge to their best business customers. Many commercial loans have interest rates that fluctuate based on the prime rate.

Principal

Principal is the amount of money borrowed under the loan. Interest is charged as a percentage of the principal.

Promissory Note

A binding legal document that a borrower signs to get a loan. By signing this note, a borrower promises to repay the loan, with interest, in specified installments. The promissory note will also include any information about the grace period, deferment, or cancellation provisions, and a borrower's rights and responsibilities with respect to that loan.

Racial/ethnic group

Classification indicating general racial or ethnic heritage based on self-identification, as in data collected by the Bureau of the Census, or on observer identification, as in data collected by the Office for Civil Rights. These categories are in accordance with the Office of Management and Budget standard classification scheme presented below:

American Indian/Alaskan Native: A person having origins in any of the original peoples of North America and maintaining cultural identification through tribal affiliation or community recognition.

Asian/Pacific Islander: A person having origins in any of the original peoples of the Far East, Southeast Asia, the Indian subcontinent, or the Pacific Islands. This area includes, for example, China, India, Japan, Korea, the Philippine Islands, and Samoa.

Black: A person having origins in any of the black racial groups in Africa. Normally excludes persons of Hispanic origin except for tabulations produced by the Bureau of the Census, which are noted accordingly.

Hispanic: A person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish culture or origin, regardless of race.

White: A person having origins in any of the original peoples of Europe, North Africa, or the Middle East. Normally excludes persons of Hispanic origin except for tabulations produced by the Bureau of the Census, which are noted accordingly.

Renewal FAFSA

The version of the FAFSA that students may use if they applied for federal financial aid the previous award year. If a student is among those allowed to complete a Renewal FAFSA, it will be sent directly to him or her by the FAFSA processor or the school.

Repayment Policy

The institutionally established policy that determines the amount of education-related expenses (non- institutional costs) reasonably incurred during a student's actual period of attendance

Repayment Schedule A Specific Timetable

The borrower's repayment plan as its basis, that details the amount of loan principal and interest due in each repayment installment and the number of payments that will be required to pay off the loan in full.

Additionally, a repayment schedule traditionally lists the loan's interest rate, the due date of the first loan payment, and the frequency of loan payments.

Resources

Other student aid that must be taken into account to prevent an overaward in the campus-based programs, as defined in federal regulations for the campus-based programs. Resources are called "estimated financial assistance" in determining a student's eligibility for some federal student loans.

SAR Information Acknowledgement -- A noncorrectable one-page Student Aid Report composed of Part 1 only; it is sent to students who transmit electronic applications or corrections through their schools.

 Salary

The total amount regularly paid or stipulated to be paid to an individual, before deductions, for personal services rendered while on the payroll of a business or organization.

Salary workers

Any person who worked one or more days during the previous year and was paid on the basis of a yearly salary is considered a salary worker.

Satisfactory Academic Progress

To be eligible to receive federal student aid, you must maintain satisfactory academic progress toward a degree or certificate. You must meet your school's written standard of satisfactory progress. Check with your school to find out its standard.

If you received federal student aid for the first time on or after July 1, 1987, and you're enrolled in a program that's longer than two years, the following definition of satisfactory progress also applies to you: You must have a C average by the end of your second academic year of study or have an academic standing consistent with your institution's graduation requirements. You must continue to maintain satisfactory academic progress for the rest of your course of study.

Scholastic Assessment Test (SAT)

An examination administered by the Educational Testing Service and used to predict the facility with which an individual will progress in learning college level academic subjects.

School year

The 12month period of time denoting the beginning and ending dates for school accounting purposes, usually from July 1 through June 30.

Science

The body of related courses concerned with knowledge of the physical and biological world and with the processes of discovering and validating this knowledge.

Scholarship

A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board.

School

A postsecondary educational institution, such as a college, university, or career school. In this handbook, the term "school" refers to such an institution.

Secondary school

A school that has any span of grades beginning with the next grade following an elementary or middleschool (usually grade 7, 8, or 9) and ending with or below grade 12. Both junior high schools and senior high schools are included.

SFA Programs

The programs administered by the office of Student Financial Assistance Programs within the U.S. Department of Education: Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, Federal Work-Study, Federal Perkins Loans, Federal Direct Stafford/Ford Loans, Federal Direct PLUS Loans, Federal Stafford Loans, Federal PLUS Loans, and State Student Incentive Grants.

Simple Interest

Interest computed only on the original amount of a loan.

Simplified Needs Test

The primary purpose of the Simplified Needs Test is to make it easier for some students to fillout the Free Application for Federal Student Aid (FAFSA). If a dependent student's parents' income is less than $50,000 and the relevant family members were non-tax filers or were eligible to use a1040A or a 1040EZ to file their taxes, the student completes only the first part of the application; the asset information will not have to be provided.

Social and behavioral sciences

A group of scientific fields of study that includes anthropology, archeology, criminology, demography, economics, geography, history, international relations, psychology, sociology, and urban studies.

Social studies

A group of instructional programs that describes the substantive portions of behavior, past and present activities, interactions, and organizations of people associated together for religious, benevolent, cultural, scientific, political, patriotic, or other purposes.

Socioeconomic status (SES)

The SES quartile variable used for both High School and Beyond and the National Education Longitudinal Study of 1988 was built using parental education level, parental occupation, family income, and household items. Students were placed in quartiles based on their standardized composite score. By definition, one quarter of each cohort will reside in the bottom SES quartile, even if education levels, income, and the number of persons in more prestigious occupations increase. The terms high, middle, and low SES refer to the upper, middle two, and lower quartiles of the weighted SES composite index distribution.

Student Aid Report (SAR)

A federal output document sentto a student by the application processor. The SAR contains financialand other information reported by the student on the Free Application for Federal Student Aid (FAFSA). That information is entered into the processing system, and the SAR is produced. The student's eligibility for aid is indicated by the EFC, which is printed on the front of the SAR. (See Institutional Student Information Record.)

Technical/professional fields

A group of occupationally oriented fields of study, other than engineering and computer science, that includes agriculture and agricultural sciences, architecture, business and management, communications, education, health sciences, home economics, law, library and archival sciences, military sciences, parks and recreation, protective services, and public affairs.

Tuition and fees: A payment or charge for instruction or compensation for services, privileges, or the use of equipment, books, or other goods.

Types of higher education institutions:

4-year institution: An institution legally authorized to offer and offering at least a 4-year program of collegelevel studies wholly or principally creditable toward a baccalaureate degree. In some tables a further division between universities and other 4year institutions is made. A "university" is a postsecondary institution that typically comprises one or more graduate professional schools. (See also University.)

2-year institution

An institution legally authorized to offer and offering at least a 2year program of collegelevel studies that terminates in an associate's degree or is principally creditable toward a baccalaureate degree.

Teaching Assistantship (TA)

A form of financial aid given to graduate students to help support their education. Teaching assistantships usually provide the graduate student with a waiver of all or part of tuition, plus a small stipend for living expenses. As the name implies, a TA is required to perform teaching duties.

Title IV Student Financial Aid

TITLE IV Federal financial aid programs for students attending postsecondary educational institutions, authorized under Title IV of the Higher Education Act of 1965, as amended. The programs are administered by the U.S. Department of Education. Title IV programs consist of:

- Federal Pell Grants,

- Federal Supplemental Educational Opportunity Grants (FSEOG),

- Federal Work-Study (FWS),

- Federal Perkins Loans,

- Federal Family Education Loan (FFEL) Program loans,

- Federal Consolidation Loans,

- State Student Incentive Grants (SSIG),

- William D. Ford Federal Direct Loans,

- Robert C. Byrd Honors Scholarships, AND

- Presidential Access Scholarships (currently, these scholarships are

unfunded).

Undergraduate students

Students registered at an institution of higher education in a program leading to a baccalaureate degree or other formal award below the baccalaureate such as an associate's degree.

Unemployed

Civilians who had no employment but were available for work and 1) had engaged in any specific job-seeking activity within the past 4 weeks, 2) were waiting to be called back to a job from which they had been laid off, or 3) were waiting to report to a new wage or salary job within 30 days.

University

An institution of higher education that consists of a liberal arts college, a diverse graduate program, and usually two or more professional schools or faculties, and is empowered to confer degrees in various fields of study.

Unsubsidized Federal Stafford Loan

A federal student loan program that provides low-interest loans to students in undergraduate, graduate, and professional programs. Unsubsidized loans are not awarded on the basis of financial need. Interest on an unsubsidized loan is charged to the borrower throughout the life of the loan.

Variable Interest

Interest rates for the Federal Stafford Loans (subsidized and unsubsidized) are set by the government each year and therefore vary from year to year. The interest rate is set annually each July 1. See your Financial Aid Administrator for specific rates.

Verification

A procedure where a school checks the information a student reported on the FAFSA, usually by requesting a copy of signed Federal tax returns filed by the student and, if applicable, the student's parent(s) and spouse. Schools must verify students selected for verification by the federal central processing system, following procedures established by federal regulations. The contractor prints an asterisk next to the Expected Family Contribution (EFC) on SAR to identify students selected for verification. Many schools also select students for verification in addition to those selected by the central processing system.

Vocational education

Organized educational programs, services, and activities that are directly related to the preparation of individuals for paid or unpaid employment, or for additional preparation for a career, requiring other than a baccalaureate or advanced degree.

William D. Ford Federal Direct Loan Program (see Federal Direct Loan Program)

Work-study

A generic term for programs designed to provide part-time employment as a source of funds to pay for postsecondary education as well as a federal program that is administered through postsecondary institutions.

Year-round worker

One who was employed at least 50 weeks during the previous calendar year, including paid leave for illness, vacation or other reasons.