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A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U |
V | W | X | Y | Z |
| Accrued Interest |
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Interest which accrues on the loan and is payable by the borrower or, in the case of subsidized Federal Stafford Loans, by the federal government, during in-school, grace, and deferment periods. |
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| Amortization |
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The reduction and retirement of a debt through periodic payments of interest and principal. |
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| APR (Annual Percentage Rate) |
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A percentage calculation that reflects the total cost of a loan (interest plus all fees) on an annual basis. |
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| Capitalization of Fees and Interest |
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Fees and accrued interest on a loan are added to the principal balance. Both then become part of the principal balance and begin to accrue interest. |
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| Cosigner |
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A signer in addition to the principal signer for private student loans for those borrowers who do not meet the minimum credit requirements. The cosigner assumes liability for the obligation of a consumer without receiving goods, services, or money in return for the obligation. |
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| Consumer Reporting Agency |
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An agency that compiles, maintains, and distributes credit and personal information to creditors. This information may include a borrower’s payment habits, number of credit accounts, balance of those accounts, place of employment, length of employment, and records of financial transactions. Lenders check with credit bureaus to learn whether a potential customer seeking a loan is likely to repay, based on the way other obligations have been handled in the past. |
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| Credit Score |
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A quick and consistent method of determining the likelihood that you will repay a future loan on time. It is an evaluation tool that predicts how well you will manage credit, relative to other borrowers, based on your past credit performance. The credit score is a snapshot that focuses on individual borrower behavior. Some examples of the factors used to calculate your credit score are promptness in paying bills, amount owed on accounts, available credit limit, age of oldest account, and mix of accounts. |
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| Credit Report |
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A summary of your credit history. It is maintained by an authorized consumer reporting agency and sent to potential creditors, when requested. Credit reports include information such as current and recent addresses, employer information, payment performance for seven years, type of debt you have and the lending institution for each account, available credit, and current balances. |
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| Default |
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The failure of a borrower either to make installment payments when due or to comply with other terms of the promissory note. |
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| Deferment |
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A period during which the repayment of the principal amount of the loan is suspended as a result of the borrower's meeting one of the requirements established by law and/or contained in the promissory note. During this period, the borrower may or may not have to pay interest on the loan. |
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| Deferred Interest |
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Interest that accrues, but on which payment is delayed until a later date. Such deferred (accrued) interest may be capitalized. |
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| Delinquent (Borrower) |
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A borrower who has failed to make one or more scheduled payments by the due dates. |
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| Disclosure Statement |
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A statement of the actual loan costs, including the interest rate and any additional fees, which is presented to the borrower at the time the loan is made. Your disclosure statement should include the name of your lender, guarantor, and servicer. |
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| Endorser |
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A signer in addition to the principal signer for Federal PLUS Loans for those borrowers who do not meet the minimum credit requirements. The endorser signs a promissory note and agrees to repay the loan in the event that the borrower does not. |
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| Entrance Interview |
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A loan repayment and debt management counseling session required by federal regulations that is arranged and conducted by a school’s financial aid office for students who are receiving their first federally guaranteed student loan associated with attendance at the school. This counseling session must be conducted before the student can receive the proceeds of the first disbursement of any federally guaranteed education loan. |
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| Standard Repayment |
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A repayment plan in which an equal or level amount is paid each month for the entire repayment term. All payments include both principal and interest. |
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| Exit Interview |
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A loan repayment and debt management counseling session required by federal regulations that is arranged and conducted by a school’s financial aid office for students who have received federally guaranteed loans while attending school. This counseling session must be conducted before the student graduates or leaves the school, whenever possible. |
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| Extended Repayment |
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A repayment plan for borrowers who have total Federal Family Education Loan Program (FFLEP) or Federal Direct Loan Program (FDLP) education debt exceeding $30,000. This plan allows borrowers to repay their FFLEP/FDLP loans over a maximum term of 25 years, instead of 10 years, using either graduated or fixed payments that are adjusted on an annual basis. Available only to new Stafford Loan borrowers as of Oct. 7, 1998. |
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| FAFSA |
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Free
Application for Federal Student Aid. Learn
more. |
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| FDL (Federal Direct Loan Program) |
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The federal loan program administered by the U.S. Department of Education that offers Federal Direct Stafford, Federal Direct PLUS and Federal Direct Consolidation Loans. As of July 1, 2010, all students borrow Stafford and Grad PLUS Loans through the FDLP. |
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| Federal Direct Consolidation Loan |
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A program offered by the Federal Direct Loan Program that allows many federal education loans to be combined into a single new loan with an extended repayment term. |
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| Federal Direct PLUS Loan |
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The Federal PLUS Loan program is an unsubsidized federal education loan. Parents of undergraduate students can borrow the PLUS Loan on behalf of their undergraduate child, while graduate and professional students can borrow the Graduate PLUS Loan.
An amount up to the cost of attendance less any other financial aid can be borrowed in a given academic year. Federal PLUS Loans have a fixed interest rate of 8.5%. There are no aggregate borrowing limits in this program. The borrower cannot have adverse credit in order to borrow a Federal PLUS Loan. If the borrower does have adverse credit, he or she can provide an endorser who does not have adverse credit in an effort to obtain the loan. |
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| Federal Perkins Loan |
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A need-based federal loan for students, which is issued by a participating school. |
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| Federal Direct Stafford Loan |
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A federal education loan funded by the U.S. Department of Education.. There are two types of Federal Stafford Loans, subsidized and unsubsidized. Subsidized Stafford Loans are based on need, and the interest is paid by the federal government while the student is in school, during the grace period, and during eligible deferment periods. Unsubsidized Stafford Loans are not based on need, and the borrower is responsible for the interest. |
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| FFEL (Federal Family Education Loan Program) |
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A loan program offering Stafford and PLUS loans financed by private lenders and guaranteed by the Federal Government that was available through June 30, 2010. |
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| Forbearance |
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An agreement to accept a temporary cessation of loan payments, smaller payments than were previously scheduled, or an extension of time for making payments. Forbearance may be given for circumstances not covered by deferment that adversely affect the borrower's ability to meet loan payment obligations, such as economic hardship. |
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| Garnishment of Wages |
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The deduction of a portion of a borrower’s paycheck, by his/her employer, with or without the borrower’s consent. A lender or the government may take this action to force repayment of a loan that is in default. |
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| Grace Period |
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A period of time that begins when you graduate, leave school, or your enrollment status drops below half-time, whichever comes first, and ends when your first loan payment is due. Interest continues to be deferred on subsidized loans during the grace period. |
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| Graduate PLUS Loan |
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See Federal PLUS Loan. |
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| Graduated Repayment |
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A repayment plan that offers lower payments at the beginning of repayment and then payments increase in steps during the repayment period. |
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| Guarantee /Guaranty |
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To insure a loan and agree to pay the holder if the borrower defaults. |
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| Holder |
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The lender, institution, or agency that originated the loan and holds its legal title, or a lender or secondary market that purchased the loan from the original holder. |
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| Income-Based Repayment |
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A income-related plan for Federal Stafford Loans, Federal Grad PLUS Loans and Federal Consolidation Loans (that do not include the payoff of a Federal Parent PLUS Loan). |
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| Income-Sensitive Repayment |
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A FFLEP repayment plan that is based on the borrower's income and total federal education loan debt. Payments increase as income rises. The repayment term may be lengthened in this program. |
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| Index |
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A financial instrument that provides the basis for the interest rate charged on a loan. Alternative private student loans are typically indexed to other widely accepted financial instruments, such as the current LIBOR rate, the current T-bill rate, or the current Prime rate. |
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| Interest |
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A charge for the use of money. Interest is calculated as a percentage rate of the loan principal. The interest rate charged can be fixed, which means it does not change over the life of the loan, or the rate can be variable, in which case, it changes periodically. The percentage rate may be tied to one of several indexes such as the Prime Rate, LIBOR, or U.S. Treasury Bills. |
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| LIBOR |
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(3-Month LIBOR/London Interbank Offered Rate) A financial index on which the interest of Access Group Private Loans is based. LIBOR is similar to indexes such as the U.S. Treasury Bill, the Prime Rate, and Commercial Paper. For Access Group private loans, the interest rate varies quarterly, and is calculated by adding a per annum percentage (which varies by discipline and institution) to the LIBOR on the last day of the second month of the prior quarter. For current rates, the LIBOR is listed daily in the Wall Street Journal and on www.bloomberg.com. |
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| Lender |
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The bank, savings and loan, credit union, or other approved entity from which the borrower obtains a loan. |
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| Loan Period |
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The academic year or portion thereof for which the applicant is enrolled and is seeking one or more loans. |
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| Mandatory Forbearance |
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A forbearance that is authorized on federal loans for conditions such as temporary hardship; economic hardship; internship/residency; to align repayment of multiple loans; Student Loan Repayment Program (for students eligible for assistance from the Department of Defense); and national and community service. |
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| MPN (Master Promissory Note) |
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This is the legally binding contract between the borrower and the lender of a Federal Stafford Loan. By signing the MPN, the borrower agrees to all terms and conditions, including the responsibility to repay all borrowed funds along with any interest and fees that are charged. Unlike other promissory notes where only one loan can be borrowed per signed note, the MPN allows a school to make multiple Federal Stafford Loans to a borrower using the single note (up to 10 years). |
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| Need Access |
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Need Access is a financial aid application tool offered by Access Group that gathers information from students to determine their eligibility for institutional financial aid. Please visit NeedAccess.Org for more information. |
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| Notification of Change in Lender, Holder or Servicer |
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In the event that your loan is sold or transferred between lenders/holders or servicers you will be notified of this change. The notification is intended to inform you of changes in who holds the promissory note, or owns, your loan and to whom you should send payments or correspondence regarding your loan. |
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| Origination Fee |
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A
fee calculated as a percentage of the principal amount borrowed;
it is deducted from each disbursement of the loan and remitted
to the federal government to offset the costs of administering
the federal student loan program. |
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| Originate |
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Origination includes receiving a loan application, entering that record into a records database, processing the loan application, and sending loan funds (money) to the borrower. |
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| Parent PLUS Loan |
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See Federal PLUS Loan. |
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| Principal |
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Principal refers to the total amount borrowed plus any capitalized fees and interest. |
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| Private/Alternative Loans |
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Student loans that are offered to supplement federal loan programs or for students who are not eligible to participate in federal student loan programs. Terms and interest rates vary by lender. Most private/alternative student loans are credit based. |
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| Promissory Note |
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A legal document signed by the borrower when obtaining a loan. It lists the conditions under which the loan is made and the terms under which the borrower agrees to repay the loan. You should keep copies of your promissory notes so you know what you agreed to for each loan. |
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| Repayment Disclosure Statement |
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A statement of repayment terms of the loan that is required to be sent to the borrower prior to the due date of the first payment of the loan. |
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| Repayment Schedule |
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A plan which sets forth the principal and interest due in each installment, the number of payments required to pay the loan in full, the interest rate, and the due dates of the first and subsequent payments. |
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| Secondary Market |
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A lender, agency, or institution that buys education loans from the originating lenders or other holders. Lenders sell education loans to secondary markets to replenish and generate capital for their continuing operations, including making additional loans. |
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| Servicer |
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Companies that specialize in handling billing, collections, deferments, etc., for student loans. Many lenders and secondary markets hire servicers. |
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| Subsidized Federal Direct Stafford Loans |
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Loans based on need.The interest on such loans is paid by the federal government while the student is in school, during the grace period, and during eligible deferment periods. |
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| Terms |
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The specific conditions of a loan, including the requirements governing receipt and repayment of a loan. It is often used more specifically to refer to the charges for the loan, such as interest rate and fees. |
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| Unsubsidized Federal Direct Stafford Loans |
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Loans that are not based on need. The borrower is responsible for paying the interest. |
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