Glossary of Terms

Accruing Interest
The adding of interest to a loan amount. For some loans, interest charges begin to add up as soon as the loan is made, increasing the total due.

Borrower
The person who assumes legal obligations for the repayment of the loan principal plus interest. In the case of a Federal Perkins Loan, Graduate PLUS, or Federal Direct Loan, the borrower is the student. In the case of the Parent PLUS Loan, the borrower is the parent.

Consolidation
Combining two or more loans into one new loan that may feature a longer repayment period, and a single monthly payment that is smaller than the sum of previous monthly payments. Although this may help with the borrower's monthly expenses, consolidation loan borrowers may pay more in interest over the life of the loan.

Cosigner
A signer other than the borrower who agrees to assume responsibility for repayment in the event that the borrower fails to repay. Private educational alternative loans may require cosigners but federal loans usually do not.

Cost of Attendance (Budget)
The cost of attendance includes not only tuition and fees, but also expenses such as books and transportation while attending school. The cost of attendance is determined by Husson University using guidelines established by federal regulations.

Default
A borrower's failure to repay according to the terms agreed upon when the promissory note was signed. Default can also occur when a borrower fails to submit requests for deferment or cancellation. When a borrower defaults on a federal student loan, the school, the organization holding the loans, the guarantee agency, and the federal government may all take action to recover the funds. A borrower is considered to be in default when payments are 270 or more days overdue and no satisfactory arrangements for repayment, deferment, or forbearance have been made. Assets, including Internal Revenue Service (IRS) refunds may be garnished, and the borrower's credit record or history will be negatively affected. Student loan borrowers cannot get out of default until they pay back their loan in full or make satisfactory payment arrangements with their lender. They are also ineligible for additional federal student aid, including grants and loans until the default has been resolved. 

Deferment
An authorized period of time during which a student loan borrower may postpone making payments. Borrowers must file deferment forms with each lender. Deferments are available if borrowers are enrolled in school at least half-time, enrolled in a graduate fellowship program or rehabilitation training program, unemployed, or experiencing demonstrated economic hardship. The federal government makes interest payments on subsidized direct loans during deferment periods.

Dependent
Students are considered dependent if they are required to include parent information on the FAFSA. For an individual to be considered your dependent, they must live with you and you must provide them with more than half of their financial support. Spouses do not count as dependents.

Disbursement
The process by which funds are made available to students for use in meeting educationally related expenses. Funds are first credited to the student's account.

Disclosure Statement
Lenders are required to provide the borrower with a disclosure statement prior to issuing a loan. The disclosure statement provides the borrower with information about the actual cost of the loan, including the interest rate, origination, insurance and loan fees, and any other kinds of finance charges.

Educational Loan

This is money borrowed from the federal government or a private source in order to help pay for your educational expenses. This money must be paid back with interest.

Enrollment Status

The number of credits students are enrolled in affects their financial aid. If a student drops below half time status, they will enter repayment.

Entrance/Exit Counseling
Borrowers are required to electronically submit Entrance Counseling per federal regulations before they receive their first federal loan disbursement, and electronically submit Exit Counseling prior to leaving school. Log onto www.studentaid.gov with your FSA Username and Password.

Free Application for Federal Student Aid (FAFSA)
A form distributed and processed by the U.S. Department of Education, used in applying for all federal Title IV student aid programs, as well as some state and institutional programs. The FAFSA collects the information required to determine need and eligibility according to Federal Methodology. The FAFSA is available online at www.studentaid.gov .

Federal Direct Subsidized Loan

This type of loan is for undergraduate students, and it is based on financial need. It has a fixed interest rate and flexible repayment terms. You do not accrue interest while in-school (as long as you do not drop below half time) or while you are in a grace or deferment period.

Federal Direct Unsubsidized Loan

This type of loan is not based on financial need. It has a fixed interest rate and flexible repayment terms. Your interest begins to accrue when the loan is disbursed. 

Federal Direct Graduate PLUS Loan

These are loans borrowed by graduate or professional students from the federal government in order to pay for your education. Students are approved or denied based on a credit check. These loans begin accruing interest as soon as the funds are disbursed.

Federal Direct Parent PLUS Loan

These are loans taken out by parents of undergraduate students in order to pay for their child's education. To qualify for this type of loans, parents must pass a credit check. If a parent is denied, this may make the student eligible for additional loans.

Federal Methodology
The formula according to which a student's eligibility for Federal Title IV funds is determined. The formula takes into account income, some assets, expenses, family size, and other factors.

Federal Pell Grant
The Federal Pell Grant is available to students who are eligible per Federal Methodology, as a result of information submitted on the FAFSA. This grant is gift aid that does not need to be repaid.

Federal Supplemental Educational Opportunity Grant (FSEOG)
The Federal Supplemental Educational Opportunity Grant is available to students who have demonstrated the highest financial need according to Federal Methodology, as a result of information submitted on the FAFSA. This grant is gift aid that does not need to be repaid.

Federal Work-Study
Federal Work-Study allows a student to earn money by working a part-time job, which can be on campus or off campus at selected nonprofit organizations. Students must demonstrate financial need according to Federal Methodology to be offered work-study. Federal Work-Study is not subtracted from a student's bill; instead the student receives a paycheck every two weeks.

Financial Aid
Assistance provided to students to help them meet both direct costs of education (tuition/fees, on-campus room and board, books) and indirect costs (travel, personal expenses, off campus room and board). There are four sources of financial aid: federal government, state government, private organizations, and post-secondary institutions. There are several types of financial aid, including grants, scholarships, and loans.

Financial Aid Offer
An offer of financial assistance to a student attending a postsecondary educational institution. This offer may be in the form of one or more of the following types of financial aid: repayable loan, a non-repayable grant and/or scholarship, and/or student employment.

Financial Need
The difference between what it costs to attend a particular college and the amount that is determined that a student and his/her family can afford to pay towards those expenses (SAI). Also known as "demonstrated financial need".

FSA Username and Password

The FSA ID allows users to electronically access personal information on Federal Student Aid web sites as well as electronically sign a FAFSA. Parents and students must each create their own unique username and not use the same email address.

Grace Period
A specified period of time after a student leaves school or drops below half time status during which they are not required to make payments on either principal or interest. The grace period is typically six months for Federal Direct Loans and nine months for Perkins Loans. 

Grants
Money that doesn't need to be repaid, except under certain circumstances. Also known as gift aid. One example is the Federal Pell Grant.

Holder
The organization with legal title to a borrower's loan. The holder may be the lender that originally made the loan, a secondary market to which the lender has sold the loan, or, in the event of default, the guarantee agency or the federal government.

Interest
The fee charged to a borrower for the use of someone else's money, computed as a percentage of what is borrowed. The interest rate may remain constant throughout the life of the loan (fixed) or may change at specified times (variable).

ISIR (Institutional Student Information Report)
This is an electronic record sent to the school as a result of completing the Free Application for Federal Student Aid (FAFSA). 

Legal Guardian
An individual appointed by a court to be a legal guardian of a person and who is specifically required by the court to use their own financial resources to support that person. This person is not considered a "parent" for financial aid purposes; please contact the Financial Aid Office for more information.

Lender
A financial institution such as a bank, a savings and loan association, a credit union, or a qualified program that makes FFELP and/or private loans.

Matriculated
To be enrolled at an eligible institution working toward a degree or certificate in an eligible program.

Net Price

The Net Price shows what the student is expected to pay for their education on their own (this can be covered by many sources, including savings, student employment, institutional payment plans, or education loans). This number is calculated by using the Cost of Attendance and subtracting grants and scholarships.

Origination Fee
A fee charged by the federal government and deducted from the proceeds of a loan before disbursement; partially offsets the administrative costs of the federal loan programs. 

Outside Assistance
Outside assistance includes scholarships, grants, waivers, and loans to be used toward the student's college expenses. Students are required to notify the Financial Aid Office in writing of any outside financial assistance. Students will be notified of changes in their financial aid award as a result of outside assistance.

Parent Contribution
The portion of a parent(s) income and assets reported on the FAFSA that are considered available to contribute toward their student's education costs.

Promissory Note
The legal document that binds a borrower to the repayment obligations and other terms and conditions that govern a loan program.

Principal
The original amount borrowed. Origination and default fees are deducted from this amount before disbursement, and interest is computed as a percentage of principal. If a you borrow $2,500 a year for four years of college, the principal is $10,000. You then pay interest on the outstanding (or remaining) principal each month until the entire loan is paid off.

Private Loans

This is a type of loan available through private lenders and not the federal government. The terms and conditions of the loan depends on the lender, and repayment begins while the student is still in school.

Student Aid Index (SAI)

This index, which replaced the EFC on the FAFSA, is used to determine your eligibility for federal and other need-based financial aid. Students with a higher SAI are eligible for less need-based aid.