Glossary of Financial Aid Terms

CAPITALIZATION

If a student chooses to defer paying interest on a loan while in school, the interest is capitalized or added to the principal when the loan enters repayment.

CREDIT BALANCE REFUND

A credit balance issued to the student within 14 days from the date of disbursement in the case that their financial aid exceeds their quarterly charges.

DEFAULT

Failure to repay a Federal loan, effective when a student is delinquent 270 or more days.

DEFERMENT

An entitlement which allows a student to temporarily postpone payments for a variety of reasons including: unemployment, disability and returning to school.

DELINQUENCY

A student is considered to be delinquent on a student loan if payments are not made on time and are overdue. Delinquency can adversely affect a student’s credit rating and history.

DIRECT PLUS LOAN

Federally guaranteed loans for graduate and professional students. Requires credit approval by U.S. Department of Education.

DIRECT STAFFORD LOAN

A federal loan funded and administered by the U.S. Department of Education.

DISBURSEMENT

Loan funds issued by U.S. Department of Education to the school through electronic fund transfer.

FINANCIAL AID ELIGIBILITY

The difference between the total Cost of Attendance and the Expected Family Contribution (EFC).

FORBEARANCE

A forbearance is an agreement with the holder of the loan, at its discretion, to postpone payments.

GRACE PERIOD

The amount of time allowed before principal repayment of loan must begin after a student graduates, leaves school, or drops below half-time status.

INTEREST RATE

Based on the Bipartisan Student Loan Certainty Act of 2013, federal student loan interest rates will be tied to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan. Private Alternative Loans are generally variable and adjusted quarterly.

MASTER PROMISSORY NOTE (MPN)

The Master Promissory Note is a legal document. By signing it, a student promises to repay current and all future loans. Under this note a student may receive loans for a single enrollment period or for multiple enrollment periods.

ORIGINATION FEE

The fee charged by the government to offset the cost of processing the loan. The amount of the fee is deducted from the dollar amount of the loan.

PRINCIPAL

The amount of the loan that must be repaid upon maturity and the amount upon which interest will be charged.

PRIVATE LOAN

A non-federal loan designed to cover tuition costs plus a variety of additional costs and living expenses. Interest rates and terms are based on the applicants' credit score.

SAP (Satisfactory Academic Progress)

Satisfactory Academic Progress (SAP) standards ensure that you are successfully completing your coursework and can continue to receive financial aid. All students receiving financial aid are required to meet SAP standards.