Paying for College vocab

con ed

Capitalized Interest

Unpaid interest that has been added to the principal balance of a loan

Cosigner

Someone who legally agrees to take responsibility for a person’s debt if they cannot repay it

Cost of Attendance (COA)

Total expense of going to college which may include tuition, room and board man fees, books and supplies, transportation, health insurance, etc. Also knows as the Sticker Price or a school’s published price.

Default

Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower’s credit score

Deferment

A process that allows a borrower to pause their federal student loan payments; interest does NOT accrue during this time period on subsidized loans

Delinquency

Describes the status of being behind on one or more loan payments

Direct Plus Loans

A federal loan available to graduate or professional students and eligible parent of dependent undergraduate students to help pay for the cost of the student’s education at participating schools.

Direct Subsidized Loan

A federal student loan available to undergraduate students; the federal government pays interest on the loan as long as the student is in school at least part-time

Direct Unsubsidized Loan

A federal student loan available to undergraduate and graduate students; the student is responsible for paying the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into the principal amount of their loan

Disbursement

A portion of a federal student loan that the school pays out by applying the funds to the student’s school account or by paying the borrower directly. Students generally receive their federal student loans in more than one disbursement.

Entrance Counseling

A mandatory information session which takes place before a student receives their first federal student loan. It explains their rights and responsibilities as a student borrower.

Exit Counseling

A mandatory information session which takes place when a student graduates leaves school, or attends school less than half-time. It explains the students loan repayment responsibilities and when prepayment begins

Fafsa Submission Summary (FSS)

The report you receive after submitting your FAFSA. It contains your EFC, Pell Grant eligibility, whether you’ve been selected for verification, and all other information that colleges will use to determine your financial aid package

Federal Student Aid

The total amount of financial aid in the country; federal aid programs come in the form of government grants, loans, and work-study opportunities

Financial Aid Offer

The total amount of financial aid (federal and non federal) a student is offered by a college, designed to help meet a student’s education costs

Fixed- Rate Loan

A loan with an interest rate that does not change over the life of the loan

Forbearance

A process that allows a borrower to pause their federal student loan payments; interest continues to accrue during this time period and may be capitalized

Free Application For Federal Student Aid (FAFSA)

A free online application that current or prospective college students can submit each year to determine their eligibility for financial aid

Gift Aid

Financial aid that does not have to be paid back, such as scholarships and grants

Grants

Student Aid coming from the state or federal government, the school, or from private sources that does not need to be repaid

Interest Rate

The rate charged for borrowing money usually expressed as a percent of the amount borrowed

Loan Refinancing

A process that REPLACES on or more existing federal or private loans with a new private student loan, ideally with lower interest rate

Loan Consolidation

A process that allows a borrower to COMBINE multiple federal loans

into one, allowing the borrower to make one monthly payment. The

new interest rate of the loan is a weighted average of the prior loans'

rates.