Personal Finance Vocabulary 2 Review

certifications

Students who are looking to learn specific skills can look into free or low-cost ______________ found online, at community colleges, or through government funded programs.

on-the-job-training

You, the employee, train at the place of work while you are doing the actual job. Usually a professional trainer serves as the course instructor and uses a combination of hands-on activities and formal classroom training.

associate’s degree

Two year degree that can offer a variety of benefits including lower cost than four year colleges, specialized training, and a flexible schedule that allows you to work while you earn your degree.

trade schools

Allow students to learn basic professional skills in two years or less because technical schools typically cut out many of the general courses required by traditional universities.

debt

Owing anything to anyone for any reason.

lenders

Extend credit to students without fully weighing their ability to repay the debt.

tuition and fees

The price you pay for taking classes at your college.

sticker price

The overall cost of tuition and fees that is advertised by the college.

net price

The remaining amount that must be paid — either with savings or student loans.

scholarships and grants

Different rewards to help pay for/cover the cost of college.

FAFSA

A form that determines your eligibility for federal, state, and college-based financial aid; it must be filled out each year you are in college.

student aid report (SAR)

Summarizes the information in your FAFSA; Includes your Expected Family Contribution (EFC), now known as Student Aid Index (SAI).

EFC/SAI

Used to determine eligibility for federal student aid and does not necessarily mean that the students and their families will have to contribute exactly that amount.

award letter

A letter that outlines your financial aid package from the college(s) to which you applied, detailing your federal, state, institutional, and private aid.

cost of attendance (COA)

Tuition and fees, room and board, books, living expenses.

what can you get financial aid from?

Grants, scholarships, work study, federal student loans.

scholarship

Type of aid primarily awarded for academic merit (good grades) or for something you have accomplished (volunteer work, athletics, etc.) that does not need to be repaid.

grants

Student aid coming from the state or federal government, the college itself, or from private sources that does not need to be repaid.

pell grant

A Federal program based on substantial financial need and which does not need to be repaid.

principal

Original amount of money borrowed, seperate from interest or fees.

interest rate

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

capitalized interest

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

repayment period

The maximum time period over which you must repay your student loan — currently between 10 and 30 years for federal loans.

promissory note

A contract signed by the student agreeing to pay back all student loan obligations.

loan servicer

The organization that collects payments on a federal student loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaing a loan on behalf of of a loan holder.

grace period

A period of time that generally begins on the day after a borrower graduates, leaves school, or drops below half time enrollment and ends on the day before the repayment period begins; borrower typically is not required to make payments during this time.

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.

delinquency

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

direct subsidized loans

Available to undergraduate students with financial need; your school determines the amount you can borrow, and the amount may not exceed your financial need; the U.S. Department of Education pays the interest.

direct unsubsidized loans

Available to undergraduate and graduate students; there is no requirement to demonstrate financial need; your school determines the amount you can borrow based on your COA and other financial aid you recieve; you are responsible for paying the interest.

direct PLUS loan

Available to eligible parents and graduate or professional students; U.S. Department of Education is your lender.

direct consolidation loans

If you have multiple student loans, you may be able to combine them into one loan with a fixed interest rate based on the average of the interest rates on the loans being consolidated.