Personal Finance Unit 2 College

Vocab from the college (post-secondary) unit in personal finance.

Direct Unsubsidized Loan

Federal loan where borrower is responsible for interest at all times.

Grant

Free money for college that does not need to be repaid, usually based on need.

Loan Default

Failure to repay a loan according to the agreed upon terms, leading to serious consequences.

Direct PLUS loan

Federal loan program available to graduate students or parents of dependent undergrads; requires credit check.

Grace Period

Period after leaving school before repayment begins, usually 6 months.

Exit Counseling

Required online session before leaving school that explains loan repayment responsibilities.

Gift Aid

Free money from government, schools, or private sources that does not need to be repaid.

Deferment

A period during which federal student loan payments are postponed often due to specific circumstances such as enrollment in school at least half-time, unemployment, or economic hardship. Interest may not accrue on subsidized federal loans during deferment.

Entrance Counseling

Required online session that explains student loan responsibilities before borrowing.

Direct Subsidized Loan

Federal loan where the government pays the interest while the student is in school.

Fixed-Rate Loan

A loan with an interest rate that remains the same for the life of the loan.

Disbursement

The release of loan or grant funds to a students account or directly to them.

Federal Student Loans

Funded by U.S federal gov. to help students pay for college. These loans typically have lower interest rates and more flexible repayment options than private loans.

Delinquency

Missing a loan payment by the due date, before the loan goes into default.

Forbearance

A period during which a borrower is allowed to temporarily reduce or pause payments due to financial difficulty or other reasons approved by the lender. interest accrues on all loans, including subsidized federal loans, so the total cost of the loan may increase.

Work-Study

Part-time job provided to students with financial need to help cover costs.

Pell Grant

A need-based federal grant for undergraduates.

Loan Refinancing

Replacing existing loans with a new one that may offer better terms

Prepayment Penalty Fee

A fee charged for paying off a loan early.

Principal

The original amount of money borrowed before interest.

Master Promissory Note

A legally binding agreement to accept loan terms and conditions.

Loan Consolidation

Combining multiple loans into one with a single monthly payment.