Deferment
A deferment is a period of time during which a borrower can suspend the payments on his or her loan(s). A borrower must meet eligibility requirements for a deferment.

Delinquent/Delinquency
A borrower becomes delinquent when he or she has missed a student loan payment.

Department of Education
The Department of Education is a U.S. government agency that administers the federal student financial aid programs (Federal Pell Grant, Federal SEOG, Federal Work Study Program, Federal Perkins Loans, Federal Direct Loan Program, and Federal Family Education Loan Program).

Dependent
A dependent, for financial aid purposes, is a student whose parents' income is considered when calculating the student's eligibility for federal financial aid.

Disbursement
A disbursement is the release of your student loan funds to the college. It may be done by check or Electronic Funds Transfer (EFT).

Electronic Funds Transfer (EFT)
EFT is a method of disbursing loan funds by electronically transferring them to the college.

E-Messaging
E-Messaging is an EAC e-mail service to help high school students prepare for college. Register now.

Expected Family Contribution (EFC)
Expected Family Contribution is the amount the student and his or her
family are expected to pay toward the student's education each year. This
calculation is based on earnings, assets, family size, and number in college.

Federal Family Education Loan Program (FFELP)
The FFEL Program includes the Federal Stafford, PLUS, and Consolidation Loan programs.

Financial Aid Administrator (FAA)
A Financial Aid Administrator is an employee of the postsecondary institution who is responsible for the administration of the institution's financial aid programs.

Financial Aid Office (FAO)
The Financial Aid Office is the college office that coordinates the awarding and disbursing of financial aid.

Financial Aid Package
The financial aid package is the total amount of grants, scholarships, loans, and work study employment from all sources (federal, state, institutional, and private) offered to a student. The Financial Aid Administrator at the postsecondary institution combines the various forms of aid into a "package" to help meet a student's need.

Financial Aid Services (FAS) Team
EAC's FAS Team is a group of financial aid experts who can help students answer financial aid questions. The FAS Team is available at 1-800-874-9033 or FAS@eac-easci.org.

Financial Need
Financial need is the difference between the student's Cost of Attendance (COA) and Expected Family Contribution (EFC).

Forbearance
Forbearance is a period of time in which student loan payments are reduced or postponed. Interest continues to accrue. Borrowers must request forbearance from their lender/holder.

Forgiveness
Forgiveness programs repay a portion of the student loan debt for qualified borrowers.

Free Application for Federal Student Aid (FAFSA)
The FAFSA is the form that must be completed for most types of financial aid, including grants, loans, and work study. The FAFSA is available online at www.fafsa.ed.gov, from high school counselors, college financial aid offices, or a local library.

Garnishment
When garnishment occurs, a portion of wages is withheld from a defaulted borrower's paycheck to repay his or her student loan.

Gift Aid
Gift aid is financial aid, such as grants and scholarships, which does not need to be repaid.

Grace Period
Grace is a six-month period beginning after the borrower graduates, withdraws, or drops to less than half-time attendance and ending when the borrower enters repayment.

Graduated Repayment
This is a repayment plan that begins with smaller payments that gradually increase over time.

Grant
A grant is an entitlement and is money for college that does not need to be repaid. Grants are often based on financial need. A student's eligibility for many grants is based on the results of the FAFSA.

Guaranty Agency/Guarantor
A guaranty agency is a state or private nonprofit organization that has an agreement with the U.S. Secretary of Education to administer a loan guarantee program under the Higher Education Act.

Holder
The holder legally holds the title to a student loan. A holder can be a lender, a secondary market, or a guaranty agency.

Income-Sensitive Repayment
An income-sensitive repayment plan bases the amount of monthly payments on the borrower's gross monthly income.

Independent Student
For financial aid purposes, an independent student is one whose parents' income is not considered in determining the student's eligibility for federal financial aid. However, if the student is married, the spouse's income will be considered.

Interest
Interest is the percentage charged on a student loan.

Lender
The lender is the loan provider that funds a student loan.

Master Promissory Note (MPN)
The MPN is a form that must be completed and signed before Stafford and PLUS loan funds can be disbursed. It is the borrower's promise to repay the loan.

Need Analysis
Need Analysis is the calculation used to determine the Expected Family Contribution. It is performed when a student submits his or her FAFSA to the U.S. Department of Education's Central Processing System (CPS).

Origination Fee
Federal law requires an origination fee be assessed on each loan and it may be deducted from a student's loan proceeds. It is paid to the Department of Education and helps offset the cost of the Federal Stafford Loan Program.

Pell Grant
The Federal Pell Grant is awarded based on FAFSA information. The amount is determined by financial need, cost of education, and the student's enrollment status during an academic year.

Perkins Loan
The Federal Perkins Loan is a low-interest loan that helps students pay college costs.

Personal Identification Number (PIN)
The Department of Education can provide students and parents with a PIN that will serve as a unique identifier for purposes of electronically signing the FAFSA and Master Promissory Note (MPN). A PIN is available at www.pin.ed.gov.

PLUS Loan
The Federal PLUS Loan is available to parents, or in certain circumstances, stepparents, of dependent students and to graduate and professional students to help cover the cost of education.

Prepayment
Prepayment is the practice of paying ahead on a student loan. Prepayment will result in the borrower paying less interest through the life of the loan.

Principal
Principal is the unpaid balance of the amount borrowed.

Priority Date
The priority date is the date, set by the college, by which you must complete your Free Application for Federal Student Aid to take full advantage of the financial aid opportunities at that college.

Rehabilitation
Rehabilitation allows borrowers to get out of default by making nine payments within 20 days of the due date during ten consecutive months.

Repayment Schedule
A repayment schedule notifies borrowers of the payment amount, monthly due date, interest rate, and term of loan.

Satisfactory Academic Progress (SAP)
In order to receive federal student aid, the student must maintain satisfactory academic progress toward a degree or certificate. Each school has specific written satisfactory progress standards.

Scholarships
Scholarships are monetary awards to students who demonstrate certain characteristics such as academic accomplishments or athletic, musical, or artistic ability. Scholarships do not need to be repaid.

Secondary Market
It is common for a lender to sell a student loan to a secondary market, a company that may hold your loan throughout repayment. The terms of the loan do not change at the time of the sale.

Stafford Loan
The Federal Stafford Loan is a federal loan program available to help students cover the costs of college.

Student Aid Report (SAR)
The SAR is sent to the student by the Department of Education upon the processing of the FAFSA. This lists the demographic and financial information the student provided on the FAFSA.

Subsidized Stafford Loan
The federal government pays the interest on a subsidized Stafford loan during eligible school, grace, and deferment periods.

Term
The loan term is the amount of time you are given to repay your student loan, often approximately ten years.

Unsubsidized Stafford Loan
The federal government does not pay the interest on an unsubsidized Stafford loan at any time.

Verification
Verification is a review process in which the Financial Aid Office determines the accuracy of the information provided on the FAFSA. The student and parent (if applicable), if selected for verification, will be required to submit documentation, including but not limited to, a Verification Form and Federal income tax returns.

Work Study
The Federal Work Study program gives students the opportunity to work on campus, and in some instances, off campus, to earn money to help pay for school.

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