Ability to Benefit

Students who are not high school graduates or who have not earned a General Education Development (GED) Certificate can demonstrate that they have the "ability to benefit" from the education or training being offered by passing an approved ability-to-benefit (ATB) test.

Academic Year

Academic year is defined as a period of time schools use to measure a quantity of study. A school's academic year may consist of a Fall and Spring semester during which a full-time undergraduate student must complete 24 semester hours. Academic years vary from school to school and even from educational program to educational program at the same school.

Accreditation

To be eligible to participate in the administration of Federal Student Aid Programs, schools must have accreditation from an accrediting body recognized by the U.S. Department of Education. Accreditation means that the school meets certain minimum academic standards, as defined by the accrediting body.

Award Letter

An award letter is the letter that your college sends you detailing the financial aid programs for which you're eligible and the amounts you can receive.

Capitalized

There are certain loans, such as subsidized FFEL Loans, the U.S. Department of Education pays the interest that accrues while the student is enrolled at least half-time and during periods of deferment. However, with subsidized loans in forbearance, unsubsidized loans or PLUS Loans, the student or the student's parents are responsible for paying interest as it accrues on these loans. When the interest is not paid, it is capitalized or added to the principal balance, which increases the outstanding principal amount due on this loan. Interest that is capitalized subsequently accrues interest, adding an additional expense to the loan.

COSTEP

A nonprofit organization dedicated to helping you to pay for college. COSTEP participates in the Federal Family Educational Loan Program (FFEL) by originating and servicing student loans. Plus, we help you and your parents understand the best financial aid options. The best part is that our help is FREE.

Cost of Attendance

This is the total amount it will cost to attend a college or university including: tuition and fees, room and board, supplies, transportation and miscellaneous expenses. Cost of Attendance varies by school.

Deferment

A period of time during which your lender temporarily suspends your loan payments. (During deferment, the Federal Government will pay the interest on Subsidized Stafford Loans only. If you have an Unsubsidized Stafford Loan, you will be responsible for paying the accrued interest.)

Default

Default occurs after 270 days of delinquency in not paying your student loan obligation.

Department of Education

Federal agency responsible for setting policies and administering the FFEL Program.

Disbursement

The loan funds that are delivered by check or by Electronic Funds Transfer (EFT) to your college or university.

Disclosure Statement

The notice you receive indicating the amount of your loan and when it will be disbursed.

Eligible Program

A program of organized instruction that leads to an academic, professional or vocational degree or certificate, or other recognized educational credential. To receive Federal Student Financial Aid, you must be enrolled in an eligible program. There are two exceptions:

1. If a school requires you to take certain course work to qualify for admission into one of its eligible programs, you can get a Stafford Loan for up to 12 consecutive months while you're completing the preparatory course work.
2. If you're enrolled at least half-time in a program to obtain a professional credential or certification required by a state for employment as an elementary or secondary school teacher, you may qualify for a Stafford Loan, or your parents can get a PLUS Loan, while you're enrolled in that program. (All loan proceeds must be used for your education.)

Expected Family Contribution

Amount you and your parents are expected to pay toward college expenses as determined by the Department of Education.

Financial Aid Package

This is, basically, how much money you are eligible to receive. It's the Cost of Attendance minus your Expected Family Contribution (EFC) and any additional Financial Aid you may receive.

Financial Need

The application used to apply for all types of student aid is available on-line at www.fafsa.ed.gov.

Forbearance

A period of time during which your lender temporarily suspends or reduces your loan payments. Forbearance is usually granted to borrowers without deferment eligibility. You are responsible for all interest that accrues during forbearance. Interest may be paid as it accrues during forbearance or it may be added to your principal.

General Education Development Certificate

This is a certificate that is issued when a student passes a high school equivalency test

Graduate/Professional Student

To qualify as a Graduate/Professional Student, you must be enrolled at least half-time in a graduate or professional program (for example, a program that leads to a Master's, Doctoral, Law or Medical degree) at a school that participates in the PLUS Program, and you must meet all of the other general eligibility requirements for the Federal Student Aid programs.

Guarantee Agency

A state or private organization that verifies eligibility for funding and insures your loan to the Lender. They also act as a liaison between the school, you and your parents and the Lender to ensure compliance with Federal egulations.

Half-time

At schools measuring progress in credit hours and semesters, trimesters or quarters, "half-time" is at least six semester hours or quarter hours per term of an undergraduate program. At schools measuring progress by credit hours but not using semester, trimesters or quarters, "half-time" is at least 12 semester hours or 18 quarter hours per year. At schools measuring progress by clock hours, "half-time" is at least 12 hours per week.
Check with the school that you'll be attending. Note: Schools may choose to set higher minimums than those defined here.

High School Guidance Counselor

Your first source for information on college.

Holder

An eligible lender owning a Federal Family Educational Loan program (FFEL). This is a Federal/ State agency, or an organization or corporation acting on behalf of such an agency and acting as a conservator, liquidator, or receiver of an eligible lender, may also be considered a holder.

In-Grace

This is the time that repayment of principal is not required. The period begins the day after a student ceases to be enrolled at least half time at an eligible school and ends the day before the repayment period begins. (See loan type for details.)

Interest

The fee charged for the money you borrow.

Lender

The financial institution that participates in the FFEL Program and funds your student loan.

Promissory Note

The contract between you and your lender.

Principal

The amount of your loan not including interest.

Regular Student

A regular student is one who is enrolled or accepted for enrollment at a school for the purpose of obtaining a degree, certificate or other recognized educational credential offered by that institution.

Repayment

The period in which a borrower takes on the responsibility of repaying the loans that helped finance the cost of education.

Satisfactory Academic Progress

Your school's standards of satisfactory academic progress towards a degree or certificate offered by that institution. See your school for their Satisfactory Academic Progress standards.

Secondary Market

An organization that buys student loans from a lender so the lender will have resources to fund new student loans.

Selective Service Registration

If you're a male born on or after January 1, 1960, are at least 18 years old, and are not currently on active duty in the U.S. Armed Forces, you must register with the Selective Service System to be eligible to receive Federal Student Financial Aid.

Servicer/Holder

An institution contracted by the Lender to originate your loan and perform administrative functions associated with the processing of your loan.

Student Aid Report

This is a report generated by the Department of Education (DOE) upon your completion of the FAFSA. It contains your Expected Family Contribution (EFC).

University/College Financial Aid Office

This office will determine your eligibility and certify your loan.