The List: Download Vocabulary on Financial Aid

The List: Download Vocabulary on Promissory Notes

Flash Cards: Financial Aid

Flash Cards: Decoding a Promissory Note

Drag and Drop Quiz: Financing Post-Secondary Education

The Vocabulary:

Financial Aid

Direct -Federal Loan – Loans available from the U. S. government issued under the William D. Ford Federal Direct Loan Program
Direct PLUS Loan – Loans made to parents of dependent students; interest is charged once the loan is disbursed. This loan requires a credit check
EFC – Expected Family Contribution; The dollar amount that a family is expected to pay toward a student’s educational costs, based on family earnings, assets, students in college, and family size
FSEOG – Federal Supplemental Educational Opportunity Grant; Grant money provided by the federal government for schools to award to students who demonstrate exceptional financial need
Grant – Financial aid that is typically based on need and does not have to be repaid
Pell Grant – A grant awarded by the federal government to students who display exceptional financial need
Private student/parent loan – Education funding from banks, credit unions, and lenders other than the federal government
SAP – Satisfactory Progress; An eligibility requirement for borrowers, established by schools, to receive federal student aid 
Scholarship – A form of financial assistance that does not require repayment
Student loan servicer – A company assigned to handle the billing and other services on a private or federal student loan
Subsidized loan – A federal loan for which the government pays the interest while you are in school at least half-time, during your post-graduation grace period, and if you need a loan deferment
TEACH – Teacher Education Assistance for College and Higher Education; Grants to students who are completing or plan to complete course work toward a teaching career. Requires recipients to agree to complete four years teaching as a condition for receiving a grant
Unsubsidized loan – A federal loan for which the borrower is responsible to pay interest as soon as the loan is received
Work study – Part-time jobs for students with financial need, allowing them to earn money to help pay education expenses

Decoding a Promissory Note

APR – Annual Percentage Rate; The cost of credit for one year expressed as a percentage
COA – Cost of Attendance; tuition and fees, room and board, allowances for books and supplies, transportation, and personal and incidental expenses are included
Capitalization – Adding unpaid, outstanding interest to the principal balance of a loan when the borrower postpones paying interest
Cosigner – A person who agrees to repay the loan in the event the primary borrower does not; a cosigner is considered a co-borrower and is equally responsible for repayment of the loan
Credit check – A written report issued by a credit bureau that contains relevant information about a person’s creditworthiness
Creditworthy – A lender’s determination that a credit applicant is likely to repay the loan according to the terms
Default – Failure to make payments or to meet the terms and conditions of the loan’s promissory note
Deferment – A time when a borrower is not required to make any payments. Interest continues to accrue and will be added to the principal balance
Disbursement – The delivery of loan funds to the school or the borrower. Loan disbursements are generally credited to the student’s account at the school
Fixed interest rate – An interest rate that remains the same for the life of the loan
Forbearance – A temporary postponement of payments
Grace period – A period of time when the student is not required to make student loan payments, usually for six or nine months after graduation, but also when dropping below half-time status or withdrawing from school
In-school payments – Financial aid that is typically based on need and does not have to be repaid
Privacy – The ability to control the information that is shared about you
Principal – The original amount of money disbursed plus the interest capitalized during the life of the loan
Promise to pay (promissory note) – A legally binding agreement the borrower (and cosigner) sign, in which there is a promise to repay a loan, with interest, in periodic installments
Term/repayment period – The amount of time the borrower is scheduled to repay the principal balance and interest on a loan
Variable interest rate – An interest rate that may change periodically throughout the life of the loan