Glossary
Academic year
Generally defined as two academic semesters or three academic quarters.
Accrual date
The accrual day interest charges begin to be added to the loan balance.
Accruing interest
The adding of interest to a loan amount. For some loans, interest charges begin to add up as soon as the loan is made, increasing the total due.
Adjusted Gross Income (AGI)
Taxable income after all allowable deductions are made, such as IRA deductions, moving expenses, self-employment taxes and health insurance, Keogh retirement plans and alimony payments. (For more information, please see the IRS’ definition of AGI for individual taxpayers.)
Assets
For financial aid purposes, assets are generally considered to include cash on hand in checking and savings accounts, trusts, stocks, bonds, home equity, other securities (i.e., real estate, income-producing property, business equipment and business inventory). These assets are considered in determining expected family contribution (EFC).Assets in formal retirement plans are not generally considered in need in need analysis.
Award Notification
The award notification is a letter notifying financial aid applicants of the assistance being offered. The award notification usually provides information on the types and amounts of aid offered as well as specific program information, student responsibilities, and the conditions which govern the award. The award notification generally provides students with the opportunity to accept or decline the aid that is being offered. The acceptance form and the award notification are often the same document or combined in the same notification. Please retain copies of aid awards you receive.
Award Year
The award year for federal aid and most institutional aid begins on July 1 of one year and extends to June 30 of the next year.
Borrower
The person who assumes legal obligations for the repayment of the loan principal plus interest. In the case of a Federal Perkins or Federal Stafford Loan, the borrower is the student. In the case of a PLUS Loan and many private or supplemental loan programs, the borrower is the parent. In a few private programs, the student and the parent(s) assume the responsibility jointly.
Budget
Estimated cost of attendance; usually includes tuition, fees, books, supplies, room, board, personal expenses, and transportation.
Campus-Based Federal Financial Aid Programs
The Federal Perkins Loan, the Federal Supplemental Educational Opportunity Grant, and the Federal Work-Study programs. These three programs are called "campus-based" because the funds are administered directly by the school's financial aid office, which awards these funds to students using federal guidelines.
Capitalization
When a lender accrues interest before the borrower starts repayment, then adds that amount to the principal. This is sometimes called "compounding." Capitalizing increases the total to be repaid and the size of the minimum monthly payment. Students can avoid capitalizing interest by paying interest as it accrues.. Lenders may capitalize no more often than quarterly; the more frequently interest is capitalized, the more quickly it increases.
United States Citizen, Permanent Resident or Eligible Non-citizen
You must be one of the following to receive federal student aid:
1. United States citizen or
2. United States national (includes natives of American Samoa or Swain's Island) or
3. United States permanent resident who has an I-151, I-551, or I-551C (Alien Registration Receipt Card)
If you are not in one of these categories, you must have an Arrival-Departure Record (I-94) from the US Immigration and Naturalization Service (INS) showing one of the following designations in order to be eligible:
1. “Refugee” or
2. “Asylum Granted” or
3. “Indefinite Parole” and/or “Humanitarian Parole” or
4. “Cuban-Haitian Entrant, Status Pending” or
5. “Conditional Entrant” (valid only if issued before April 1, 1980).
If you have only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), you are not eligible for federal student aid. If you are in the United States only on an F1 or F2 student visa or only on J1 or J2 exchange visitor visa, you are not eligible for federal student aid. Also, persons with G series visas (pertaining to international organizations) are not eligible for federal student aid.
College Board
A national membership association that supports educational transitions through programs and services in assessment, guidance, admission, placement, financial aid, and educational reform.
Commercial Lender
Generally, lenders are commercial banks, savings and loan associations, credit unions, stock savings banks, trust companies or mutual savings banks or state agencies created specifically for this purpose. Commercial lenders provide services offered through the Federal Family Education Loan Programs as well as a variety of other loan programs for both students and parents.
Consolidation
Combining two or more loans into one new loan that has a longer repayment term and a single monthly payment that is smaller than the sum of previous monthly payments. By consolidating eligible federal student loans and extending the repayment term (up to 30 years, depending on the total loan amount), repayment can be easier. Note that while this may ease the borrower's cash flow, consolidation can add significantly to the amount of interest that is paid over time.
Co-signer
A signer other than the borrower who agrees to assume responsibility for repayment in the event that the borrower fails to repay. Guaranty agencies or lenders may require co-signers, but federal regulations do not.
Cost of Attendance or Cost of Education or Student Budget
The student's cost of attendance includes not only tuition and fees, but the student's living expenses while attending school. The cost of attendance is determined by The Office of Student Financial Aid with information provided by the student’s school in accordance with federal regulations. The cost of attendance is compared to the student’s expected family contribution to determine the student's need for financial aid.
Credit Check
While most Federal loan programs do NOT involve a credit check, there is a credit check which is an electronic process by which the lender verifies the credit (not employment) history for the PLUS.
Debt
An amount of money owed.
Default
A borrower's failure to repay according to the terms agreed upon when the promissory note was signed. Default also may occur when a borrower fails to submit requests for deferment or cancellation. The consequences of default are severe.
When a borrower defaults on a federal student loan, the school, the organization holding the loan, the guaranty agency, and the federal government all may take action to recover the money. A borrower is considered to be "in default" when payments are 180 or more days overdue and no satisfactory arrangements for payment, deferment or forbearance have been made. Assets, including Internal Revenue Service (IRS) refunds, may be seized and the borrower's credit record or history may be affected. Student loan borrowers in default will remain so until they pay back their loan in full, sign new loan agreements or reschedule their debt. While in default, they are also ineligible for additional federal student aid, including grants and loans.
Deferment
An authorized period of time during which a student loan borrower may postpone making payments on the principal or the principal plus interest. Borrowers must file deferment forms with their lenders and be approved for deferments. Deferments may be available if borrowers are the following:
1. enrolled in a degree-granting institution at least half-time or
2. enrolled in a graduate fellowship program or rehabilitation training program or
3. disabled or
4. serving in the military or the Peace Corps or
5. volunteering full-time for a non-profit organization or
6. teaching full-time in a teacher-shortage area or
7. unemployed or
8. experiencing demonstrated economic hardship.
The federal government makes interest payments on Subsidized Federal Stafford Loans during deferment periods.
Demonstrated Need
The difference between cost of college attendance and a student's (and the student's parents') ability to pay that cost:
Student's Cost of Attendance Budget - Family Contribution = Demonstrated Need
Dependents
Any child of the student who receives more than half support from the student (the child does not live with the student), including a natural or adopted child, or a child for whom the student is legal guardian. Also, any person who lives with the student and receives more than half support from the student during the award year.
Dependency Status
For federal student aid, a student's dependency status is determined by guidelines established by the federal government. To be considered independent for federal funds, a student must be one of the following:
1. at least 24 years old as of January 1 or
2. married or
3. a graduate or professional student or
4. a veteran of the U.S. Armed Forces or
5. an orphan or ward of the court (or a past ward of the court until age 18) or
6. have a legal dependent other than a spouse.
All other students are considered dependent. For institutional aid purposes Duke University believes that the family has the primary responsibility for supporting their student's cost of attendance. The University views its role as supplementing those resources that the family can reasonably be expected to provide. Although we are willing to consider extenuating circumstances a parent refusing to provide support is NOT sufficient for a student to be declared independent for institutional aid purposes.
Disbursement
The process by which financial aid funds are made available to students for use in meeting educational and related living expenses.
Eligibility Requirements
The basic criteria established by the federal government which students must meet in order to qualify for federal financial aid. To be eligible for financial aid students must meet the following criteria:
1. have financial need excluding some loan programs
2. have a high school diploma or a General Education Development (GED) Certificate, pass a test approved by the US Department of Education, or meet other standards established by the student's home state
3. be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program
4. be a United States citizen or eligible noncitizen
5. have a valid Social Security number
6. make satisfactory academic progress
7. sign a statement of educational purpose and a certification statement on overpayment and default both found on the Free Application for Federal Student Aid
8. register with the Selective Service, if required
Entrance Interviews for Federal Loan Programs
An on-line loan counseling session that all borrowers are required to complete before receiving their first federal loan disbursement.
Exit Interviews for Federal Loan Programs
On-line counseling sessions that borrowers are required to complete prior to leaving school.
Exceptional Financial Need
An eligibility criterion in the SEOG programs. Exceptional financial need for SEOG is defined as in statute as the lowest expected family contributions at an institution.
Expected Family Contribution (EFC)
The amount as determined by United States Department of Education that a student and her/his parents can reasonably be expected to contribute toward college costs. The EFC is computed according to federal guidelines. A figure used to determine financial aid eligibility. The EFC is determined based upon a formula developed by the United States Congress. The EFC is printed on the front of the Student Aid Report. See also the EFC
Federal Family Education Loan Program (FFELP)
Education loans provided by private lenders and guaranteed by the federal government. Subsidized and unsubsidized Stafford loans and PLUS loans are included.
Federal Methodology (FM)
The formulas used to determine a student's eligibility for federal Title IV funds. The formulas take into account income, some assets, expenses, family size and other factors.
Federal Nursing Student Loan
The NSL is a campus-based loan program; and therefore, the funds are limited. The funds are awarded on a first-come-first-served basis. Therefore once the funds have been exhausted, all eligible students may not be awarded NSL funds.
Federal Pell Grant Program
The Federal Pell Grants are available to students who have demonstrated significant financial need as determined by the Free Application for Federal Student Aid. A grant does not have to be repaid.
Federal Perkins Loan Program
Perkins loans are generally available to students who have demonstrated financial need, as determined by the Free Application for Federal Student Aid. The federal government will pay the interest on this loan as long the student is enrolled at least halftime. The Perkins Loan has a fixed interest rate of 5 percent. Repayment begins nine months after the student graduates or falls below half-time status. For more information, see the page on Perkins Loans in the Loans section of our site.
Federal PLUS Loans
Loans for parents of undergraduate students, widely available from lenders who participate in FFELP. Parents may borrow up to the total costs of education minus any student aid awarded (per child). The interest rate is variable, based on the 52-week Treasury bill rate plus 3.1 percent, and is capped at 9 percent. Loans are made without regard to financial need, but borrowers must demonstrate positive credit history. For more information, see the PLUS application process in the Loans section of our site.
Federal Scholarship for Disadvantaged Students (SDS)
The Federal Scholarship for Disadvantaged Students is a federal campus-based grant program. Because the funding is limited and awarded on a first-come-first-served basis, all eligible students may not be awarded SDS.
To be eligible for the grant, a student must meet the following requirements:
1. is a Untied States Citizen or a Permanent Resident and
2. is enrolled full-time in a degree or certification program within the Schools of Medicine, Dentistry, Nursing, or Health Related Professions and
3. has come from economically or environmentally disadvantaged backgrounds and
4. has submitted the school eligibility form before the deadline date (contact school for deadline date) and
5. has filed the FAFSA before March 31 and
6. has submitted parental information and an application to the Office of Student Financial Aid and
7. has demonstrated need.
The awarded amount varies according to the following:
1. student’s program and
2. student’s EFC and
3. the number of eligible students in said program.
Federal Stafford Loans
1. FEDERAL SUBSIDIZED STAFFORD LOAN
TERMS OF THE LOAN
Borrower may make no payments during in-school and grace periods.
Borrower is not responsible for interest accrued during in-school and grace periods.
A grace period of 6 months follows graduation or less than half-time enrollment.
The interest rate is set by the federal government and is a fixed rate of 6.8%.
An origination fee of 0 to 3% may be assessed by the lender and deducted from the loan proceeds at the time of disbursement.
A default fee of 1% is assessed by the federal government, many of our preferred-lender partners have joined with our guarantor to pay this fee.
Repayment begins after grace period with minimum monthly payments of $50 and a maximum repayment period of 10 years.
There is no penalty for prepayment.
ELIGIBILITY FOR THE LOAN
A student must meet the following requirements:
1. is a Untied States Citizen or a Permanent Resident and
2. is enrolled at least half-time in a degree or certificate program and
3. has filed the FAFSA and has received a valid Student Aid Report and
4. has demonstrate need as determined by the United States Department of Education and has eligibility for need-based aid within the student’s package.
AMOUNT OF THE LOAN
See Stafford Loan Limits Table
2. FEDERAL UNSUBSIDIZED STAFFORD LOAN
TERMS OF THE LOAN
-Borrower may make no payments during in-school and grace periods.
-Borrower is responsible for all interest accrued from date of disbursement until loan is paid in full.
-Unpaid interest during in-school and grace periods is capitalized at repayment.
-A grace period of 6 months follows graduation or less than half-time enrollment.
-The interest rate is set by the federal government and is a fixed rate of 6.8%.
-An origination fee of 0 to 3% may be assessed by the lender and deducted from the loan proceeds at the time of disbursement.
-A default fee of 1% is assessed by the federal government, but many of our preferred-lender partners have joined with our guarantor to pay this fee.
-Repayment begins after grace period with minimum monthly payments of $50 and a maximum repayment period of 10 years.
-There is no penalty for prepayment.
ELIGIBILITY FOR THE LOAN
A student must meet the following requirements:
1. is a Untied States Citizen or a Permanent Resident and
2. is enrolled at least half-time in a degree or certificate program and
3. has filed the FAFSA and has received a valid Student Aid Report.
AMOUNT OF THE LOAN
See Stafford Loan Limits Table
STAFFORD LOAN LIMITS TABLE
Federal Supplemental Educational Opportunity Grant (SEOG) Program
SEOG grants, a campus-based federal program, are available to undergraduate students who demonstrate exceptional need, according to the results of the Free Application for Federal Student Aid. Because the funding is limited and awarded on a first-come-first-served basis, all eligible students may not be awarded SEOG. The awarded amount does not exceed $1,000.00 per academic year.
Federal Work-Study Program
Federal work-study, a federal campus-based program that is need-based, allows a student to earn money by working a part-time job on campus. Because the funding is limited and awarded on a first-come-first-served basis, all eligible students may not be awarded FWS. A student may not work more than 20 hours per week while enrolled. A student may not work using the Federal Work Study Program when the student is not enrolled in school. Academic demands at UMC are such that Deans and Department Heads of certain programs prohibit students from working while enrolled. Therefore, Federal Work Study is awarded only upon student request and eligibility, availability of funds, and department approval. It is also the student’s responsibility to locate employment when eligible and approved.
Fellowship
A grant or money for postgraduate study which may require the recipient to teach or conduct research. See also the Graduate Fellowship page.
Financial Aid Notification
A notification that contains an offer of financial or in-kind assistance to a student attending college. This award notification may contain an offer of financial aid of any of the following types of aid:
Loan
Grant
Scholarship
Student Employment
Financial Aid Package
A financial aid award to a student usually comprised of a combination of forms of financial aid (loans, grants, scholarships, and employment).
Financial Need
The difference between what it costs to attend a particular college and the amount it has been determined that a student and her/his family can afford to pay toward those expenses (EFC). The amount that an applicant can be expected to contribute is measured according to standardized formulas. This standardized formula is the federal methodology.
Free Application for Federal Student Aid (FAFSA)
A form used to apply for all Federal Title IV student aid programs, including Pell Grants, Stafford Loans and campus-based programs (SEOG, work-study, and Perkins Loans). The FAFSA, which is collected, distributed and processed by the United States Department of Education, gathers the information required to determine need and eligibility according to the federal methodology.
It is available online format at www.fafsa.ed.gov.
Grace Period
A specified time period after a student leaves school or drops below half-time status during which he or she is not required to make payments on student-loan principal or interest. The grace period is typically six to nine months, depending on the type of loan.
Graduated Payments
A flexible rescheduling of loan payments that allows the borrower to make payments of different amounts (available through consolidation).
Grant
A grant is a form of financial aid which does not have to be repaid.
Guarantee Fee
A premium deducted from the proceeds of a Stafford Loan prior to disbursement and paid to the guarantor is a guarantee fee; it also is as an insurance fee.
Institutional Student Information Report (ISIR)
An electronic record sent by the Department of Education to the school of choice as a result of completing the Free Application for Student Financial Aid (FAFSA). (also referred to as a SAR).
I-9 Form
Employment form required by the Immigration and Naturalization Service. Students seeking a FWS job or temporary service job will be asked to complete an I-9 form prior to beginning employment.
Independent Student
For federal student aid purposes, students who meet at least one of the following criteria are considered independent students:
1. at least 24 years old as of January 1 or
2. married or
3. a graduate or professional student or
4. a veteran of the U.S. Armed Forces or
5. an orphan or ward of the court (or a past ward of the court until age 18) or
6. have a legal dependent other than a spouse.
Interest rate
The interest rate is the cost that is charged by a lender to a borrower for the use of the lender’s money. Usually, an interest rate is expressed as an annual percentage.
Institutional Loans
These loans have been provided by various gifts, are governed by the donor’s memorandum of agreement, and are administered by the University of Mississippi Medical Center.
Leveraging Education Assistance Partnership (Leap)
TERMS OF THE GRANT
LEAP is a federal state-block grant program. Because the funding is limited and awarded on a first-come-first-served basis, all eligible students may not be awarded LEAP.
ELIGIBILITY FOR THE GRANT
A student must meet the following requirements:
1. is a Untied States Citizen or a Permanent Resident and
2. is enrolled at least half-time in an undergraduate degree or certificate program and
3. has not received a bachelor’s degree and
4. has filed the FAFSA and has received a valid Student Aid Report and
5. has demonstrate need as determined by the United States Department of Education and has eligibility for need-based aid within the student’s package.
Lender
A financial institution, such as a bank, a state agency,, a savings and loan association, a credit union, or a qualified program (e.g., the College Board's College Credit Program) that makes FFELP and/or private loans.
Loan
An award made to a student with a formal agreement for repayment the funds plus interest.
Loan Repayment Options
Special repayment features offered at the discretion of the lender and other holder of student loans. Some are designed to reward timely payment; other programs are designed to make payment both more convenient and less expensive.
Merit-Based Aid
Financial aid that is awarded based on a student's academic merit or athletic merit or artistic merit or some other criteria and does not depend on financial need. Merit-based awards may look at a student's grades, test scores, special talents, or extracurricular activities to determine eligibility.
Military Scholarships
Reserve Office Training Corps (ROTC) scholarships from the U.S. Army, U.S. Navy, and U.S. Air Force often cover tuition, fees, books and supplies, and pay a subsistence allowance
Need Analysis
The process that determines a student's demonstrated financial need by analyzing the information provided by the dependent student and his/her parents or and independent student and if married his/her spouse on the student’s FAFSA. All students must file a FAFSA (Free Application for Federal Aid) to apply for need-based federal financial aid programs.
Financial Need = Cost of Attendance – Expected Family Contribution
Need Based Financial Aid
Financial need is Cost of Attendance minus Expected Family Contribution, as determined by the United States Department of Education. The student is required to complete the Free Application for Federal Student Aid. Need-based aid is that aid which is awarded based on financial need and may be in the form of grants, loans, or the federal work-study program.
Non-Need Based Financial Aid
Financial aid that does not require financial need as a criterion for financial aid eligibility. Examples of non-need based financial aid include the Federal Stafford Unsubsidized Loan or the PLUS.
Origination Fee
A fee charged by the federal government and deducted from the proceeds of a loan before disbursement. This fee partially offsets the administrative costs of the Federal Family Educational Loan Program.
Other Aid
Any outside scholarships (high school, community, etc.), grants, fee scholarships, veteran's education benefits, Bureau of Vocational Rehabilitation benefits, Job Training & Partnership Act (JTPA), or other aid sources that a student expects to receive during any given award year. Students must report all such awards to the Office of Student Financial Aid. Failure to report all outside aid is in violation of federal regulations and is subject to a fine not to exceed $20,000 and/or a prison-term not to exceed five years.
Parent Contribution (PC)
The amount that a dependent student's parents can contribute toward the student’s educational expenses as determined by the United States Department of Education. See Expected Family Contribution for additional information.
Pell Grant
See Federal Pell Grant
Principal
The original amount borrowed. Origination and guaranty fees are deducted from this amount before disbursement, and interest is computed as a percentage of principal. For example, if a student borrows $2,500 a year for four years of college, the principal would be $10,000. The borrower pays interest on the outstanding (or remaining) principal each month until the entire loan is paid off.
Professional Judgment
While the method for determining a student's need for federal student aid is defined by federal law, the law does allow the financial aid administrator the opportunity to use his/her professional judgment in some limited circumstances with regard to guidelines as set forth by the United States Department of Education.
Promissory Note
A legal document that the borrower signs to receive funds in the form of a loan which the borrower promises to repay with interest in a specified manner such as monthly installments. The promissory note for a student loan also will include any information about the grace period, deferment provisions, cancellation provisions, and the student's rights and responsibilities with respect to the loan. Borrowers should retain copies of all promissory notes until the loans are fully paid.
Repayment Schedule
Description of the borrower's manner of payment, such as monthly, the interest rate of the loan, the total repayment obligation, the due dates of said payments, and the length of time for repaying the loan.
Renewal Free Application for Federal Student Aid (FAFSA)
The renewal FAFSA contains information from the previous year's FAFSA application thus allowing a student to update this information on the student’s new FAFSA for the upcoming academic year. See FAFSA for additional information.
Selective Service Registration
Every male student that is at least 18 years old and was born after December 31, 1959, must register with Selective Service in order to receive federal student aid.
School Code
The number assigned to a school by the United States Department of Education for Title IV aid. UMC’s school code is 004688.
Student's contribution (SC)
The amount that a student can contribute toward his or her own educational expenses as determined by the United States Department of Education. See Estimated Family Contribution for additional information.
Subsidized Loan
A student is not responsible for the payment of interest during an in-school or grace status for this loan. The federal government is responsible for the interest on the Subsidized Stafford Student Loan while the student is in school, during the grace period, and during a deferment period. Other subsidized student loans such as the Federal Campus-Based Student Loans or UMC Institutional Student Loans do not accrue interest the student is in school, during the grace period, and during a deferment period.
Satisfactory Academic Progress
SAP stands for Satisfactory Academic Progress. In order to maintain eligibility for financial aid, all recipients of federal, state, and/or institutional aid must meet SAP requirements. Federal regulations governing SAP stipulate that financial aid recipients must maintain both the minimum grade point average as set by his/her school and the financial aid office as well as successfully complete the required number of classes each term to graduate within the time frame allocated by their school.
Scholarship
A form of financial assistance which does not require repayment or employment and is made to the student based upon criteria established by the donor(s).
Student Aid Report (SAR)
A federal output document generated by the FAFSA processor and sent to the student. The SAR contains the family's financial information and other information as reported by the student on the FAFSA. The student's eligibility for financial aid is indicated by the EFC and is located in the upper right-hand corner of the first page of the SAR. The SAR also inform the student if the student has been selected for verification.
Service Scholarship
A service scholarship is a type of financial aid that upon graduation requires the student to fulfill a service requirement as stated in the terms of the scholarship’s contract. If the student is not graduated or chooses not to fulfill the service requirement, then the scholarship becomes a loan which must be repaid by the student as specified in the contract.
Truth-in-Lending Statement
The Truth-in-Lending Statement is a document that is provided to loan recipients that delineates the interest rate and other information relative to the loan the student has received. Although the statement is required by the Consumer Credit Act, the Title IV loan programs are exempt from compliance with Truth-in-Lending.
Unsubsidized Loan
The student is responsible for paying all interest on this loan and has the option to either pay the accruing interest monthly or allow the interest to capitalize (to be added to the principal) to be paid during repayment.
Verification
A procedure whereby the school audits the information the student reported on the financial aid application by requiring a copy of the tax returns filed by the student and parent(s) as well as other documentation. If there is an asterisk next to the Expected Family Contribution (EFC) on the Institutional Student Information Report (ISIR), then student is required to undergo federal verification.
Work-study
Please see Federal Work-Study Program