Financial Aid Glossary
A
AA
Associate of Arts degree that can be earned at most two-year colleges.
AAMC
Association of American Medical Colleges.
AAS
An Associate of Applied Science degree that can be earned at some two-year colleges.
ABA
American Bar Association.
Academic period
Measured term of enrollment (such as a semester, quarter, trimester, clock, or credit hour).
Academic year
Period schools use to measure a quantity of study. For example, a school's academic year may consist of a fall and spring semester during which a student must complete 24 semester hours. Academic years vary from school to school, and even from program to program at the same school.
Account
Loan or set of loans grouped together and identified by a unique 10-digit account ID.
Accrued interest
Interest that grows on the unpaid principal balance of a loan.
Achievement tests
Tests required by some colleges to measure student attainment in specific areas. They are now known as SAT Subject Tests and are available in English, mathematics, history and social studies, languages, and science.
ACT
Multiple-choice test to measure ability in English, mathematics, reading, and science. An optional writing test measures the ability to plan and write a short essay. College-bound students usually take this test during their junior or senior year of high school.
Actual interest rate
Annual interest rate charged by a lender on a loan, which may be equal to or less than the applicable, or statutory, interest rate on that loan.
ADC
Aid to Dependent Children. Financial help for children in low-income families.
Additional Unsubsidized Federal Stafford Loan
Additional amount of a student's eligibility for unsubsidized Stafford loans. This loan is available only to independent undergraduate students, graduate/professional students, and dependent undergraduate students whose parents are unable to obtain a Federal PLUS Loan.
Adjusted gross income (AGI)
All taxable income less IRS allowable adjustments to income. This figure is taken from an individual's federal tax form.
Administrative wage garnishment
The process by which a guarantor, under federal law, may take a portion of the wages of a borrower with a defaulted FFELP loan.
Adobe® Acrobat Reader
Software program developed by Adobe Systems, Inc. for viewing electronic Portable Document Format (PDF) files.
Advanced Placement Program
The College Board offers exams and courses so students can earn credit for college subjects studied in high school. Tests are scored on a scale from one to five, with five being the highest.
AFDC
Aid to Families with Dependent Children – financial help for parents and children in low-income families.
Aggregate loan limit
Amount of money you're allowed to borrow. The aggregate is the total of all your education loans.
Agreement
Written contract, agreement, or letter of understanding between the guarantor and another party that specifies each party's rights regarding participation in the guarantor's programs and/or use of the guarantor's services.
Aid package
Combination of financial aid (scholarships, grants, loans, and/or work-study) determined by the financial aid office of a college or university.
ALP
Alternative Loan Program.
Amortization
Process of repaying a loan over an extended period through regular installments of principal and interest.
Annual loan limit
Maximum Federal Stafford, Federal SLS, or Federal PLUS loan amount that a guarantor may guarantee for a borrower in an academic year.
Anticipated completion (graduation) date
Day a student is expected to complete an academic program.
Applicable interest rate
Maximum annual interest rate that a lender may charge on a loan. Sometimes referred to as the statutory interest rate.
Application
Combined form that contains the loan application and promissory note for a Federal Stafford or Federal PLUS loan.
Approved
Formal authorization of a request.
APR
Annual percentage rate – a loan's effective interest rate including all fees and other charges.
Aptitude
Readiness to become proficient in an activity, given the opportunity; it may refer to an individual's capacity or potential to learn a type of work.
ASVAB
Armed Services Vocational Aptitude Battery – test designed to measure aptitude in 10 career-related skills or activities and at a particular stage in life (usually between ages 16–24).
Automatic debit
Electronic deduction of funds from the borrower's checking or savings account to cover monthly education loan payments. Borrowers may receive a 0.25% interest rate reduction on eligible loans during active periods of repayment as long as payments are made on time.
Average daily balance (ADB)
Sum of unpaid principal outstanding on all qualifying loans at each actual interest rate for each day of the quarter, divided by the total number of days in the quarter.
Award letter
Official document from a college financial aid office listing all the financial aid they can give the student. The award letter includes information about the cost of attendance and terms and conditions for the financial aid.
Award year
The financial aid award year begins July 1 and ends June 30.
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B
BA or BS
BA stands for Bachelor of Arts; BS stands for Bachelor of Science. Both degrees can be earned at four-year colleges. The degree awarded depends on the courses taken.
Bankruptcy
People (and companies) are declared bankrupt when legally found to be unable to pay their debts and their property is distributed among creditors or otherwise administered to satisfy the interests of creditors. Generally, federal student loans cannot be discharged through bankruptcy.
Base Federal Stafford Loan amount
Base amount of a student's eligibility for a subsidized and/or unsubsidized federal Stafford loan(s). The base amount equals the loan limit applicable to a dependent undergraduate student.
Base year
Tax year before the academic year (award year) for which financial aid is requested. Financial information from this year is used to determine eligibility for financial aid.
Billed interest due amount
Amount of accrued interest due on an outstanding principal balance.
Borrower
Person who receives the loan.
Borrower-specific deferment
Refers to the federal requirement that eligibility for deferment be applied to all a borrower's loans, rather than to each separate loan. For example, a borrower who has used the maximum 24 months of internship deferment is not entitled to additional internship deferment.
Browser
Short for Web browser, a software application used to locate and display Web pages. The two most common browsers are Microsoft® Internet Explorer and Netscape Navigator.
Budget
Cost of attending a post-secondary institution for one academic year. The student's budget usually includes tuition, fees, room, board, books, supplies, travel, and personal expenses. Each institution develops its own student budget.
Bursar's office
Office that's responsible for the billing and collection of school charges.
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C
Campus-based aid
Financial aid programs administered by the school. The federal government provides the school with a fixed annual allocation that is awarded by the financial aid administrator to deserving students. The Perkins Loan Program, Supplemental Education Opportunity Grant (SEOG), and Federal Work-Study are examples of campus-based aid.
Cancel amount
Total cancelled on a loan. This figure represents the portion of the loan guarantee cancelled due to one of the following reasons: the school returned the funds after the student withdrew from school, the student did not need the funds, the original check was returned to the lender, the loan was repaid within 120 days of the original disbursement, or the lender's check was not cashed within 120 days. Disbursement cancellations eliminate the repayment obligation for that part of the loan.
Cancellation
Cancellation releases a borrower from the obligation to repay his or her loan. There are three cancellation periods in the loan life cycle: before disbursement, after disbursement but before repayment begins, and once repayment begins. Before disbursement, the borrower may cancel or withdraw the application by telling the lender that the loan is not wanted. After first disbursement and before repayment, the borrower has the right to return the loan proceeds in full within 120 days (after that the borrower owes fees and any accrued interest) and thereby cancel the loan. In this same cancellation period, the borrower may also effect a "partial" cancellation by returning individual (but not all) disbursements. After repayment begins, the borrower must meet certain requirements or conditions to be eligible for discharge from federal student loans. A loan cannot be discharged or cancelled because the borrower didn't complete the program of study (unless the borrower was unable to complete the program because the school closed), didn't like the school or the program, or didn't find work after completing the program.
Cancellation options
Conditions for federal loan cancellation or discharge are based on the loan program (e.g., FFELP, FDLP, Perkins). The total and permanent disability or death of a borrower are the only conditions that justify 100% cancellation of a loan in any of the programs. Being a full-time teacher (in designated studies or demographic areas), nurse or medical technician, VISTA or Peace Corps volunteer, or a member of the U.S. Armed Forces may qualify the borrower for 50%–100% discharge on Perkins loans only. Bankruptcy may be a valid condition for discharge. This may only occur if repaying the loans would cause the borrower or his or her family "undue hardship," however.
Capitalized interest
Unpaid interest added to the principal balance of a loan that increases the total outstanding balance due.
Career Training Loan
Sallie Mae loan program in which eligible borrowers can borrow up to $1,000 for technical or trade school, distance learning, or other continuing education programs.
Certification
The act of attesting that something is true or meets a certain standard. For example, the school completes its section of the application, thereby confirming the borrower's eligibility for the guarantee and, if applicable, interest benefits and special allowance. The borrower completes that section of an application or deferment form, thereby confirming that certain eligibility criteria have been met.
Check
Draft that is payable on demand and requires personal endorsement or other written approval of the borrower to be cashed.
Choice Rewards
Sallie Mae program that grants a 2% interest rate reduction on the borrower's remaining loan term when the borrower makes the first 48 payments on time and continues to make on-time monthly payments.
Citizen/eligible non-citizen
To be eligible for federal student aid, the borrower must be a:
- U.S. citizen;
- U.S. national (including natives of American Samoa or Swain's Island); or
- U.S. permanent resident (who has an I-151, I-551, or I-551C Alien Registration Receipt Card)
If not in one of the above categories, the borrower must have an Arrival-Departure Record (I-94) from the U.S. Citizenship and Immigration Services (CIS, formerly INS) showing one of the following designations: "Refugee," "Asylum Granted," "Indefinite Parole" and/or "Humanitarian Parole," or "Cuban-Haitian Entrant (Status Pending)."
If the borrower has only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464), he or she is not eligible for federal student aid.
If the borrower is in the U.S. on an F1 or F2 student visa only, or on a J1 or J2 exchange visitor visa only, or with a G series visa, then he or she is not eligible for federal student aid.
Claim
Application made to a guarantor for payment of an insured student loan for loss of payment due to borrower death, total and permanent disability, bankruptcy, default, or school closure.
Cohort default rate
Measurement of the percentage of a school's borrowers who enter repayment in a federal fiscal year and default on their loans before the end of the next federal fiscal year.
Collateral
Property of a borrower that's pledged by the borrower to protect a lender's interests. Collateral is the lender's security for loans made and may become property of the lender if the borrower fails to repay.
Collection
Activities and/or actions by lenders, guarantors, servicers, and collection agencies to obtain payment on unpaid loan principal and interest from a borrower after that borrower defaults on the loan.
Collection charges
Costs incurred by the lender or its agents in collecting overdue payments. These charges may include, but are not limited to, attorney's fees, court costs, and telegrams. They may not include routine costs associated with preparing letters or notices or making telephone calls to the borrower.
College Answer
Sallie Mae's free financial aid information service designed to help college-bound students and their families understand the paying-for-college process.
College Scholarship Service (CSS)
Division of the College Board that collects information used by colleges, universities, and scholarship programs to award private financial aid.
Comaker
One of two joint Federal PLUS or Federal Consolidation loan borrowers who are each held equally liable for the loan's repayment. Before the introduction of the Common Federal Stafford Loan Application/Promissory Note, some lenders required comakers on old subsidized Stafford loans.
Combined billing
Lenders (or servicers) generally offer a combined bill for all of a borrower's loans serviced by that lender/servicer so that the borrower only needs to make one payment per month.
Common Application/Common Form
Standardized application and promissory note developed by FFELP participants for applying for a FFELP loan. Common forms are periodically revised and approved to reflect major changes in FFELP regulations.
CommonLine Network
Framework for an open, standardized student loan delivery system that uses common file formats to transfer loan information.
Concierge Service
At your request, Sallie Mae's Concierge Service completes application forms for you and mails them for your signature.
Consolidation
Refinancing multiple education loans into one new loan with a new repayment term, monthly payments, and interest rate. (Contrast with Serialization)
Consummated loan
Loan for which a disbursement check has been negotiated or electronic funds transfer (EFT) or master check funds have been delivered to the borrower. For example, the loan is considered consummated if the borrower cashed the check (if an individual check) or the school applied the proceeds to the student's account (if included in a master check or EFT transmission). (See Unconsummated loan)
Cooperative Work-Study
Program in which the student alternates between full-time college study and full-time paid employment related to the student's area of study. Under this plan, a Bachelor's degree often takes five years to complete.
Cosigner
Person who also signs the promissory note and is responsible for the obligation if the borrower does not pay.
Cost of attendance (COA)
Price of attending a postsecondary institution for one academic year. The student's budget usually includes tuition, fees, room, board, supplies, transportation, and personal expenses.
Coupon book
Loan repayment tool. Generally, lenders (or servicers) provide coupon books (rather than monthly bills) to remind borrowers of their obligation to pay and to associate the borrower's payment with his or her account (once received via mail). Coupon books are mailed to the borrower and contain all the coupons required by the borrower until the next coupon book is printed and mailed or until the loan is paid in full.
Coverdell Education Savings Account (Coverdell ESA)
Tax-deferred savings and investment account for education expenses. (It was formerly called the Education IRA.) Parents can contribute $500 a year for each child or grandchild under age 18. Contributions aren't tax-deductible, but withdrawals are tax-free. The money must be used for college or graduate school tuition, room, board, or books before the student turns 30. At that point, the funds will be distributed to the beneficiary and will be subject to a 10% penalty and income taxes. Before then, however, the funds can be transferred to a new Coverdell ESA for another family member.
Credit
Money available to an individual from a bank or other lending institution. The borrower may use this sum to pay for products and services but must repay (usually over time) the lending institution for that usage.
Credit bureau
Agency that gathers and stores credit information on individuals. When a credit report is needed for a loan application, a credit bureau produces it for the lender based on the gathered data. The lender reports to credit bureaus how much someone borrowed and whether that person makes payments when due. This information is then available to potential employers and creditors.
Credit-ready
Credit-ready borrower is one who has no credit history or a credit history without an excessive number of delinquencies on consumer loans or revolving charge accounts; no prior education loan defaults; no derogatory credit items (such as charge offs, foreclosures, open judgments, bankruptcy, etc.).
Credit report
Report that contains details about individual borrowing habits and money-management skills. Lenders use credit reports to determine if they should approve a loan and to set the loan's terms (interest rate, fees, and length).
Credit scoring
Method, based on statistical analysis of applicant characteristics, lenders use to determine the applicant's qualification for credit.
Creditworthy
Describes an individual with no negative credit history by the criteria established by the lender.
Cumulative (aggregate) loan amount
Total disbursed to a borrower under a given loan type throughout the student's academic career. This amount must not exceed applicable total loan limits, which are based on the student's graduate/undergraduate status.
CUSIP
Committee on Uniform Securities Identification Procedures. CUSIP assigns a number that uniquely identifies issuers of securities and their financial instruments in a standard nine-character framework.
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D
Data release number
Information on the Student Aid Report (SAR) found on the upper right corner of the first page. This number is required to accurately identify the appropriate FAFSA data for release to additional schools.
Days past due
Number of days that have passed since an unsatisfied payment due date.
Debt-management counseling
Student counseling about debt and indebtedness. It is required before the student receives the first disbursement of the first loan, often referred to as entrance counseling, and when the student is scheduled to complete an academic program, commonly referred to as exit counseling.
Default
Failure to repay a student loan according to the agreed-upon terms of a promissory note. Default occurs at 270 days if the delinquency date is on or after Oct. 7, 1998 or at 180 days if the delinquency date is before Oct. 7, 1998. The school, lender, and state and federal governments may take legal action against the borrower to recover defaulted loan funds.
Deferment
Period when a borrower, who meets certain criteria, may suspend loan payments. For some loans, the federal government pays the interest during deferment. On others, the interest accrues and is capitalized, and the borrower is responsible for paying it.
Delinquency
Failure to make monthly loan payments when due. Delinquency begins with the first missed payment.
Demographics
Information about the vital data (age, sex, address) for a borrower.
Department, the
The United States Department of Education or an official or employee of the Department acting for the Department under a delegation of authority.
Dependent student
Undergraduate student whose parents provide more than half of his or her financial support. A dependent student is not married, is under 24 years old, has no legal dependents, is not an orphan or ward of the court, nor a veteran of the U.S. Armed Forces. Parents of a dependent student must submit parental information on the FAFSA for their son or daughter to be considered for financial aid.
Direct Loan
Student loan issued under the William D. Ford Federal Direct Student Loan (Direct Loan) Program. The program includes Federal Direct Stafford/Ford (Direct Subsidized), Federal Direct Unsubsidized Stafford/Ford (Direct Unsubsidized), Federal Direct PLUS (Direct PLUS), and Federal Direct Consolidation (Direct Consolidation) loans.
Disability
Medically determined condition that makes a person unable to work, earn money, or attend school. A borrower (or his or her spouse or dependent) is considered to be temporarily totally disabled if the condition is expected to be of a short and finite duration; a borrower is considered totally and permanently disabled if this condition is expected to continue for a long or indefinite period or to result in death.
Disbursement amount
Funds requested or approved for disbursement. It includes origination, guarantee, and supplemental fees that are applicable to the loan program.
Disbursement date
Date the funds were issued/sent to the school or escrow agent (if applicable).
Disbursement
Release of loan funds to the school for delivery to the borrower. Disbursements are usually made in equal multiple installments co-payable to the borrower and the school.
Discharge
Release of a borrower from the obligation to repay a loan. (See Cancellation)
Disclosure statement
Statement of the total cost and amount of a loan, including the interest rate and any additional finance charges.
Disposable income
Part of a borrower's compensation from an employer and other income from any source that remains after the deduction of any amounts required by law to be withheld or any child support or alimony payments that are made under a court order or legally enforceable written agreement. Amounts required by law to be withheld include, but are not limited to, federal and state taxes, Social Security contributions, and wage garnishment payments.
Distance learning
Distance learning is education that does not require the student to be in the same location as the instructor.
DocumentDirect
Service offered by Sallie Mae that lets schools and lenders securely access, view, and print student loan-related reports online.
Due diligence
If a borrower fails to make payments on a loan according to the terms of the promissory note, the federal government requires the lender, holder, or servicer of the loan to make frequent attempts to contact the borrower (via telephone and mail) to encourage him or her to repay the loan and make arrangements to resolve the delinquency.
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E
EAGLE
Effective Administration of Guaranteed Loans for Education. A Sallie Mae operating system that tracks all of the Federal Family Education Loan Program (FFELP) loan origination and guarantee activities administered on behalf of customers.
Early action
College admissions program with earlier deadlines and notification dates than the regular admissions process but does not require a binding commitment from the student if admission is offered. Under this program a student may apply to many schools. The student will not know what financial aid will be awarded before committing.
Early decision
Program with earlier deadlines and notification dates than the regular admissions process. Students who apply "early decision" commit to attending the school if admitted. (Early decision can be use for only one school.) The student will not know what financial aid will be awarded before committing.
Economic hardship
Situation when the borrower is working full time but is earning less than the minimum wage or the poverty line for a family of two. Economic hardship also exists if a borrower's monthly payments on federal education loans are equal to or greater than 20% of his or her total monthly gross income, as defined in FFELP regulations. Economic hardship can qualify you for deferment.
Education IRA
Now known as Coverdell Education Savings Account (Coverdell ESA), was a tax-deferred savings and investment account for education expenses.
Educational Testing Service (ETS)
Company that produces and administers the SAT and other education achievement tests.
Electronic Funds Transfer (EFT)
System for sending funds electronically, such as data transmission by computer rather than a paper-based transaction, such as a check.
Eligible borrower
Borrower or potential borrower who meets federal eligibility criteria for a Federal Stafford loan or, in the case of a parent borrower, a Federal PLUS loan.
ELO
Expanded Lending Option Schools using this system may offer high loan limits for Perkins loans.
Employment, full-time
Job with at least a 30-hour work week or a position expected to last at least three consecutive months.
Employment, part-time
Job with less than a 30-hour work week or a position expected to last less than three consecutive months.
Endorser
Signer of a promissory note who is secondarily liable for a loan obligation (i.e., who agrees to pay if the borrower does not). A lender may require a Federal PLUS borrower with adverse credit to obtain a credit-worthy endorser. (See Cosigner)
Endowment
Funds owned by an institution and invested to support its operation. Many educational institutions use part of their endowment income for financial aid.
Enrolled
Status of a student who has:
- completed the registration requirements (except for payment of tuition and fees) at the school he or she is attending or will attend;
- and has attended at least one day of classes at the school where he or she is enrolled;
- or has been admitted into a correspondence study program and has submitted one lesson, completed by the student after acceptance for enrollment and without help of a representative of the school.
Enrollment status
Indication of whether a student is full-time or part-time. Generally, a student must be enrolled at least half-time (and in some cases full-time) to qualify for financial aid.
Entitlement program
Awards funds to all qualified applicants. The Pell Grant is an example of such a program.
Entrance counseling
Students with federal education loans are required to receive counseling before their first loan disbursement, during which the borrower's rights and responsibilities and loan terms and conditions are reviewed. This session may be conducted online, by video, in person with the FAA or FAO, or in a group meeting.
Estimated financial assistance (EFA)
School's assessment of the amount of financial help that a student has been or will be awarded for the enrollment period for which a loan is sought. The EFA includes assistance from federal, state, institutional, scholarship, grant, financial need-based employment, or other sources.
Expected Family Contribution (EFC)
Amount a family is expected to provide toward a student's education. EFC is calculated based on family earnings, net assets, savings, size, and number in college.
ExportSS
Sallie Mae's loan administration and origination service for lenders.
Extended repayment plan
Repayment plan with a longer repayment period and lower monthly payments. The repayment period cannot exceed 25 years.
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F
FAO
Financial aid office(r).
FDLP or FDSLP
The William D. Ford Federal Direct Student Loan Program. Stafford and PLUS loans are available directly from the federal government rather than through commercial lenders. Selected colleges and universities participate in this program.
Federal interest subsidy
Assistance given by the federal government: They pay the interest on a student's loan while the student is in school and during the grace period before loan repayment begins.
Federal loan
Loan guaranteed by the U.S. government.
Federal methodology (FM)
Need analysis formula mandated by federal law to determine a family's Expected Family Contribution (EFC).
Federal Need Analysis Methodology (FM)
Formula used to calculate the Expected Family Contribution to determine the amount of Title IV assistance available to a borrower. It was introduced in 1993–94 as a replacement for the Congressional Methodology (CM) and Pell Grant Index (PGI).
Federal Processor
Organization that processes the information on the Free Application for Federal Student Aid (FAFSA) and computes eligibility for federal student aid.
Federal Register
Government publication published each weekday (except federal holidays) that lists regulations, regulatory amendments, notices, and proposed regulatory changes for all federal executive agencies.
Federal Student Aid Information Center (FSAIC)
Office associated with the Department of Education that is available to assist students and families when applying for financial aid from the federal government.
Federal Work-Study Program (FWS)
Program that provides part-time jobs to undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses.
Fellowship
Form of aid given to graduate students to help support their education. Some fellowships include tuition waivers or payments to universities in lieu of tuition. Most fellowships include a stipend to cover reasonable living expenses (i.e., just above the poverty line). Fellowships are a form of gift aid and do not have to be repaid.
FFELP
Federal Family Education Loan Program. The Federal Stafford, Federal PLUS, Federal SLS, and Federal Consolidation loan programs. The programs offer loans that are funded by private lenders, guaranteed by guarantors, and reinsured by the federal government.
Final demand letter
Correspondence from the lender to the borrower demanding full payment of a delinquent account. The letter is required as part of the due diligence procedures for collecting a loan that is seriously delinquent or ineligible. The final demand letter is sent on or after the 151st day of delinquency for loans payable in monthly installments. It must be sent at least 30 days before the lender files a default claim.
Financial aid
Monetary assistance in the form of scholarships, grants, work-study, and loans for education.
Financial aid administrator (FAA)
Staff member at an eligible school who administers financial aid programs.
Financial aid award letter
Letter detailing the total amount of financial aid (federal and nonfederal) such as scholarships, grants, loans, and/or work-study for which a student is eligible.
Financial aid officer (FAO)
College or university employee who is involved in the administration of financial aid. Also known as financial aid advisor, administrator, or counselor.
Financial aid package
Total financial aid (federal and nonfederal) such as scholarships, grants, loans, and/or work-study a student is eligible for.
Financial aid transcript (FAT)
Record of all federal aid received by students at each school attended.
Financial need
Difference between the cost of attendance at a school and the Expected Family Contribution (EFC).
529 plans
State tuition savings plans, named for the section of the IRS code authorizing them.
Fixed interest
On a fixed interest loan, the interest rate remains the same for the life of the loan.
Flex Repay
Sallie Mae repayment program that allows qualified borrowers to pay only interest (not principal) for up to four years followed by gradual increases in monthly payments during years five through nine. This lets borrowers make lower payments after leaving school.
Forbearance
Temporary delay or reduction of loan payments agreed to by the lender and borrower. Interest continues to accrue during forbearance.
Form 1098-E
Issued by a financial institution, a government unit (or any of its subsidiary agencies), educational institutions, or any person (or entity) that interest of $600 or more was paid to. It's used for filing taxes.
Free Application for Federal Student Aid (FAFSA)
Form a student must complete to apply for federal Title IV financial assistance, including FFELP loans. The student must include financial information about his or her household so the Expected Family Contribution (EFC) can be calculated.
Full-time student
Someone enrolled in an institution of higher education (other than a program of study by correspondence) who is carrying a full academic workload (as determined by the school under standards applicable to all students enrolled in that student's program). The student's workload may include any combination of courses, work, research, or special studies, whether for credit or not, that the school considers sufficient to classify him or her as a full-time student.
Funds
Any monies (including checks, drafts, or other instruments); any commitment to provide money; or any commitment of insurance that has been, or may be, provided under the guarantor's programs to a borrower enrolled at and attending a participating school or a borrower accepted for enrollment at a participating school.
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G
Garnish
To withhold money from someone's pay to resolve a debt.
GED
General Education Development. Certificate students receive in lieu of a diploma if they have passed a specific approved high school equivalency test.
Gift aid
Financial aid, such as grants and scholarships, that does not need to be repaid.
GPA
Grade point average. Average of a student's marks with the grades converted to a numerical scale: 4.0 is an A, 3.0 is a B, and 2.0 is a C.
Grace period
Specified time between the date a student graduates or drops below half-time status and the date loan repayment begins.
Grade level
Student's academic class level, as provided by a school official on the student's application and promissory note.
Graduate or professional student
Student who:
- is enrolled in a program or course above the baccalaureate level at an institution of higher education or enrolled in a program leading to a first professional degree;
- has completed the equivalent of at least three years of full-time study at an institution of higher education, either before entrance into the program or as part of the program itself; and
- is not receiving Title IV aid as an undergraduate student for the same enrollment period.
- Graduated repayment: A repayment schedule where the monthly payments are smaller at the start of the repayment period and become larger later on.
Grant
Financial aid award that does not have to be repaid. Grants are available through the federal government, state agencies, colleges, and universities.
Great Returns
Sallie Mae program that rewards Federal Stafford loan borrowers who pay on time with a credit to their account equivalent to the origination fees paid to the federal government in excess of $250. This program is not available for loans first disbursed on or after July 1, 2000.
Great Rewards
A Sallie Mae program that rewards Federal Stafford loan borrowers who pay on time with a 2% interest rate reduction on their eligible Stafford loans. To achieve eligibility for Great Rewards, borrowers must make the first 48 scheduled monthly payments on time and continue to make on-time payments.
Gross income
Income before taxes, deductions, and allowances have been subtracted.
Guarantee
Conditional legal obligation, as defined in an agreement between a guarantor and a lender, for the guarantor to reimburse the lender for some portion of a loan that is not repaid by the borrower due to default, death, disability, bankruptcy, borrower ineligibility, false certification of borrower eligibility, or school closure.
Guarantee amount
Principal amount insured by the guarantor as listed on the Notice of Loan guarantee (NOG or NOLG). The borrower signs a promissory note to repay this amount when the loan is initiated. The guarantee and origination fees are subtracted from the guarantee amount before the disbursement is sent to the school. Any cancellations or refunds are not subtracted from this amount.
Guarantee disclosure
Form used by the guarantor that serves as evidence that the loan named on the form is insured (guaranteed) against loss due to the borrower's default, death, disability, or bankruptcy, or the false certification of the loan's application, or the school closing while the borrower was enrolled. The form also provides relevant financial data, including the loan amount, interest rate, guarantee fee, origination fee (if applicable), and projected maturity date. Some lenders use their own forms; others use a guarantor's form.
Guarantee fee
Money charged by a guarantor for each loan it guarantees.
Guarantor or guarantee agency
State or private nonprofit agency that insures student loans for lenders and administer the student loan insurance program for the federal government.
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H
Half-time student
Someone who is enrolled in a participating school; is carrying an academic workload that is at least half the workload of a full-time student, as determined by the school; and is not a full-time student.
HEAL
Health Education Assistance Loan. Program provided federal insurance for education loans for eligible graduate students in schools of medicine, osteopathy, dentistry, veterinary medicine, optometry, podiatry, public health, pharmacy, chiropractic, or in health administration and clinical psychology programs. Please note that no new HEAL loans are being issued.
HEAL loan
Health Education Assistance Loan. Loan once made to graduate health professions students. No new HEAL loans are being issued.
HEAL Relief
Consolidation plan specifically for HEAL borrowers issued under the HEAL refinancing program. Please note that Sallie Mae is no longer issuing new HEAL Relief loans; the federal government ended its authorization of the HEAL Refinancing program on September 30, 2004.
HEAL Rewards
Sallie Mae program that rewards HEAL Relief (HEAL consolidation loan) borrowers who pay on time with an interest rate reduction on their loans.
Holder
Institution that owns a loan.
Home equity
Portion of a home's value that the homeowner owns outright. It is the difference between the fair market value of the home and the sum of the principal balances remaining on mortgage loans held by the owner for that home.
Home equity line of credit (HELOC)
Variation of the home equity loan that allows a homeowner to draw money against (i.e., write checks) the home's equity on an ongoing basis. Generally, a home equity line of credit features a variable interest rate, a specific period when money may be withdrawn, and a repayment period following any withdrawal. The credit also revolves on a home equity line of credit: as soon as principal is repaid, it may be borrowed again.
Home equity loan
Loan based on a homeowner's equity in the home. The home equity loan features a fixed rate, payment, and term.
Home-schooled student
Someone who is taught by a parent or a tutor instead of attending a traditional public or private institution.
Hope Credit
Federal tax credit (enacted in 1997) that is available for tuition and required fees less grants, scholarships, and other tax-free financial assistance to borrowers who meet the qualifications of the program. It may provide a family up to $1,500 in tax credit per year per dependent student for the first two years of post-secondary education. The student must be pursuing a degree at least half time to be eligible. (It's sometimes called the HOPE Scholarship.)
HPSL
Health Professions Student Loan. HPSLs are low-interest loans for graduate health profession students with exceptional financial need.
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Income-contingent repayment
Repayment schedule for some HEAL loans under which the monthly payment amount is adjusted annually, based on the total amount of the direct loans, the family size, and the adjusted gross income (AGI) reported on the most recently filed federal income tax return. For a married borrower who files a joint income tax return, the AGI includes the spouse's income.
Income
Money received from employment (salary, wages, and tips), profit from financial instruments (interest, dividends, and capital gains), or other sources (welfare payments, disability benefits, child support, unemployment benefits, Social Security payments, and pensions).
Income-sensitive repayment schedule
Payment option for some FFELP loans under which the borrower's monthly payment amount is adjusted annually, based solely on the borrower's expected total monthly gross income received from employment and other sources during the course of the repayment period.
Independent student
Student who's either married, 24 years old or older, enrolled in a graduate or professional education program, has legal dependents other than a spouse, is an orphan or ward of the court, or a veteran of the U.S. Armed Forces.
Information Review Form
Document associated with the Student Aid Report (SAR) on which the borrower can correct inaccurate information and return it to the Department of Education for update.
Ineligible borrower
Borrower or potential borrower who does not meet federal eligibility criteria for a Federal Stafford loan or, in the case of a parent borrower, a Federal PLUS loan.
In-school
Period when borrowers are enrolled at least half time.
In-school and in grace interest subsidy
Interest the federal government pays on certain loans while borrowers are in school, authorized deferment, or in grace.
Institutional loan
Loans specific to a college, university, or other postsecondary education institution. Eligibility and loan characteristics will vary among institutions.
Institutional methodology
Formula a college or university uses to determine financial need for allocation of the school's own financial aid funds.
Internet Self-Service (ISS)
Sallie Mae Servicing's online tool for secure account access and management by schools, lenders, and guarantors.
Insurance fee
Amount charged by guarantee agencies that is deducted from loan proceeds and used to insure against defaulted loans.
Interest
Fee charged to the borrower for use of the lender's money. Also, money paid to the account holder.
Interest-only payment
Payment that covers only accrued interest owed on a loan and none of the principal balance. Interest-only payments do not prohibit borrowers from making additional or larger payments at any time.
Interest rate
Percentage of a sum of money charged to the borrower for its use.
Interest rate, 8/10%
8/10% interest rate is 8% for the first four years, after which it is 10%.
Interest rate, fixed
Interest rate that remains the same for the life of the loan.
Interest rate, variable
Interest rate that is recalculated periodically, usually based on the Prime rate or the Treasury bill (T-bill) rate. For FFELP loans, this rate changes yearly on July 1.
Interest subsidy
Interest the federal government pays on certain loans while borrowers are in school, during authorized deferment, or during grace periods.
Interim period
Time when a Federal Stafford loan borrower is in the in-school or grace period. If the borrower returns to school before the grace period is over, he or she continues to qualify for in-school status and remains in the interim period.
International student
Someone who's not a U.S. citizen or resident who plans to attend or is attending a college, university, or other postsecondary educational institution in the U.S.
Internship
Part-time job during the academic year or the summer months in which a student receives supervised practical training in his or her field.
IRA
Individual Retirement Account. Tax-deferred savings and investment account meant to accumulate funds for retirement.
IRS offset
The U.S. Internal Revenue Service (IRS) will apply money from a borrower's income tax refund to a defaulted FFELP loan. The amount offset, less a processing fee, is sent to the Department of Education by the guarantor and is ultimately applied to the defaulted loan balance.
ISIR
Institutional Student Information Record. Electronic record of federal student aid application data (from the FAFSA) forwarded by the Department of Education to the schools to receive the data, as listed by the student.
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K
K-12 Family Education Loan
Loan available for parents or other creditworthy family members of children attending private K-12 schools.
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Last payment amount
Amount of the last payment Sallie Mae Servicing received from the borrower. The amount shown will reflect the amount enclosed with the last specific statement or payment coupon.
Last payment received date
Day the latest payment was processed by Sallie Mae Servicing.
Late fee
Fee that may be assessed if a scheduled payment is not made by the due date.
Laureate
Sallie Mae's Web-based loan delivery system that enables loan application and approval to be processed quickly.
LAWLOANS
Private loan for law students and law school graduates studying for the bar exam.
LEAP
Leveraging Educational Assistance Partnership (formerly the State Student Incentive Grant [SSIG]), a state-run financial aid program for its residents. States receive matching funds from the federal government to help pay for the program.
Leave of absence
Break in enrollment, not including semester or spring break(s), that is requested by the student and sanctioned by the school. The leave of absence may be no longer than 60 days, and the student may be granted only one leave of absence during a 12-month period.
Lender
Financial institution that provides funds to the borrower.
Lifetime Learning Credit
Federal tax credit (enacted in 1997) that is available for qualified tuition and related expenses to borrowers who meet certain qualifications. It may provide a family up to $1,000 in tax credit per year per tax return for an unlimited number of years. The student is not required to be pursuing a degree at least half time.
Loan
Financial source available to students and their parents through student loan programs with varying interest rates and repayment provisions to supplement the family's financial resources, scholarships, and grants.
Loan balance
Total unpaid amount of a loan. This sum includes outstanding principal, capitalized interest, accrued interest, late charges, and any miscellaneous fees (such as returned check fees).
Loan interviews
Required counseling sessions with a financial aid administrator (FAA) that federal student loan borrowers attend before receiving their first loan disbursement and again before leaving school. During these sessions, called entrance and exit interviews, the FAA reviews the loan's repayment terms and schedule with the student.
Loan number
Number assigned to each active loan. Loans are numbered in groups of 20. The group numbers are the value after the hyphen in the loan number. Example: Loan number two in group number one is displayed as 02-1.
Loan payoff calculator
Online feature that displays how much a borrower would save by paying off their loan immediately.
Loan period
Time of enrollment for which a loan application is certified.
Loan proceeds
Amount of loan funds that have been guaranteed.
Loan program
Type of loan a borrower can or did receive for post-secondary education. There are many different loan programs available to borrowers, each having specific application requirements. Loan programs are either government-backed (FFELP) or private and can be either subsidized or unsubsidized.
Loan repayment calculator
Online feature that generates a chart that compares Sallie Mae Servicing repayment options and creates SMART LOAN account repayment estimates.
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M
Manage Your Loans
Sallie Mae Servicing's online tool for secure account access and management by borrowers.
Mandatory administrative forbearance
Loan forgiveness that a lender is required to grant for periods when the borrower is involved in a local or national emergency or military mobilization or resides in a designated disaster area. A lender is also required to grant mandatory administrative forbearance for up to three years if the borrower's repayment period must be extended due to the effect of changes in the variable interest rate on standard or graduated repayment terms and for up to five years to accommodate income-sensitive repayment schedules.
Mandatory forbearance
Loan forgiveness that a lender is required to grant for medical or dental internships and residencies after the borrower's in-school deferment has expired, for service in AmeriCorps, for excess student loan debt burden, for participation in the student loan repayment programs as administered by the U.S. Department of Defense, and for non-medical or dental internships.
Master check
Single check issued from a lender to a school that includes loan disbursements for two or more borrowers; a non-electronic process for transferring funds that mirrors electronic funds transfer (EFT).
Master Promissory Note (MPN)
Contract the student signs when taking out a Stafford loan. The Master Promissory Note is used for the subsidized and unsubsidized Stafford loans the student may receive for the same enrollment period. If the student is attending a four-year or graduate school, the Master Promissory Note also covers subsidized and unsubsidized Stafford loans the student may receive for future enrollment periods.
MBA Loans
Private loans for graduate business students.
MEDEX
Private or alternative loan program that helps recent medical school graduates cover the costs of residency. This loan is available through Sallie Mae.
MEDLOANS
Private or alternative loan program for medical students sponsored by the Association of American Medical Colleges (AAMC). This loan is available through Sallie Mae.
Merit-based loans
Loans that use merit to determine eligibility, such as a specific accomplishment or talent as the determining factor, rather than financial need.
Multiple disbursements
Delivery of Federal Stafford, Federal PLUS, or Federal SLS loan funds at pre-designated times, usually in two or more installments of approximately equal increments.
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National credit bureau
Credit reporting agency with a service area encompassing more than one region of the country.
National of the United States
Citizen of the United States or, as defined in the Immigration and Nationality Act, a non-citizen who owes permanent allegiance to the United States.
National Service Trust
Nationwide community service program. Students who participate in this program before attending school may be able to use Trust funds for education expenses. If students participate after graduating, the funds may be used to repay their federal student loans. Eligible types of community service include education, human services, the environment, and public safety.
National Student Loan Clearinghouse
Organization that helps schools report enrollment updates. Schools who use this organization electronically transmit enrollment information to the Clearinghouse, which transmits the data to the relevant servicers.
Need
Difference between the cost of education (COE) and the expected family contribution (EFC) is the student's financial need. It is the gap between the cost of attending the school and the student's resources.
Need analysis
Technique used to determine a student's need for financial assistance for college expenses. The analysis determines the family's ability to contribute compared to the student's cost of attendance.
Need-based
Describes education funding that uses financial need as the determining factor. It is a means of determining eligibility.
Net income
Income after taxes, deductions, and allowances have been subtracted from gross income.
NetWizard
Sallie Mae Web-based loan delivery system that offers a choice of lenders and access for borrowers to check the status of education loan accounts online.
New borrower
Borrower who has no outstanding balance on a FFELP loan when they sign a promissory note for a FFELP loan.
NMSQT
National Merit Scholarship Qualifying Test.
Non-subsidized loan
Loan that's not eligible for federal interest benefits. The borrower is responsible for paying the interest on the outstanding principal balance of a non-subsidized loan throughout the life of the loan. During the in-school, grace, and deferment periods, these interest payments are normally made on a monthly or quarterly basis or are capitalized. Non-subsidized loans were guaranteed by some guarantors before the introduction of unsubsidized Federal Stafford Loans.
NSL
Nursing Student Loan.
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Online billing
Sallie Mae service that allows borrowers to view and pay their loans online and receive monthly payment reminders via email.
Open admission
When most or all students who apply to a college are admitted.
Origination
Process whereby the lender, or a servicing agent on behalf of the lender, handles the initial application processing and disbursement of loan proceeds.
Overaward
Amount of loan proceeds that, when added to other student financial assistance, exceeds the borrower's need.
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Parent Answer Service
Sallie Mae resource where parents can reach counselors at a toll-free number to ask questions and to get assistance with PLUS loan pre-approval.
Parent
Student's natural or adoptive mother or father.
Parent's contribution (PC)
Amount parents can be expected to provide each year to the cost of the student's education as determined by the Federal Methodology.
Past due amount
Sum that is delinquent on the loan.
Payoff amount
Sum required to pay a specific loan in full. This amount includes the loan principal, capitalized interest, borrower accrued interest, billed interest, any late charges, any returned check charges, any refinancing fees, and any collection costs. It is calculated by what the accrued interest will be 10 days from the date the payoff amount is requested. This allows time for the borrower to mail a check and not leave a small outstanding balance.
Payoff date
Date the loan payoff calculation is based on. The ending principal balance, interest, fees, etc. are combined to determine the final payment amount. This date is set 10 days from the date the payoff amount is requested. This allows time for the borrower to mail a check and not leave a small outstanding balance.
PDF
Portable Document Format. File format developed by Adobe Systems, Inc. that presents a document electronically as it would appear on paper.
Pell Grant program
Largest federal grant program. The school, based on federal guidelines, determines eligibility and award amounts.
Period of enrollment
Time for which aid is made available as determined by the school. A period of enrollment coincides with an academic term such as the academic year, semester, trimester, or quarter, and starts on the day classes begin.
Perkins Loan
Low interest (5%) loan for undergraduate and graduate students with exceptional financial need. The school is the lender, and the loan is made with government funds with a share contributed by the school. The loan is repaid to the school.
Permanent resident of the United States
Person who meets certain requirements of the U.S. Citizenship and Immigration Services (CIS). Valid documentation of permanent residency includes the following: I-551, I-151, I-181, I-94, or a passport stamped for I-551, "Temporary evidence of lawful admission for permanent residence."
PIN
Personal identification number. A code entered into computer and/or telephone systems to authenticate the user.
PLUS
Parent Loan for Undergraduate Students. Federally-insured loan for parents of dependent students.
Postsecondary
Refers to all programs for high school graduates, including programs at two- and four-year colleges and vocational and technical schools.
Poverty line amounts
Federal poverty measure issued each year by the Department of Health and Human Services (HHS). The guidelines are used to determine financial eligibility for certain federal programs and deferments.
Prepaid tuition plan
College savings plan that is guaranteed to rise in value at the same rate as college tuition.
Prepayment
Paying off all or part of a loan before it is due.
Prime rate
Prime interest rate is the rate charged by commercial financial institutions for short-term loans to corporations or individuals whose credit standing is high enough that little risk to the lender is involved in making the loan. This rate fluctuates based on economic conditions and may be different among financial institutions. The prime rate serves as a basis for the interest rates charged for other higher-risk loans.
Principal
Amount on which interest is capitalized.
Principal balance
Outstanding amount of the loan on which the lender charges interest. As the loan is repaid, a portion of each payment is used to satisfy interest that has accrued and the remainder of the payment is applied to the outstanding principal balance.
Privacy practices
Ways financial institutions use and share personal information about individuals who obtain financial products or services from them.
Private loans
Provide supplemental funding when other financial aid does not cover costs. Banks or other financial institutions and schools offer these loans (not sponsored by government agencies) to parents and students.
Professional judgment
Financial aid administrator's ability to make changes to a student's financial aid package based on extenuating circumstances.
PROFILE
CSS/Financial Aid PROFILETM. Customized financial aid application form required at certain colleges that collects additional financial information to determine eligibility for institutional aid.
Promissory Note
Contract between a borrower and a lender that includes all the terms and conditions under which the borrower promises to repay the loan.
Proportional proration
Proration based on a straight percentage of the credits the student plans to take and the number of credits in the school's academic year.
Proprietary school
Postsecondary schools that are private and legally permitted to make a profit. Most proprietary schools offer technical and vocational courses.
Proration
Reduction of the standard annual loan limit for an undergraduate student. Proration of the loan amount is required if the student's program, or the remainder of the student's program, is less than a full academic year long.
PSAT/NMSQT
Preliminary Scholastic Assessment Test/National Merit Scholarship Qualifying Test that helps prepare students for the SAT and is part of the qualifying criteria for the National Merit Scholarship program. Students usually take this test as high school sophomores or early in their junior years.
Public File Transfer Service
Online service where users can register to download or upload files that are specific to an institution.
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Reference
Individual who can be asked about another person's character, ability, or location. A lender generally will ask a borrower for the names, phone numbers, and addresses of at least three people to be used as references. If the lender can't contact the borrower, the lender will contact these people to try to find him or her.
Refund
Difference between the amount the borrower paid toward institutional charges (including financial aid and/or cash paid) and the amount the school can retain under the appropriate refund policy. This "unearned" amount of institutional charges must be returned to student financial aid (SFA) programs on behalf of a student who received SFA funds and who no longer attends school.
Refund amount
Sum of the refunds made to the lender for a loan. This amount is the unused portion of cashed disbursement checks returned to the lender or servicer, usually by the school. Refund amounts are applied as reductions to the principal balance. They are not applied as a past or future loan payment.
Rehabilitation (of defaulted loan)
Process by which a borrower may bring a FFELP loan out of default by adhering to specified repayment requirements.
Rehabilitation training program
Program by the Department of Veterans Affairs to provide rehabilitation training to disabled individuals or a program by a state agency responsible for vocational rehabilitation, drug or alcohol abuse treatment, or mental health services.
Reinstatement (of borrower Title IV eligibility)
Process by which a borrower with a defaulted FFELP loan may regain eligibility for Title IV aid by adhering to strict repayment requirements.
Reinstatement (of institutional eligibility)
Formal permission by the guarantor for a school, lender, or servicer to resume participation in the guarantor's programs after meeting specific conditions.
Release of proceeds
Delivery of loan funds by the school to the borrower. Release of proceeds is not disbursement of proceeds by the lender.
Renewal FAFSA
Free Application for Federal Student Aid (FAFSA) form that is used for subsequent-year applications after the initial FAFSA.
Repayment
Time when a borrower actively pays back an education loan.
Repayment period
Time when interest accrues on the borrower's loan and principal payments are required. For FFELP loans, the repayment period excludes any authorized deferment or forbearance; interest will continue to accrue during these periods for unsubsidized Federal Stafford, Federal SLS, and Federal PLUS loans, however.
Repayment schedule
Legal addendum to the Promissory Note stating the terms of loan repayment and fulfilling disclosure requirements. The repayment schedule is a plan that indicates the total principal and interest due, an installment amount, and the number of installments required to pay the loan in full. The repayment schedule also contains the interest rate for the loan(s) included on the schedule, the due date of the first and subsequent installments, and the frequency of installments.
Repayment start date
Date the repayment period begins. For Federal Stafford loans, repayment begins on the day following the last day of the grace period. For Federal PLUS and Federal SLS loans, repayment begins on the date the loan is fully disbursed.
Reserve Officers Training Corps (ROTC)
Program that combines military training with baccalaureate degree study, often with financial support and required commitment to future service in the Armed Services. Scholarship recipients participate in summer training while in college and have a service commitment after college.
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SAT
Scholastic Assessment Test. Exam used to measure a student's ability in math, verbal comprehension, and problem-solving. The SAT is usually taken in the junior and senior years of high school.
SAT Subject
Test Exams offered in five general areas of study: English, mathematics, science, history and social studies, and languages. Some colleges require students to take one or more Subject Tests when they apply for admission.
Satisfactory Academic Progress (SAP)
Eligibility requirement for borrowers, established by schools, to receive federal student aid.
Satisfactory repayment arrangement
Specified number of consecutive, on time, voluntary, reasonable, and affordable payments made directly to the guarantor by a borrower with a loan or loans in default. The borrower must make three such payments to become eligible to consolidate a defaulted loan, six such payments to regain eligibility for Title IV financial aid programs, and 12 such payments to rehabilitate a default.
Savings plan
Methodical approach to depositing money into an account (with a financial institution) with the goal of reaching a target amount that is to be used for a stated purpose. The account is preferably interest-bearing.
Scholarships
Funds used to pay for higher education that do not have to be repaid. Scholarships are often awarded on criteria such as academics, achievements, hobbies, talents, group affiliations, or career aspirations. They usually do not provide funds for living expenses.
School lender
School, other than a correspondence school, that has been approved as a lender under the FFELP and has entered into a contract of guarantee with the Department of Education or a similar agreement with a guarantor.
Secondary market
Organization, like Sallie Mae, that purchases loans from lenders, thus providing the lender with more money to make loans available to other students who need to borrow money.
Section 529 plans
State tuition savings plans, named for the section of the IRS code authorizing them.
Select Step
Sallie Mae repayment option in which two to four years of interest-only payments are followed by standard principal and interest payments for the remaining term.
Selective Service
Registration for a military draft. Males who are U.S. citizens, have reached the age of 18, and were born after 1959 must be registered with the Selective Service System to be eligible for federal financial aid.
Self-help aid
Financial aid in the form of loans or student employment.
SEOG
Supplemental Educational Opportunity Grant program. Federal grant funds made available through some schools to a limited number of undergraduate students with financial need.
Separation date
Date a student ceases to be enrolled at least half time at an eligible school.
Serialization
Combining several loans into one account so that the borrower only pays one monthly bill. Original loan terms do not change with serialization.
Servicer
Organization that administers and collects loan payments. May be either the loan holder or an agent acting on behalf of the holder.
Skip tracing
Diligent efforts to find a borrower's telephone number or address when such information is unknown.
SLMA
Student Loan Marketing Association, created by Congress in 1972 as a government-sponsored enterprise (GSE). Re-organized as a subsidiary of SLM Corp. (commonly known as Sallie Mae) as part of a privatization process that began in 1997, the SLMA was dissolved at the end of 2004 when SLM Corp. terminated all ties to the U.S. government.
SLS
Supplemental Loan for Students. This loan was available to students before July 1, 1994.
SMART LOAN Account
Sallie Mae's loan consolidation plan that allows borrowers to reduce their initial monthly payments by as much as 40%.
SMART Rewards
Sallie Mae's program to reward SMART LOAN borrowers who pay on time with an interest rate reduction on their loans. This program is not available for applications received after February 7, 1999.
SSIG
State Student Incentive Grant. See LEAP.
SSN
Social Security number. The nine-digit number assigned by the Social Security Administration. The SSN is used for tracking the borrower's loan account(s), skip tracing, and reporting to the Department of Education. A borrower must have an SSN to apply for a FFELP loan.
Stafford Loans
Loans, subsidized (need-based) and unsubsidized (non-need-based), guaranteed by the federal government and available to students to fund education.
Standard repayment schedule
Repayment schedule under which the borrower pays the same amount for each installment throughout the entire repayment period or pays an amount that is adjusted to reflect annual changes in the loan's variable interest rate. The standard repayment schedule cannot exceed 10 years, excluding in-school, grace, deferment, or forbearance periods.
State
A U.S. state or commonwealth, the District of Columbia, Puerto Rico, American Samoa, Guam, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands.
State lender
Single state agency or private not-for-profit agency designated by the state that has been approved as a lender and that has entered into a contract of guarantee with the Department of Education or a similar agreement with a guarantor.
Statement of Educational Purpose
Legal document in which the student agrees to use financial aid for education expenses only.
Statutory interest rate
Maximum annual interest rate (under the Higher Education Act) that a lender may charge on a loan.
Student Loan Interest Statement
Form 1098-E issued by a financial institution, a government unit (or any of its subsidiary agencies), educational institutions, or any entity (or person) interest of $600 or more was paid to.
Subsidized loan
Loan eligible for interest benefits paid by the federal government. The federal government pays the interest that accrues on subsidized loans during in-school, grace, authorized deferment, and (if applicable) post-deferment grace periods if the loan meets certain eligibility requirements.
Subsidized Stafford Loan
Federal need-based loan. With the subsidized Stafford the government pays the interest while you're in school. You can borrow $2,625 your freshman year, $3,500 your sophomore year, and $5,500 each remaining year.
SUCCESS
Sallie Mae's online tool to advise borrowers on payment management, rights, and responsibilities; it guides them on choosing an appropriate repayment plan.
Supplemental Loan for Students (SLS)
Federal loan that was eliminated in 1994 with the creation of the unsubsidized Stafford Loan.
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Teacher Shortage Area
Federally designated grade level, academic, instructional, subject matter, discipline, or geographic area that has been classified as a shortage area as defined by the Department of Education.
TERI Loan
Alternative loan for students, parents, or other credit-worthy individuals issued by The Education Resource Institute.
Term
Length of time in which to repay a loan. The term is usually agreed to by the lender and borrower in the borrower's contract or promissory note. It also refers to language used in legal documents, such as the promissory note, that defines how a loan will be borrowed and repaid. It also refers to some post-secondary educational institutions' academic periods.
Title IV
Section of the Higher Education Act of 1965, as amended, that authorizes federal loan, work, and grant education financial assistance programs.
Total amount outstanding
Unpaid balance of the loan including late fees, outstanding principal balance, and interest.
Transcript
List of the courses that a student has taken at a school with the grades earned for each one. Transcripts are usually required for college applications.
TransportSS
Sallie Mae's system that allows lenders to perform loan origination, then transfer the loan to Sallie Mae for servicing and eventual purchase.
TrueCareers
Sallie Mae's recruitment resource designed to assist borrowers in advancing their careers.
Tuition
Money colleges charge for classroom and other instruction and use of some facilities such as libraries.
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U
Unconsummated loan
Loan proceeds that the school returned to the lender before the borrower cashed the check (if an individual check) or the school applied the proceeds to the student's account (if included in a master check or EFT transmission). This includes checks that may have been released by the school but remain uncashed 120 days following disbursement and EFT and master check transactions that have not been completed 120 days following disbursement.
Undergraduate student
Person seeking a degree at a college or university who has not earned a first bachelor's degree.
Unemployment benefits
Temporary and partial wage replacement to workers who have become unemployed through no fault of their own.
Unsubsidized loan
Non-need-based loan such as an unsubsidized Federal Stafford loan or a Federal PLUS loan. The borrower is responsible for paying the interest on an unsubsidized loan during in-school, grace, and deferment periods.
Unsubsidized Stafford Loan
Federal non-need-based loan, available to students who don't meet the federal need requirements for the Subsidized Federal Stafford Loan.
U.S. Department of Education (ED, DOE, USED, DE)
Government agency that administers federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loan, the FFELP, and the FDLP.
U.S. Department of Health and Human Services (DHHS, HHS)
Government agency that administers several federal health education loan programs, including HEAL, HPSL, and NSL.
UTMA
Uniform Transfer to Minors Act. This law offers the same advantages as the Uniform Gifts to Minors Act but allows the adult to control the custodial account for a longer period. The monies in a UTMA account can be invested in mutual funds, bank accounts, or stocks; the UTMA extends the definition of gifts to include real estate, paintings, royalties, and patents.
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V
VA
Veterans Administration.
Verbal request
Request that's made orally, as opposed to in writing.
Verification
School's procedure for checking the accuracy of information reported by the student on the FAFSA. Verification may include requesting a copy of tax returns from the student and, if applicable, the student's parents.
Verification worksheet
Form sent by the college to students who are selected for verification by the Department of Education's Central Processing System (CPS).
Veteran
For federal financial aid purposes, such as determining dependency status, a veteran is a former member of the U.S. Armed Forces who served on active duty and was discharged other than dishonorably.
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W
Wiredscholar
Sallie Mae's online tool that helped students and families prepare for entrance exams, evaluate and select the best college to attend, and apply for and finance the cost. It is now called College Answer.
Withdrawal date
Date the student withdraws, as determined by the school.
WhizKid
Sallie Mae software product that allows schools to electronically collect, verify, document, and transmit Federal Stafford and PLUS loan data for fast guarantee. In addition, WhizKid supports private loan processing. WhizKid can be adapted to a PC or local area network (LAN) environment at a school.
Work-study
Program, awarded by the college, through which students work part time to help fund their education.
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