|
Accrued interest is added to the borrower's outstanding
principal. Subsequent interest accrues on the new total principal
balance, which includes any capitalized interest. The borrower then
pays interest on the interest.
The act of attesting that something is true or meets a
certain standard. For example, the school certifies the borrower's
eligibility for a loan and, if applicable, interest benefits. The
borrower completes an application, promissory note, or deferment
form, thereby certifying that certain eligibility criteria have
been met.
Loan program for eligible borrowers under which their
obligations with respect to eligible student loans are paid off by
a new loan that combines the aggregate indebtedness of eligible
loans into a single debt.
The failure of a borrower (or endorser or co-maker, if any)
to make installment payments when due, or to meet other terms of
the promissory note or other written agreement(s) with the lender
under circumstances where the Department of Education or guarantor
of the loan reasonably concludes that the borrower no longer
intends to honor the borrower's obligation to repay a loan,
provided that this failure persists for the most recent consecutive
270-day period (for a loan repayable in monthly installments) or
the most recent 330-day period (for a loan repayable in less
frequent installments).
A period of time during repayment in which the borrower,
upon meeting certain conditions, is not required to make payments
of loan principal.
The form the student must complete to apply for federal
Title IV financial assistance, including Stafford loans. The
student must include financial information on the student's
household so that the expected family contribution can be
calculated.
An electronic signature that can be used by the borrower
when completing a FAFSA application online.
Loan program authorized by Title IV, part B of the Higher
Education Act of 1965, as amended, including the Federal Stafford,
Federal PLUS, Federal SLS, and Federal Consolidation Loan Programs.
These loan programs are funded by lenders, guaranteed by
guarantors, and reinsured by the federal government.
A period of time during which the borrower is permitted to
temporarily cease making payments or reduce the amount of the
payments. The borrower is liable for the interest that accrues on
the loan during the forbearance period. Some forbearances are
entitlements for eligible borrowers; others are granted at the
discretion of the lender.
The period that begins after a Stafford loan borrower ceases
to be enrolled at least half-time at an eligible school, ends the
day before the repayment period begins, and during which payments
of principal are not required. For a borrower with a Stafford loan
that has not yet entered repayment who also has an SLS loan, the
grace period for the SLS loan is the equivalent of the grace period
for the Stafford loan if the borrower requests grace on his or her
SLS loan(s).
A state or private nonprofit organization that has an
agreement with the U.S. Secretary of Education to administer a loan
guarantee program under the Higher Education Act.
The charge made to a borrower for use of a lender's money.
The 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 used to reduce the outstanding principal balance.
A legally binding agreement the borrower signs to obtain a
loan under the FFELP, in which the borrower promises to repay the
loan, with interest, in periodic installments. The agreement also
includes information about any grace period, deferment, or
cancellation provisions and the student's rights and
responsibilities with respect to the loan.
The period that commences after the expiration of the grace
period during which the borrower must make regular installment
payments of principal and interest. The maximum term of repayment
is 120 months.
With SLS and PLUS loans, repayment occurs immediately after
disbursement of the loan (exclusive of statutory deferments), since
they do not receive a grace period.
An online program designed to ask a series of questions for
the borrower to answer in order to determine the borrower's
eligibility for a deferment or forbearance.
The basic guaranteed student loan (previously known as GSL).
A loan eligible for interest benefits paid by the federal
government. The federal government pays the interest that accrues
on subsidized loans during the student's in-school, grace,
authorized deferment, and (if applicable) post-deferment grace
periods, if the loan meets certain eligibility requirements.
A 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, in addition to repayment periods.
|
