Academic Year: Begins on summer term of the year to the end of the spring term of the following year.

Accrued Interest: Interest that accumulates on the unpaid principal balance of a loan

Award Year: is defined as "the period of time from July 1 of one year through June 30 of the following year."

Borrower: Person responsible for repaying a loan who has signed and agreed to the terms in the promissory note.

Campus-Based Aid: These are the Federal programs: Supplemental Educational Opportunity Grant (SEOG), Perkins Loan, and Federal Work-Study (FWS)

Capitalization: Adding unpaid interest to the loan principal. Capitalization increases the principal amount of the loan and its total cost.

Consolidation: Combining several loans into one by selling and transferring all loans to one lender.

Credit Agency: Maintains your credit history, which reflects how well you repay your student loans, credit cards, car loans or any other credit you may have.

Credit Report: A compilation of information about a consumer�s borrowing history, including payments on revolving credit accounts and outstanding balances on existing accounts; provides lenders with information that helps determine any risk involved in giving a potential borrower credit or a loan.

Default: Failure to repay a loan according to the terms of the promissory note. This failure must persist for 270 days.

Default fee: A one (1) percent fee charged on student loans; it may be deducted from the loan to help defray the cost of the student loan program.

Deferment: A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue for subsidized loans.

Delinquency: Failure to make an installment payment when it is due, or failure to meet other terms of the promissory note; may lead to default.

Dependent student: A student who does not meet any of the criteria for an independent student (see below).

Disbursement: A payment of loan money to the student or parent borrower.

Discharge: The release of a borrower from the obligation to repay his or her loan.

Direct Loan Program: The William D. Ford Federal Direct Loan Program provides loans to student and parent borrowers directly through the U.S. Department of Education rather than through a bank or other lender.

Direct Loan Servicing Center: The U.S. Department of Education's agent contracted to collect Direct Loans and handle deferments, repayment options, and consolidation.

Direct Subsidized Stafford Loan: A loan for students with financial need as determined by federal regulations. No interest is charged while you are in school at least half-time, during your grace period, and during deferment periods.

Direct Unsubsidized Stafford Loan: A student loan that is not based on financial need. Interest is charged during all periods.

Disclosure Statement: A statement that reflects the actual costs of the loan- including interest and financial charges- to a borrower.

Enrollment Period: Term that the student was enrolled

Expected Family Contribution (EFC): The EFC is a measure of the financial strength of a student's family. The U.S. Department of Education calculates a student's EFC based on information provided on the Free Application for Federal Student Aid (FAFSA).

Forbearance: A postponement of payment on a loan, typically if the borrower doesn't qualify for a deferment and is unable to make payments for a reason such as poor health. Interest continues to accrue during forbearance.

Grace period: A six-month period before the first payment must be made on a subsidized or unsubsidized Stafford loan. The grace period begins the day after the borrower ceases to be enrolled at least half time.

Guaranty Agency: The agency that insures against defaulted loans made under the Federal Family Education Loan (FFEL) Program.

Independent student: A student who is at least 24 years old, married, a graduate or professional student, a veteran or on active duty in the military for other than training or state purposes, an orphan, a ward of the court, or who has legal dependents other than a spouse.

Interest: An expense of borrowing money that is calculated as a percentage of the amount borrowed.

Lender: The actual source for borrowed money.

Loan: Money borrowed that must be repaid.

Loan Discharge/Forgiveness: If a borrower meets federally mandated requirements, their federal student loan may be discharged (cancelled), releasing the borrower from all obligations to repay the loan.

Loan fee: An expense of borrowing deducted proportionately from each loan disbursement.

Payment Period: For a program that uses standard academic terms is a semester, trimester, or quarter.

Prepayment: Payment on a loan by a borrower sooner than it is due under the terms of the promissory note.

Principal balance: The amount owed on a loan or loans at any given time. The principal balance may include capitalized interest.

Promissory note: A legally binding contract between a lender and a borrower. The promissory note contains the terms and conditions of the loan, including how and when the loan must be repaid.

Repayment period: The period during which a borrower is obligated to make payments on his or her loan(s).

Repayment schedule: A statement provided by the Direct Loan Servicing Center to the borrower that lists the amount borrowed, the amount of monthly payments, and the date payments are due.

Secondary Market: A private lending agency that buys loans from lenders.

Subsidized Interest: Interest paid by the federal government while the borrower is in school, or during grace and deferment periods.

Unsubsidized Interest: Interest paid by a borrower rather than the federal government.

Variable interest: Rate of interest on a loan that is tied to a stated index and changes annually every July 1 as the index changes.