| 24/7 Application Processing |
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Customer service that is offered seven days a week, twenty-four hours a day. EdFed offers this feature to our borrowers.
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| Academic Year |
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The amount of time, defined by a school, within which a student has to accomplish his or her academic work.
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| ACT |
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A standardized multiple-choice test that is given to high school students. Some colleges and universities require the ACT as an entrance exam. The ACT measures a student's academic aptitude in English, math, reading, and science.
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| Accrual Date |
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The time that a loan's interest begins to accrue.
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| Accured Interest |
Unpaid interest that collects on the principal balance of a loan is called accrued interest.
Some loans such as the Subsidized Stafford and Perkins Loans let the student defer repayment of principal and interest while still in school. If you are eligible for federal interest subsidy, the interest may be paid by the federal government during this period.
In case your loan does not qualify for the federal interest subsidy, or if your loan is in forbearance, the unpaid interest amount that accrues while you are not making payments will be added to your loan balance. To limit the growth of your loan balance, you can make some payments toward the accrued interest even when they are not required.
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| Additional Education Borrowing |
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Borrowing more than one loan. You may reconsolidate your previously-consolidated loans with EdFed if you have additional education borrowing.
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| Adjusted Available Income |
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The income that is left after taxes and basic living allowances has been deducted.
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| Advanced Placement |
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A high school program that allows students to take college classes while they are still in high school. At the end of the classes, students take an exam that allows them to receive college credits for their score on the exam.
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| Alternative Loan |
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Also known as a private loan, this is a loan that is given through private institutions that are not backed by the federal government. They offer relaxed terms, competitive rates, simplified procedures, and a prompt pre-approval credit decision. Credit checks are mandatory to the borrower of alternative/private student loans.
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| Amortization |
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Repayment of a loan in a series of installments over a period of time; for example, monthly payments of principal and interest for the term of the loan.
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| Annual Percentage Rate |
| Measures the total cost of interest that the borrower will pay on the loan each year. |
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| AP |
| Refer to "Advanced Placement" |
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| APR |
| Refer to "Annual Percentage Rate." |
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| Assets |
| Items owned by an individual that can have a cash value. This includes bonds, real estate, stocks, business equipment, etc. When a student or parent is filling out the Expected Family Contribution on the FAFSA, it asks that all assets be considered in the calculation. |
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| Asset Protection Allowance |
| A formula used by the U.S. Department of Education and financial aid offices to determine which assets of a student's parents should be excluded by them while calculating the Expected Family Contribution. |
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| Assistantship |
| Employment for college students which usually entails participating in departmental research assistance or student teaching. |
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| Associate Degree |
| A two-year college degree. |
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| Auto Debit |
| A program offered through EdFed that allows borrowers to make their payments by having them deducted automatically from checking or savings accounts each month. When borrowers take advantage of this benefit, they receive an immediate 0.25% interest rate reduction. |
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| Automated Debit Payment |
| Refer to "Auto Debit" |
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| Award Letter |
| Letters sent to students from colleges that inform the students as to the amount of financial aid that they have been awarded. |
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| Bachelors Degree |
| A four-year college degree. |
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| Bar Loan |
| Loan that provides funds to be used for expenses related to taking the bar exam. |
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| Base Rate |
| The interest rate prior to any borrower benefits or incentives. |
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| Borrower |
| The person who signed the promissory note and is legally obligated to repay the loan. |
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| Borrower Benefits |
These are benefits that lenders offer borrowers, generally as payment incentives, in order to reduce the borrower's interest rate and save his/her money.
A .25% rate reduction is currently offered by EdFed if you use auto-debit to make payments. The 1% rate is reduced even farther after 36 consecutive on-time full payments (principal and interest) are made.
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| Bursar's Office |
| An office at a college that is responsible for collections and billing issues. |
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| Campus-based Aid |
| Financial aid that is given to a student from their college, but is partially funded from government programs. The colleges determine which students will receive the aid from these programs. They include Perkins Loans, work-study, Pell Grants, and Supplemental Education Opportunity Grants (SEOG). |
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| Cancellation |
In terms of consolidation, cancellation terminates the consolidation process, keeping the borrower's multiple loans as they were.
In regards to loans, cancellation annuls the obligations of the borrower to repay a loan. This only happens in extreme situations.
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| Capitalization |
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When unpaid interest is added to the loan principal, it is called capitalization. In this case, the borrower pays interest on the loan principal as well as on the outstanding unpaid interest.
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| Citizenship |
Many loans require that you have U.S. Citizenship or Permanent Residency, before you may borrow. This includes being a:
- U.S. Citizen
- U.S. National
- U.S. Permanent Resident with an I-151, I-155, or a I-551C
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| COA |
| Refer to "Cost of Attendance" |
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| COE |
| Refer to "Cost of Education" |
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| Collective Bargaining |
| Negotiation between students and their colleges or lenders to determine the amount of financial aid that they will receive. |
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| College Financial Aid |
All grants, scholarships, loans, and work-study programs given to students to cover their tuition fees and living expenses for college are considered financial aid.
EdFed helps you to better understand the college financial aid process and offers you complete solutions to your college financial aid needs.
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| College Funding |
All monies distributed are to be used to help with college costs, including tuition, board and lodgings, books, transportation, and other expenses.
EdFed helps you in understanding the college funding process and offers you solutions that best suit your needs-whether you are student financing your own studies or a parent supporting your child's education.
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| College Loan |
All monies distributed are to be used to help with college costs, including tuition, board and lodgings, books, transportation, and other expenses.
EdFed gives you a complete solution to college loans. We give Federal Family Education Loans as well as a variety of private loans which cover any of the college financial needs that you may have - whether you are student financing your own studies or a parent supporting your child's education.
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| Combination Billing |
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This repayment plan combines all of your loans into one payment and a single statement each month. However, the terms of the loans, interest rates and payment installments do not change.
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| Commercial Lender |
| For-profit institutions such as banks, or credit unions that give out loans. |
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| Compound Interest |
| Refer to "Capitalization" |
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| Consolidation |
Merges multiple loans into a single loan, frequently with a lower monthly payment and a longer payback period.
With EdFed's federal loan consolidation program, you can effectively merge either all or some of your outstanding college loans into a single new loan, even if your present loans are held by more than one lender or are of different types.
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| Consolidation Loan |
| Refer to "Consolidation" |
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| Cosigner |
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A cosigner is a signer in addition to the principal borrower who is jointly responsible for the repayment of loan(s); usually necessary when additional security is needed to obtain a loan.
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| Cosigner Release |
| Allows cosigners to be released of his or her obligations to the loan. |
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| Cost of Education |
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Cost of Education is the net annual cost of attending a particular school. It includes tuition fees, books, boarding and lodging, food, transportation and personal expenses.
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| Cost of Attendance |
| The total cost associated with attending college. It includes tuition fees, books, room and board, supplies, transportation, and other personal expenses. A student's residency or marital status also helps to determine the Cost of Attendance. |
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| Credit Check |
| The report that looks at a potential borrower's credit history and determines his or her credit rating. |
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| Credit-Based |
| Implies that a loan lender takes into consideration a potential borrower's credit, prior to lending. Private loans and private consolidations are credit-based. |
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| Credit Rating |
| Measures the level of risk for lenders to lend money, using a borrower's previous loan histories, etc. A good credit rating indicates that a borrower is likely to repay the amount that he or she borrows. A poor credit rating shows that there is a higher level of risk associated with lending money to the borrower, due to the increased possibility that the borrower may default on their loan repayment. |
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| Credit Score |
| Refer to "Credit Rating" |
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| Credit Sensitive |
| Implies that a loan may require a credit check prior to lending to a potential borrower. |
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| CSS Profile |
| Also known as the College Scholarship Service this is an application that can be required by some private colleges and universities that helps to determine a student's eligibility for private financial aid. |
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| Current Balance |
| The amount that a borrower owes on his or her loans at a specific point of time. This includes principal and interest amounts. |
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| Current Lender |
| The existing institution that lends money to a borrower. |
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| Custodial Parent |
| When a student's parents are divorced or separated, the custodial parent is the one whom the student has lived with for the last 12 months. |
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| Debt Consolidation |
Also termed consolidation loan, means the replacement of multiple loans with a single loan which may carry a lower monthly installment and a longer payback period.
With our federal loan consolidation program, you can merge all or some of your outstanding loans into one, even if they are held by more than one lender, or are of different types.
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Debt Consolidation
Also termed as loan consolidation, it is the replacement of multiple loans with a single loan which may carry a lower monthly installment and a longer payback period.
With our federal loan consolidation program, you can merge all or some of your outstanding loans into one, even if they are held by more than one lender, or are of different types.
Default
Status for loans that are not repaid in accordance with the repayment terms on the promissory note.
Deferment
The postponement of loan payments for a given period of time. Deferment can be granted under any one of the following conditions:
- Enrollment in a higher program like a graduate or fellowship program
- Half-time study
- Inability to procure a full-time job
- Admission to an approved rehabilitation counseling program
- Any other financial hardships
Deferment Rate
Refers to the rate at which some loans are given while they are in deferment status.
Delinquency
A loan that is 30 to 60 days past due with no payments being made. This can result in default.
Dependency Status
For financial aid purposes, the status of a student who is dependent upon his or her parents for financial support.
Dependent
Refers to "Dependent Student"
Dependent Student
A student who, for federal financial aid purposes, is dependent upon his or her parents for support. He/she must provide parental information on the FAFSA.
Direct Lender
Refer to "William D. Ford Federal Direct Student Loan Program."
Direct Loans
Loans given through the William D. Ford Federal Direct Student Loan Program from The Department of Education. Refer "William D. Ford Federal Direct Student Loan Program."
Direct Loan Program
Refer to "William D. Ford Federal Direct Student Loan Program."
Disbursement
The payment of funds, in this case, to a school on behalf of a student to pay education expenses.
Disclosure Statement
A statement of the total cost of your loan, which includes the principal as well as the interest.
DOE
Refer to "William D. Ford Federal Direct Student Loan Program."
Education Financing
Includes all scholarships, grants, loans, and work-study programs offered to a student to cover his or her tuition fees as well as college living expenses.
Educational Loan
Used to meet the cost of college- tuition, boarding and lodging, transportation, and other expenses.
EFC
Refer to "Expected Family Contribution"
EFT
Refer to "Electronic Funds Transfer"
Electronic Funds Transfer
An automated electronic transfer of funds from the bank or the lender.
Eligible Non-Citizen
A U.S. Permanent Resident with an I-151, I-155, or I-551C. This is required for a borrower to borrow federal student loans.
Eligible Program
A field of study that leads to a degree or certificate and also meets the U.S. Department of Education's requirements.
Entrance Counseling
Mandatory counseling for students before receiving a student loan; covers how to manage educational expenses and understand loan responsibilities.
Enrollment Status
A student's status that shows whether a student attends school part-time, half-time or full-time. A student must have at least an enrollment status of half-time to be eligible for most financial aid. In order to be considered full-time, a student must carry a minimum of 12 credit hours. To be considered half-time, a student must carry a minimum of 6 credit hours.
E-sign
Refer to "E-signature"
E-signature
Also known as electronic signature, this is a binding contract that allows borrowers to complete an application online, rather than "wet signing" the physical application. EdFed offers this feature to our borrowers to help make the application process quick and simple.
Exit Counseling
Required counseling before graduating or leaving college; explains students' rights and responsibilities as a Direct Loan borrower.
Expected Family Contribution
The amount of money your family is expected to contribute to your college education for one year. It is not just your parent's contribution; you and your parents share the responsibility to paying for college.
Expected Graduation Date
The day that a borrower anticipates completing his or her schooling.
FAFSA
Refer to "Free Application for Federal Student Aid"
FFELP
Refer to "Federal Family Education Lending Program"
Federal Consolidation
Refer to "Federal Student Loan Consolidation"
Federal Consolidation Loan
Refer to "Federal Student Loan Consolidation"
Federal Family Education Lending Program
A program that allows private lenders to provide federal loans to students that are backed by the federal government. FFELP loans are the largest federal source of financial aid for college. It is made up of the following parts:
- Stafford Loan
Subsidized Stafford loans are available to students who demonstrate financial need. Unsubsidized Stafford loans are available to students regardless of their financial need.
- PLUS loans
Parents can borrow up to the total cost of their children's undergraduate education, less financial aid from other sources.
- Federal Consolidation Loans
Borrowers can consolidate their federal education loans into one loan with a single monthly payment and, depending on their outstanding loan balance, extend their repayment period.
Federal Financial Aid
All federal aid including: scholarships, grants, loans, and work-study, given to students to meet their cost of education and living expenses.
Federal Loan
Refer to "Federal Student Loan"
Federal Loan Consolidation
Refer to "Federal Student Loan Consolidation"
Federal Graduate PLUS Loan
Refer to "Graduate PLUS Loan"
Federal Grants
Refer to "Grants"
Federal Perkins Loan
Refer to "Perkins Loan."
Federal PLUS Loan
Refer to "PLUS Loan"
Federal Stafford Loan
Refer to "Stafford Loan"
Federal Student Aid
Student financial aid provided through the federal government. Federal student aid can be in the form of grants, loans, and work-study aid.
Federal Student Loan
Loans given to college students and their parents that are backed by the federal government. These are offered through the Federal Family Education Loan Program (FFELP).
Federal Student Loan Consolidation
Merges multiple federal student loans into one, easy-to-manage loan. With EdFed's federal loan consolidation program, you can effectively merge either all or some of your outstanding college loans into a single new loan, even if your present loans are held by more than one lender or are of different types.
Federal Work-Study
Refer to "Work-Study Program"
Financial Aid
A general term that includes all types of money, loans, and work-study programs offered to a student to help pay tuition costs and living expenses.
Financial Aid Administrator
Refer to Financial Aid Officer
Financial Aid Officer
Responsible for advising and counseling students regarding financial aid, and overseeing their financial aid packages.
Financial Aid Package
The total amount of financial aid that a student receives. This includes both federal and private funding.
Financial Need
The Cost of Attendance minus the Expected Family Contribution.
Fixed Interest Rate
An interest rate the borrower locks into at the origination of the loan which does not change during the term of the loan.
Forbearance
Allows borrowers to temporarily suspend payments or make a reduced payment amount, do to inability to make monthly payments. Interest continues to accrue during any period of forbearance.
Forgiveness Programs
Also known as student loan repayment programs, these programs relieve students and graduates from a portion or all of their student loans in exchange for working for a specified period of time. Forgiveness programs can be provided by the federal government, state government, military, and other various organizations and agencies across the country.
Free Application for Federal Student Aid
The official application students must use to apply for federal aid.
Full Deferment
A status in which the borrower is not obligated to pay either interest or principal amount. This status is available when the student is in an "in-school status."
Grace Period
A specified period of time after a student leaves school or drops below half-time status during which he or she is not required to make payments on either principle or interest. The grace period is typically six to nine months, depending on the type of loan.
Graduate PLUS Loan
A federal loan for graduate and professional students. This loan is another version of the PLUS loans for parents of undergraduate students. The Graduate PLUS Loan can pay a borrower the total COA, minus any other financial aid received. It is however, credit-based.
Graduate Program
University programs for students who have completed their undergraduate or bachelor's degrees.
Graduate Student
A student enrolled in a graduate program.
Graduated Repayment
Repayment terms calling for gradual increase in the payments on a closed-end obligation.
Grants
Monetary federal financial aid that does not require repayment. Grants are need-based financial aid.
Guarantee Fee
A fee paid to the guaranty agency to insure the loan. The amount of the fee is deducted from the dollar amount of the loan.
Guarantor
See "Guaranty Agency"
Guaranty Agency
An organization that insures student loans for banks and administers the student loan insurance program for the federal government.
Government Student Loan
Student loans provided through the federal government.
Half-Time Enrollment
A student's school enrollment status when the student is taking at least 6 credit hours. Most financial aid requires that a student be enrolled at least half time to qualify.
Home Equity
The principal on a home minus the current market value.
HOPE Tax Credit
A tax credit subtracted directly from the tax owed, instead of being subtracted from taxable income like a tax deduction. You cannot get a refund for the Hope Credit if you do not pay taxes.
Income Verification
Process to confirm one's annual wages. Some private student loans require income verification.
Income-Sensitive Repayment
Method of repayment in which the amount of monthly payments is based on the borrower's income. Payments must cover at least the interest, which accrues between payments.
In-School Interest Rate
The rate at which interest accrues when a student is in at least a half-time enrollment status. This rate is usually lower than when the loan is in its repayment status.
Independent Status
The status of a student who is: 24 years or older, is a graduate or professional student, is married, has legal documents, is an orphan or ward of the court; or is a veteran of the U.S. Armed Forces.
Interest
The price paid by a borrower for the use of a lender's money. The original amount lent is called the principal, and the percentage of the principal which must be paid annually as interest is called the interest rate.
Interest Period
The amount of time that interest accrues on a loan.
Interest Rate
The percentage of the principal which must be paid annually by a borrower for its use.
Interest Rate Reduction
When the overall interest rate of a loan or consolidation is lowered. EdFed offers interest rate reductions of up to 1.25%.
Independent Student
Someone who is one of the following: 24 years of age or older; an orphan; a ward of the court; a veteran of the U.S. Armed Forces; is married; has a child; is a graduate or professional student; or has serious family circumstances.
Interest-Only Payment
Payment that covers only accrued interest that is owed on a loan and none of the principal balance.
Internship
A work-related learning experience for individuals who wish to develop hands on-work experience in a certain occupational field.
Lender
An institution, such as banks and credit unions, that lends money.
LIBOR
Stands for London Interbank Offered Rate. This is a financial index that some private lenders use to determine the interest rates on their private loans.
Lifetime Learning Tax Credit
A federal income tax credit of as much as $1,000 per household annually; available to eligible taxpayers based on "out-of-pocket" tuition and fee expenditures, according to income eligibility guidelines.
Line of Credit
An additional amount of credit with a prearranged limit.
Loan
Lending money to a borrower for a specific amount of time, with the understanding that the borrower will repay the money lent.
Loan Counselor
Refer to "Loan Specialist"
Loan Holder
The agency or company that "owns" the loan the borrower is or will be repaying. It should be noted that because some lenders sell their loans to other companies, the initial lender and the loan holder may not be the same company.
Loan Principal
The initial amount of money borrowed, given by the lender as a loan.
Loan Specialist
A EdFed professional who helps borrowers consolidate their student loans into one easy-to-manage loan. When a borrower consolidates with EdFed, he or she will have a loan specialist assigned specifically to him or her. The loan specialist will then be the borrower's main point of contact when he or she has questions or concerns about his or her consolidation or loans.
Loan Type
The kind of loan that is borrowed. Because loans vary, borrowers may choose one of the several federal loans or perhaps a private loan.
Loan Verification Certificate
An official document that verifies all of the borrower's federal student loans with a specific lender/servicer.
London Interbank Offer Rate
Also, known as LIBOR, this is a financial index that some private lenders use to determine the interest rates on their private loans.
LVC
Refer to Loan Verification Certificate
Master Promissory Note
A document that a borrower must sign when borrowing a loan. This outlines the terms of the loan.
Masters Degree
A degree that is usually awarded to students who complete two additional years of schooling after they earn their Bachelor's degrees.
Marketing Company
A company that acts as a middle man by marketing loans to potential borrowers and then finds companies to sell loans to borrowers. EdFed is NOT a marketing company, but a true lender! This ensures that our borrowers' loans are handled by experts and not just marketers.
Maturity Date
The date in which a loan reaches its maximum payment period. At this time the loan must be paid in full.
Merit-based Aid
Financial aid that is awarded to students based on merit, such as good grades, leadership, community service, etc. Many scholarships are merit-based aid.
Minimum Monthly Payment
The least amount that can be paid each month to repay a borrower's loans. EdFed offers several flexible repayment options that can help borrowers who want to pay the minimum monthly payment on their loans.
Monthly Payment
The amount that a borrower must pay each month as repayment of his or her loan(s).
MPN
Refer to "Master Promissory Note"
National Student Loan Data System
A database through the U.S. Department of Education. NSLDS provides lenders with information on a borrower's loans that is received from schools, agencies, and other federal programs.
Need
The Cost of Attendance minus a student's Expected Family Contribution.
Need-Based Aid
Aid that is given to students based on their financial need.
Need-blind Admissions
A policy in which a school's admissions department does not take into consideration a student's inability to pay for their schooling when deciding on his or her acceptance into the school.
Needs Analysis
An amount determined by FAFSA that shows the amount that a student's family can afford to contribute towards the student's schooling.
NSLDS
Refer to "National Student Loan Data System."
Non-Citizen
A person who is not a United States citizen.
Non-portable Funding
Financial aid that is specific to a certain college or university. This means that it cannot be transferred to another college. The student will lose the aid if he or she chooses to transfer.
Online Application
A feature on EdFed that allows our potential borrowers to complete their entire application online with our convenient e-signature option.
Originator
The initial financial institution or company that begins a loan before reselling them.
Origination Fee
A fee that the borrower must pay to the lender to cover administrative fees on a loan.
Parental Contribution
The amount that a student's parent(s) are able to contribute to the student's schooling costs.
Payment Incentives
Presently, a 0.25% reduction in interest rates is offered by EdFed for using |
