Financial aid glossary

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Academic Year - starts with the fall semester and ends with the spring semester.

Alternative (Credit-Based) Loans - loans that are made to you based on your creditworthiness.

Annual Percentage Rate (APR) - amount of interest (fee for borrowing money) associated with a loan. The APR can change or remain the same during the year and term of the loan. If the interest rate is variable, the rate can change; if it is fixed, the rate will not change.


Campus-Based Financial Aid Programs - sources of financial aid which include the Federal Supplemental Educational Opportunity Grant and Federal Work Study. These programs have limited funds and are awarded by UAF based on financial need.

Capitalization - the process of adding unpaid interest to the outstanding principal balance of a loan. This results in an increase in the outstanding principal balance of the loan and may cause an increase in the monthly payment amount.

Cost of Attendance - the anticipated cost of attending UAF for one academic year, including tuition, room and board, books and supplies, travel and personal expenses.

Consolidation Loan - a loan that allows borrowers to lower monthly payments by combining original federal loans into a single loan. You may only consolidate once. More information is available at www.loanconsolidation.ed.gov.

Co-signer - a person besides the borrower who signs a credit agreement and is legally obligated to repay the loan if the borrower does not make payments.


Default - failure to pay your loan according to the terms disclosed on your promissory note. You are in default on a FFEL program loan if your payments are more than 270 days past due or if you fail to comply with other terms of the loan.

Deferment - a period of time during repayment in which the borrower, after meeting certain criteria, is not required to make regular monthly payments.
Note:
Interest payments may or may not be postponed depending on the type of loan.

Delinquent - if a payment is not received by the due date, it is considered delinquent. Delinquencies greater than 30 days are generally reported to national credit bureaus.

Dependency Status - if you are considered a dependent student, the income and assets of both you and your parents will be considered when awarding financial aid.

Disbursement - delivery of financial aid funds either through a check or transfer of electronic funds to your school.

Disclosure Statement - a notification of the actual cost and terms of a loan, which includes the interest rate and any additional finance charges.


Electronic Funds Transfer (EFT) - your funds are electronically deposited directly to an account at UAF, which expedites disbursing funds to you.

Electronic Processing - the electronic exchange of information between UAF, state and federal processors, and the state guarantee agencies.

Enrollment - for undergraduate students full-time enrollment is 12 credit hours, half-time enrollment is 6 credit hours. For graduate students full-time enrollment is 9 credit hours, half-time enrollment is 5 credit hours.

Entrance/Exit Counseling - entrance counseling is required for first-time, first-year Stafford/Direct Loan borrowers and takes place before the receipt of funds. Exit counseling occurs when the borrower leaves or graduates from school.

Expected Family Contribution (EFC) - the amount you and/or your parents are expected to contribute toward your educational expenses as determined by a federally-mandated formula, which uses the information you provide on your FAFSA or renewal FAFSA.


Federal Family Education Loan Program (FFELP) - federally-funded educational loan programs, including Federal Subsidized and Unsubsidized Stafford Loans, and Federal Parent Loans for Undergraduate Students (PLUS).

Federal Work Study (FWS) - part-time employment based on financial need. It's a great way to lessen your loan debt and develop job skills. To qualify for Federal Work Study, indicate your interest on the FAFSA or contact the financial aid office. The amount of wages you are eligible to receive is determined by the cost of attendance less all of your other financial aid. You will need to apply for employment, and when you are hired, direct the hiring department to inform the Financial Aid Office.

Financial Aid Award Package - an offer of financial aid usually composed of a combination of aid programs which may include scholarships, grants, loans and/or work study.

Financial Need - the difference between your cost of attendance (budget), as established by UAF and your expected family contribution (EFC).

Forbearance - a temporary postponement of principal and interest payments during which the borrower may pay only the interest on the loan. If the borrower chooses not to pay the interest, it will be capitalized at the end of the loan period.

Free Application for Federal Student Aid (FAFSA) - the application used to establish financial need.


Guarantee Agency - an agency which acts as an intermediary for the federal government in providing guarantees to repay lenders if FFELP loan borrowers default.

Gift Aid - financial aid that does not have to be repaid or earned (e.g. grants and scholarships).

Grace Period - a period of time granted to loan borrowers during which no payment of principal is due. After you graduate, leave school or drop below halftime enrollment you enter a grace period. This grace period is usually six months (check with your lender). Each student is given one grace period by his/her lender.


HOPE Scholarship Tax Credit - this tax credit is available to those taxpayers who are paying education expenses for students enrolled in their first two years of college. The Hope Tax Credit is available for up to 100 percent of the first $1,000 of qualified tuition and related expenses (i.e. tuition and fees, but not room and board and books) and 50 percent of the second $1,000. The Hope Scholarship Tax Credit is for expenses paid after December 31. It will be reduced on a pro-rated basis for those who file a single tax return with incomes of $40,000--$50,000 and for those who file joint tax returns with incomes of $80,000--$100,000. (Single return tax filers with incomes of $50,000 and joint return tax filers with incomes of $100,000 and above will not be eligible for a deduction.) The Hope Scholarship Tax Credit is part of the Taxpayer Relief Act of 1997.


Interest - an amount charged for borrowing money calculated as a percentage of the principal loan amount.


Lifetime Learning Tax Credit - the lifetime learning tax credit is available to people beyond the first two years of undergraduate studies, graduate students or working U.S. citizens taking classes to improve or upgrade their job skills. It can be used for qualified tuition and related expenses (i.e. tuition and fees, but not room and board and books) paid by the taxpayers. The tax credit equals 20 percent of the first $5,000 of expenses paid by the taxpayer after June 30, 1998 through December 31, 2002 and 20 percent of the first $10,000 after January 1, 2003. The tax credits are reduced on a pro-rated basis for single return tax files with incomes of $40,000--$50,000 and for joint return tax filers with incomes of $80,000--$100,000. (Single return tax filers with incomes of $50,000 and joint return tax filers with incomes of $100,000 and above will not be eligible for a deduction.) The lifetime learning credit is part of the Taxpayer Relief Act of 1997.


Master Promissory Note (MPN) - binding legal document you must complete and sign when you apply for a student loan. It lists the conditions under which you're borrowing and the terms under which you agree to pay back the loan.

Multiple Disbursements - loan proceeds that are paid in more than one check or electronic transaction. For example, a portion of a loan may go toward the first semester of school and the balance for the second semester.


Need Analysis Formula - a federally-mandated formula used to objectively determine your Expected Family Contribution (EFC).

Need-based Aid - aid programs for which you must demonstrate financial need in order to qualify.


Origination Fee - a fee which is applied to Federal Family Education Loans which may be combined with an insurance premium. This fee is a percentage of the loan amount and is deducted from the amount approved before the lender disburses the loan.


Parent Loans for Undergraduate Students (PLUS) - loans under the FFEL program for parents of dependent undergraduate students. A credit check is required. The interest rate is low and repayment begins 60 days after disbursement.

Pell Grant - one of the largest sources of grants, Pell Grants are distributed by the Federal Government and are designed to help students with financial need pay for college.

Perkins Loan - fixed low interest (5 percent) loan through your school. You must demonstrate financial need. Current maximum/year for undergraduates is $4000.

PIN - Personal Identification Number

Principal - the dollar amount of the loan that must be repaid upon maturity, and upon which interest will be charged.

Private Aid - financial aid that comes from non-government sources.


Refund Check - a check you receive through the mail for any funds left in your student account after aid has been disbursed and fees paid.

Renewal FAFSA - a renewal FAFSA will be generated for most students who completed a FAFSA this year. It is a simpler method of applying for federal financial aid. Much of the required information will be preprinted for you. All you have to do is verify the preprinted information and make any necessary corrections. If you receive a renewal FAFSA, you may complete it instead of a FAFSA.

Repayment Period - the amount of time during which you repay the money borrowed plus interest.


Satisfactory Academic Progress - in order to be eligible to receive financial aid, you must meet and maintain your school's standards of satisfactory academic progress toward a degree or certificate program. Check with your school for specific information.

Scholarships - scholarships, like grants, are a form of financial aid that do not have to be repaid. These are available from many sources including community groups, schools and private corporations. Scholarships can be awarded based on a variety of criteria including scholastic achievement, hobbies and college majors.

Student Account - an account to which your financial aid is disbursed. These funds pay your tuition and fees or receivables you owe UAF. If funds remain after fees are paid, the balance is mailed to you in the form of a refund check.

Student Aid Report (SAR) - the report you receive as a result of filing the FAFSA or Renewal FAFSA.

Subsidized Federal Stafford Loans - For subsidized loans, loan interest is paid on your behalf by the government while you are enrolled as at least a half-time student and during grace or deferment periods. For both subsidized and unsubsidized loans, repayment of principal and interest begins six months after you cease to be enrolled at least half-time.


UAOnline - the student information system at UAF integrates all of your student information into one database. A web interface allows you immediate access to your student information (e.g. grades, enrollment; financial aid awards and disbursements, account information, etc.).

Unsubsidized Federal Stafford Loans - for unsubsidized loans, loan interest accrues within sixty days of disbursement and can be paid while you are in school, or capitalized until you begin repayment. Capitalized interest is added to the principal amount outstanding. For both subsidized and unsubsidized loans, repayment of principal and interest begins six months after you cease to be enrolled at least half-time.


Variable Interest - interest rates that change periodically (e.g. quarterly, annually etc.). The interest rates for federal Stafford and PLUS Loans are set by the government each year and change annually on the first of July.

Verification of Income - a review process in which the financial aid office requests documentation to verify the accuracy of FAFSA data.

Verification of Enrollment - certification by the school registrar that you are attending full or part-time. Students seeking in-school deferment of loan payments may request this service.

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