default – Failure to repay a loan in accordance with the terms of the loan.
deferment – A period of time in which a borrower is not required to be actively making payments on a student loan. This includes while a student is enrolled at least half time in addition to other qualifying circumstances.
department of education federal student loan – The US Department of Education sponsors student loan programs to help students and families pay for expenses related to education. See FFEL and Direct Loan Program.
direct loan – Officially named the William D. Ford Federal Direct Loan Program. Under the Direct Loan Program, the funds for the student loan come directly from the federal government. Generally known as Stafford Loans (for students) and PLUS Loans (for parents).
FAFSA – Free Application for Federal Student Aid Apply on the web at http://www.fafsa.ed.gov/
federal consolidation loan – A loan that allows a borrower to consolidate all or some outstanding education loans into a single new loan, even if the oans are currently held by more than one lender and are of different loan types. Made possible by the Federal Family Education Loan (FFEL) program as authorized by the Federal government.
Federal Family Education Loan (FFEL) – A loan program authorized by the federal government. FFEL loans will come from a bank, credit union, or other lender that participates in the program. Generally known as Stafford Loans (for students) and PLUS Loans (for parents).
federal student loan – see Federal Family Education Loan
Federal Work-Study (FWS) Program – Formerly known as College Work-Study Program, provides part-time job opportunities for college students. See: The benefits of college work-study
FFEL – Acronym for Federal Family Education Loan
forbearance – A temporary period of suspension of payments on a federal or direct loan after repayment has begun, and if the student does not qualify for deferment
grace period – The specified period of time between your graduation date and the date loan repayment begins. If you drop below half-time status before graduating, the grace period applies.
limits – The federal government sets limits for the amount of loans that students may borrow in stafford loans each year. See: Student Loan Limits
merit-based aid – Awarded because of individual student achievements or qualifications, such as grade point average, test scores, or activities. Merit based aid is usually in the form of scholarships.
need-based aid – Awarded to students based on eligibility and financial need.
nelnet – An educational finance company that provides consolidation and repayment services for student loans
Perkins – A federal low-interest loan for both undergraduate and graduate students with financial need in which the student’s school is the lender. The loan is made with government funds, and the school contributes a share. Students must repay this loan to the school.
PLUS loans – Parents can borrow a PLUS Loan to help pay education expenses for a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program.
repayment period – The time during which a borrower is actively paying back an education loan.
Sallie Mae – A company that provides consolidation and servicing for student loans originated under the Federal Family Education Loan Program. Created by Congress in 1972 as a government-sponsored enterprise (GSE), Sallie Mae became a private corporation in 2004.
Stafford Loan – Direct loans or federal loans available to students to pay for educational expenses
Subsidized Loan – A federal student loan in which the interest is subsidized by the government.
Unsubsidized Loan – A federal student loan in which the interest is not subsidized by the government. See: Subsidized & Unsubsidized Federal Student Loans – What’s the difference?
William D. Ford Federal Direct Loan (Direct Loan) Program – Under the Direct Loan Program, the funds for the student loan come directly from the federal government. Generally known as Stafford Loans (for students) and PLUS Loans (for parents).