Glossary of Financial Aid Terms

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Acronyms

Gapping: The practice of failing to meet a student's full demonstrated need. See also Unmet Need.

Garnishment: The practice of withholding a portion of a defaulted borrower's wages to repay his or her loan, without their consent.

Gift Aid: Financial aid, such as grants and scholarships, which does not need to be repaid.

Grace Period: A short time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period may also kick in if the borrower leaves school for a reason other than graduation or drops below half-time enrollment. Depending on the type of loan, you will have a grace period of six months (Stafford Loans) or nine months (Perkins Loans) before you must start making payments on your student loans. The PLUS Loans do not have a grace period.

Grade Point Average (GPA): An average of a student's grades, converted to a 4.0 scale (4.0 is an A, 3.0 is a B, and 2.0 is a C). Some schools use a 5.0 scale for the GPA.

Graduate Student: A student who is enrolled in a Masters or PhD program.

Graduated Repayment: A schedule where the monthly payments are smaller at the start of the repayment period and gradually become larger.

Grant: A type of financial aid based on financial need that the student does not have to repay.

Gross Income: Income before taxes, deductions and allowances have been subtracted.

Guarantee Agency or Guarantor: State agencies responsible for approving student loans and insuring them against default. Guarantee agencies also oversee the student loan process and enforce federal and state rules regarding student loans.

Guaranteed Student Loan (GSL): (Now called the Stafford Loan.) A guaranteed loan is insured against default. In the case of guaranteed student loans, the Federal government agrees to repay the loans in case of default. Each loan is charged a guarantee fee to cover the costs of defaulted loans.