Glossary of Financial Aid Terms

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z

Acronyms

In-State Student: A student who has met the legal residency requirements for the state, and is eligible for reduced in-state student tuition at public colleges and universities in the state.

Income: The amount of money received from employment (salary, wages, tips), profit from financial instruments (interest, dividends, capital gains), or other sources (welfare, disability, child support, Social Security and pensions).

Income Contingent Repayment: Under an income contingent repayment schedule, the size of the monthly payments depends on the income earned by the borrower. As the borrower's income increases, so do the payments. The income contingent repayment plan is not available for PLUS Loans.

Independent: An independent student is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). A parent refusing to provide support for their child's education is not sufficient for the child to be declared independent. (See also Dependent.)

Indirect Costs: All the non-tuition-related costs associated with attending college, including room, board, transportation, medical, and personal expenses.

Individual Retirement Account (IRA): One of several popular types of retirement funds. It is not legal to borrow money from your IRA to help pay for your children's education.

Installment Loan: A consumer loan in which the principal and interest are repaid on a regular (usually monthly) schedule. The payments are called "installments" and are all for the same amount.

Institutional Student Information Report (ISIR): The electronic version of SARs delivered to schools by EDExpress.

Insurance Fee: Fee passed on by the lender to the federal government as insurance against default. Insurance fees are charged as the loan is disbursed, and typically run to 1% of the amount disbursed. See also Guarantee Fee.

Interest: Amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal balance of the loan. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. All federal loans issued since October, 1992 use variable interest rates that are pegged to the cost of US Treasury Bills.

Internal Revenue Service (IRS): Federal agency responsible for enforcing US tax laws and collecting taxes.