Glossary of Financial Aid Terms

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Acronyms

Lender: A bank, credit union, savings & loan association, or other financial institution that provides funds to the student or parent for an educational loan. Note: Some schools now participate in the Federal Direct Loan program and no longer use a private lender, since loan funds are provided by the US Government.

Loan: A type of financial aid which must be repaid, with interest. The federal student loan programs (FFELP and FDSLP) are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.

Loan Consolidation: See Consolidation Loan.

Loan Disclosure Statement: A document that shows the amount of a loan; where, when, and what repayments must be made; the interest rate; and the cost of borrowing that loan.

Loan Forgiveness: The federal government cancels all or part of an educational loan because the borrower meets certain criteria (e.g., is performing military or volunteer service).

Loan Interviews: Students with educational loans at most schools are required to meet with a financial aid administrator before they receive their first loan disbursement and again before they graduate or otherwise leave school. During these counseling sessions, called entrance and exit interviews, the Financial Aid Administrator (FAA) reviews the repayment terms of the loan and the repayment schedule with the student.