Accrue- The process whereby interest accumulates on your loan. When we speak of “interest accruing on your loan,” we mean that the interest due on your loan is accumulating.

Borrower- An individual who signed and agreed to the terms in the promissory note and is responsible for repaying a loan.

Consolidation- The process of combining one or more eligible federal educational oans into a single new loan. The Direct Loan Program offers a Direct Consolidation Loan for those borrowers who are interested in consolidating their eligible educational loans.

Default- Failure to repay a loan according to the terms of the promissory note. There can be serious legal consequences for student-loan defaulters.

Dependent Student- A student who does not meet any of the criteria for an independent student. An independent student is at least 24 years old, married, a graduate or professional student, a veteran, a member of the armed forces, an orphan, a ward of the court, or someone with legal dependents other than a spouse.

Direct Subsidized Loan- Also referred to as Federal Direct Stafford Loan. A loan from the U.S. Department of Education made on the basis of the student’s financial need and other specific eligibility requirements. The federal government does not charge interest on these loans while borrowers are enrolled at least half-time, during a six-month period grace period, or during authorized periods of deferment.

Direct Unsubsidized Loan- Also referred to as Federal Direct Unsubsidized Stafford Loan. A federally financed student loan made to students meeting specific eligibility requirements. Interest is charged throughout the life of the loan. The borrowers may choose to pay interest charged on the loan or allow the interest to be capitalized (added to the loan principal) when the loan enters repayment.

Expected Family Contribution (EFC)- Your EFC is the number that’s used to determine your eligibility for federal student financial aid. This number results from the financial information you provided in your Fee Application for Federal Student Aid (FAFSA) application. Your EFC is reported to you on your Student Aid Report (SAR).

Forbearance- A period during which your monthly loan payments are temporarily suspended or reduced. You may qualify for forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. For a complete listing of Direct Loan forbearances and their eligibility criteria visit www.studentaid.ed.gov.

Grace Period- After borrowers graduate, leave school, or drop below harf-time enrollment, loans that were made for that period of study have several months before payments are due. This period is called the “grace period.” Most FFEL and Direct Loans have six-month grace periods.

During the grace period, no interest accrues on subsidized loans. Interest accrues on unsubsidized loans during grace periods, and this interest is capitalized when borrower’s loans enter repayment. Borrower’s repayment periods begin the day after their loans’ grace period ends. First payments will be due within 60 days after the repayment period begins. Each loan has only one grace priod. If borrowers return to school after the grace periods has expired, the borrower’s loan qualify for deferment while the borrowers are enrolled but return to repayment after borrowers leave school. There is no additional grace period.

Interest- A loan expense charged by the lender and paid by the borrower for the use of borrowed money. The expense is calculated as a percentage of the unpaid principal amount (loan amount), which includes the original amount borrowed and nay capitalized interest. Accrue interest is interest that accumulates on the unpaid principal balance of the loan.

PIN (Federal Student Aid PIN)- Your PIN serves as your identifier to allow access to personal information in various U.S. Department of Education systems. If you do not already have your PIN, you can request one online at www.pin.ed.gov. The PIN you will receive will be your universal U.S. Department of Education PIN.

Rehabilitation- The process of bringing a loan out of default and removing the default notation of a borrower’s credit report. To rehabilitate a Direct of FFEL Loan, you must make at least 9 full payments of an agreed amount within 20 days of their monthly due date over a 10 month period to the U.S. Department of Education.