Glossary
Academic Year
An academic year is one complete school year at the same school, or two complete, half years at different schools. For schools that have a year-round program of instruction, nine months is considered an academic year.
Acceleration
Acceleration is the demand for immediate repayment of the entire outstanding balance of a loan.
Aid for Military Family
Both the federal government and nonprofit organizations offer money for college to veterans, future military personnel, active duty personnel, or those related to veterans or active duty personnel.
Alternative Documentation of Income
Alternative documentation of income (ADOI) is proof of all current income to be provided when applying for an income-driven repayment (IDR) plan and not providing a federal tax return or tax transcript.
Annual Taxable Income
Your annual taxable income is the amount of income used to determine how much tax you owe in a given year. This can include wages, salaries, bonuses, tips, investment income, and unearned income.
Are you someone’s dependent?
Choose ‘no’ if no one can claim you or your spouse as a dependent. Choose ‘yes’ if someone can claim you as a dependent. Choose “Both you and your spouse” if you both are dependents. (You are a dependent if someone supports you and can claim a dependency exemption for you.)
Award Year
School year for which financial aid is used to fund a student’s education. Generally, this is the 12-month period that begins on July 1 of one year and ends on June 30 of the following year.
Capitalization
Capitalization is the addition of unpaid accrued interest to the principal balance of a loan. Over time, this can increase your monthly payment.
Collection Agency
An entity that recovers unpaid debt from borrowers who have defaulted on their loans.
Collection Costs
Expenses charged on defaulted federal student loans that are added to the outstanding principal balance of the loan.
Cookie
Cookies are bits of data that a website transfers to a computer’s hard drive. The most common use of cookies is for a website to determine your personal preferences. Some cookies disappear once you close the browser while some remain.
Credit
Credit refers to the amount of money you borrow and your ability to borrow to purchase goods and services. Credit is extended to you from a credit grantor with which you make an agreement to pay back the amount spent, plus applicable interest and fees, within an agreed-upon time.
Debt Collection
Debt collection is the course of pursuing payments of loan debts due by borrowers.
Debt Consolidation
Debt consolidation is a method of debt refinancing that involves taking out one loan to pay off others.
Default
A loan goes into default when you fail to repay the loan as outlined in your promissory note. Most federal student loan default occurs when a payment isn’t made in more than 270 days. It can result in legal
Debt Consolidation
Debt consolidation is a method of debt refinancing that involves taking out one loan to pay off others.
Deferment
A deferment is a temporary postponement of payment on a loan that is allowed under consequences and a loss of eligibility for additional federal student aid. Certain conditions and during which interest doesn’t accrue on subsidized loans. More info: https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/deferment
Debt Consolidation
Debt consolidation is a method of debt refinancing that involves taking out one loan to pay off others.
Deferment Dependents qualifying for child tax credit
You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. The credit is, however, phased out at higher incomes.
Direct PLUS Loan
Direct PLUS Loans are federal loans that graduate or professional students and parents of dependent undergraduate students use to help pay for education expenses.
Direct Subsidized Loan
A Direct Subsidized Loan is a federal student loan where a borrower isn’t generally responsible for paying interest while in an in-school, grace, or deferment period. To apply, start by submitting a FAFSA® form: https://studentaid.gov/h/apply-for-aid/fafsa.
Discretionary Income
Discretionary income is a factor used in determining a borrower’s payment amount for certain loan repayment plans and/or loan rehabilitation. It’s the difference between annual income and a percentage of the poverty guideline for the borrower’s family size and state of residence.
Early Action
Early action is a college admission policy that allows applicants to apply and receive notice of their admission early. Applicants accepted under early action are not under a binding agreement to attend that school and may submit applications to other schools.
Early Decision
Early decision is a college admission policy that allows applicants who commit to attend a school to apply and receive notice of their admission early. If an applicant is accepted, he or she agrees to attend that school and must withdraw all other applications.
Educational Service Agency
An educational service agency is a regional public multiservice agency that is authorized by state law to develop, manage, and provide services or programs to local education agencies, such as public-school districts.
Eligible Program
An eligible program is a program of organized instruction or study of a certain length that leads to an academic, professional, or vocational degree or certificate, or other recognized education credential.
Emancipated Minor
An emancipated minor is someone who has been legally deemed an adult by a court in his or her state of residence. If you are an emancipated minor, you are considered an independent student and will not provide information about your parents on the FAFSA® form.
Endorser
An endorser is someone who agrees to repay the Direct PLUS Loan if the borrower becomes delinquent in making payments or defaults on the loan. The endorser may not be the student on whose behalf a parent obtains a Direct PLUS Loan. Apply: https://studentaid.gov/endorser-addendum
Endorser Code
An Endorser Code is used to complete a Direct PLUS Loan addendum to the Master Promissory Note. If encountering issues, go here: https://studentaid.gov/help-center/answers/article/endorser-code-issue-troubleshooting.
Enrollment Status
Enrollment status is reported by the school you attended, and indicates whether you are, or were, full-time, three-quarter time, half-time, less than half-time, withdrawn, graduated, etc.
Entrance Counseling
Exit counseling provides important information to prepare you repay your federal student loan(s). Topics include: Contact Settings, My Loans, Preparing to Repay, Determining Your Repayment Strategy. Exit counseling is available at: https://studentaid.gov/exit-counseling/.
Exit Counseling
Entrance counseling explains your rights and the obligations you agree to meet as a condition of accepting a Direct Loan. More information about entrance counseling is available at: https://studentaid.gov/entrance-counseling/.
Entrance Counseling
Entrance counseling explains your rights and the obligations you agree to meet as a condition of accepting a Direct Loan. More information about entrance counseling is available at: https://studentaid.gov/entrance-counseling/.
Extended Repayment Plan
The Extended Repayment Plan allows you to repay your loans over an extended period. Payments are made for up to 25 years. There are specific eligibility requirements to qualify for this plan.
Federal Family Education Loan (FFEL) program
The Federal Family Education Loan (FFEL) Program was a program that worked with private lenders to provide education loans guaranteed by the federal government. The FFEL Program ended in 2010. All loans are now made through the Direct Loan Program.
Federal Pell Grant Program
The Pell Grant is the largest federal grant program offered to undergraduates. It is designed to assist students from low-income households. To qualify for a Pell Grant, a student must demonstrate financial need by completing and submitting the FAFSA® form.
Federal Perkins Loan
A Perkins Loan was available to undergraduate, graduate, and professional students until Sept. 30, 2017; the program has since expired. The Perkins Loan is a subsidized loan, meaning the federal government pays the loan’s interest while the borrower is in school.
Federal Student Aid
A Perkins Loan was available to undergraduate, graduate, and professional students until Sept. 30, 2017; the program has since expired. The Perkins Loan is a subsidized loan, meaning the federal government pays the loan’s interest while the borrower is in school.
Federal Perkins Loan
A Perkins Loan was available to undergraduate, graduate, and professional students until Sept. 30, 2017; the program has since expired. The Perkins Loan is a subsidized loan, meaning the federal government pays the loan’s interest while the borrower is in school.
Federal Perkins Loan
A Perkins Loan was available to undergraduate, graduate, and professional students until Sept. 30, 2017; the program has since expired. The Perkins Loan is a subsidized loan, meaning the federal government pays the loan’s interest while the borrower is in school.
Federal Student Aid
Federal student aid is aid from the government in the form of grants, loans, and/or work-study funds to assist students with college or career school. Students have to complete the FAFSA® form to apply for this aid.
Federal Supplemental Educational Opportunity Grant (FSEOG)
The Federal Supplemental Educational Opportunity Grant (FSEOG) is a grant that is awarded to an undergraduate student who demonstrates exceptional financial need to help pay for their education. Awards can range from $100–$4000 and don’t need to be repaid.
Federal Work-Study
Federal Work-Study provides part-time jobs for undergraduate and graduate students with financial need. You’ll need to be awarded work-study by your school’s financial aid office and secure an eligible job. Reach out to your school’s financial aid office for more info.
Financial Aid
Financial aid is money to help pay for college or career school.
Forbearance
A forbearance allows you to temporarily stop making your monthly student loan payments or temporarily make smaller payments. Eligibility for specific types of forbearance: https://studentaid.gov/manage-loans/lower-payments/get-temporary-relief/forbearance
FSA ID
An FSA ID consists of an account username and password that give you access to the U.S. Department of Education’s online systems and can serve as your legal signature when completing electronic documents. Create an FSA ID: https://studentaid.gov/fsa-id/create-account/launch
Full-Time Teacher
A teacher is a person who provides direct classroom teaching or classroom-type teaching in a non-classroom setting, including special education teachers.
Gifts to charity
Enter your total gifts of cash and non-cash to qualified charitable organizations. Enter cash donations only (check, credit card, actual cash) if you will be taking the standard deduction and your total cash portion of your donations was under $300.The calculator will automatically include a charitable contribution deduction (of up to $300) when the standard deduction is taken. This was a new deduction in 2020, made available as part of the CARES act.
Graduate or Professional Student
A graduate or professional student is a student who is pursuing education opportunities beyond an undergraduate (bachelor’s) degree. Graduate and professional programs include master’s and doctoral programs such as Ph.D., J.D., and M.D., among others.
Graduate Repayment Plan
The Graduated Repayment Plan starts with lower payments that increase every two years. Under this plan, you make payments for up to 10 years (between 10 and 30 years for consolidation loans).
Graduation Rate
A school’s graduation rate is the percentage of a school’s full-time, first-time degree- or certificate-seeking students who complete their degree or certificate within 150 percent of the published length of the program in which they are enrolled.
Grant
A grant is a monetary gift for people pursuing higher education. It is often based on financial need and does not need to be repaid (unless, for example, you withdraw from school and owe a refund).
Gross Income
Gross income is your total annual income from wages and other sources, before certain deductions and taxes are calculated.
Guaranty Agency
A guaranty agency is a state or private non-profit agency that helps administer the Federal Family Education Loan (FFEL) Program. A guaranty agency insures federal loans by repaying the loan holder when a loan defaults, and then collects the defaulted loan from the borrower.
Half-time Enrollment
Half-time enrollment is an enrollment status applied to students who are only enrolled in half of the expected full-time course load. Half-time enrollment can affect the cost of attendance (COA), and each school may have different half-time enrollment specifications.
Head of Household
For tax purposes, you might claim head of household if you are unmarried and responsible for more than half of the cost of keeping up your and your dependent’s home. Whether you are head of household can affect how you report tax return information on the FAFSA® form.
Homeless
A homeless individual is someone without a home who generally lives in shelters, parks, motels, hotels, cars, or with someone else due to not having anywhere else to go. Homeless individuals can still receive federal student aid.
Income = Wages, Salaries, tips, etc.
This is your total taxable income for the year after deductions for retirement contributions such as 401(k)s, IRAs, etc.
Income-Based Repayment (IBR) Plan
Eligible loans: Direct loans and FFEL Program loans other than those in default, PLUS loans made to a parent borrower, or Consolidation Loans that repaid a Direct or Federal PLUS Loan made to a parent borrower. Consolidating a Federal Perkins Loan may make you eligible.
Income-Contingent Repayment (ICR) Plan
Eligible loans: Direct loans other than those in default and parent PLUS loans. Consolidating a Federal Perkins Loan, FFEL Program loan or Direct PLUS Loan made to a parent may make you eligible.
Independent Student
For the 2024–25 FAFSA® form, an independent student is born before Jan. 1, 2001, married, a graduate/professional student, a veteran, a member of the U.S. armed forces, an orphan, a ward of the court, a current or former foster youth, someone who is or was in a legal guardianship, someone with legal dependents (not a spouse), an emancipated minor, or someone who is or at risk of being homeless.
Interest
Interest is a loan expense charged for the use of borrowed money and is paid by a borrower to a lender. The expense is calculated as a percentage of the unpaid principal amount of the loan. Select the article link to get more info.
Interest paid
Taxpayers can deduct the interest paid on qualified residences for up to $750,000 in mortgage debt (the limit is $375,000 if married and filing separately). For mortgages that were originated before December 15, 2017, the limit is $1 million in total mortgage debt. This includes refinancing these mortgages as long as the amount owed is not increased as part of the refinancing.Any interest paid on first, second or home equity mortgages over the limit is not tax-deductible. Only home equity loans that are used to buy, build or substantially improve the home that secures the loan are included. All other home equity loans do not have an interest deduction. Mortgage interest is reported on form 1098.
You can also include the amount you paid for “points” (which reduces your mortgage interest rate). Mortgage insurance premiums paid are no longer deductible.
Iraq and Afghanistan Service Grant (IASG)
You may be eligible for the Iraq and Afghanistan Service Grant (IASG) if your parent or guardian died as a result of military service performed in Iraq or Afghanistan after the events of 9/11, and you are not eligible for a Federal Pell Grant.
Itemized deduction
Your total itemized deductions from Schedule A.
Job Placement Rate
A school’s job placement rate is the percentage of graduating students who obtained employment either in the recognized occupation for which they were trained or in a related, comparable, recognized occupation within a determined period after receiving their degree/certificate.
Judgment Lien
A judgment lien gives a creditor the legal right to keep property when the owner fails to pay a debt. It can only be granted by a court. A student (or parent in the case of a parent borrower) with a judgment lien will not qualify for federal student aid.
Legal Guardianship
Legal guardianship is a designation by a court that authorizes someone to care for an individual in place or absence of parents. Having a legal guardian qualifies you as an independent student, such that you do not have to report your parents’ income on the FAFSA® form.
Lender
A lender is an organization that loans money. For Direct Loans, the lender is the U.S. Department of Education. If you have a FFEL Program loan, the lender may be a financial institution such as a bank or credit union. If you have a Perkins Loan, the lender is the school where you received the loan.
Litigation
Litigation is the act or process of bringing or contesting a legal action in court.
Loan
A loan is money borrowed from the federal government or a private source like a bank or financial institution, and must be paid back with interest.
Loan Discharge
Loan discharge is the removal of a borrower’s obligation to repay some or all of a loan under certain circumstances including death, disability, bankruptcy, fraud, and identity theft: https://studentaid.gov/manage-loans/forgiveness-cancellation
Loan Forgiveness
Student loan forgiveness is offered to encourage certain types of employment. A loan may be fully or partially forgiven after a certain number of years of qualifying employment.
Married Filing Jointly
If you are married, you are able to file a joint return with your spouse. If your spouse died during the tax year, you are still able to file a joint return for that year. You may also choose to file separately under te status “Married Filing Separately.”
Married Filing Separately
If you are married, you have the choice to file separate returns. The filing status for this option is “Married Filing Separately”.
Master Promissory Note (MPN)
An MPN is a legal document that contains the Borrower’s Rights and Responsibilities and Terms and Conditions for repayment. Direct PLUS and Direct Subsidized / Unsubsidized loans have different MPNs. Access the MPN at: https://studentaid.gov/mpn.
Medical and Dental Expenses
Enter your qualified medical and dental expenses for the year. This can include your health insurance premiums if you paid for them yourself (not through an employer sponsored plan) and you have not deducted them elsewhere. Your actual deduction is only for the amount that exceeds 7.5% of your Adjusted Gross Income (AGI). Enter your total expenses and we will calculate the actual deduction based on your AGI.
Merit-Based
Merit-based means that something is based on a student’s skill or ability. For example, a merit-based scholarship might be awarded based on a student’s high grades.
New Borrower
Someone who has no outstanding balance on a Direct Loan or Federal Family Education Loan (FFEL) Program loan when he or she receives a Direct Loan or FFEL Program loan on or after a specific date.
Non-tenure-track Employment
Non-tenure-track employment means work performed by adjunct, contingent, or part-time faculty, teachers, or lecturers who are paid solely for the credit hours they teach at institutions of higher education.
Ombudsman Group
The Ombudsman Group is dedicated to helping resolve disputes related to the federal student aid programs, including Direct Loans, Federal Family Education Loan (FFEL) Program loans, Perkins Loans, and grant programs: https://studentaid.gov/feedback-ombudsman/disputes/prepare
Out-of-State Student
An out-of-state student is a student who is attending a college or career school outside of his or her state of legal residence.
Partial Financial Hardship
Partial financial hardship is an eligibility requirement under the Income-Based Repayment and Pay As You Earn repayment plans. For more information, go to Repayment Plans.
Pay As You Earn (PAYE) Plan
The Pay As You Earn Plan is a repayment plan with monthly payments that are generally equal to 10% of your discretionary income, but never more than the 10-year Standard Repayment amount.
Payroll Deductions
Payroll deductions are amounts of money withheld from your paycheck by your employer.
PLUS Credit Counseling
PLUS credit counseling helps graduate/professional students and parents of eligible dependent undergraduate students understand the obligations associated with borrowing a PLUS loan and assists them in making careful decisions about taking on student loan debt.
Postbaccalaureate Teacher Certification Program
A postbaccalaureate teacher certification program is a program that enables those who hold at least a bachelor’s degree to earn teacher certification at the elementary or secondary level. Program specifics can depend on the school and state where the program is available.
Prepaid Tuition
A prepaid tuition plan, also known as a section 529 plan, lets you lock in future tuition rates at in-state public colleges at current prices and is usually guaranteed by the state in which the plan was established.
Principal
Principal refers to the sum of money lent, on which interest is paid.
Proprietary School
A proprietary school is a private, for-profit school that provides education and training.
Public Service Loan Forgiveness (PSLF) Help Tool
This tool will help you understand the following about the Public Service Loan Forgiveness (PSLF) Program: what is required to participate, if an employer qualifies, which loans qualify, and what actions to take. The PSLF Help Tool is available at: https://studentaid.gov/pslf/
Public Service Loan Forgiveness (PSLF) Program
The PSLF Program forgives the remaining balance on your Direct Loans after you have made 120 (10 years) qualifying monthly payments under a qualifying repayment plan, while working full-time for a qualifying employer.
Qualified Widow(er)
Generally, you qualify for this status if your spouse died during the previous tax year (not the current tax year) and you and your spouse filed a joint tax return in the year immediately prior to their death. You are also required to have at least one dependent child or stepchild for whom you are the primary provider.