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Financial Literacy

Learn more about Financial Literacy by exploring the Project on Student Debt website
GLOSSARY
OF 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
Academic Year
The measure of academic work accomplished each year by students attending postsecondary educational institutions as defined by the school. OU's academic year consists of 30 weeks of instructional time in which full-time students are expected to complete at least 24 semester hours. 

Accrued Interest
Interest that accumulates and is paid in installments at a later date (usually when the principal becomes due) rather than on a regular schedule from the time a loan is disbursed and interest begins. Accrued interest may be compound (interest computed on the sum of the original principal and accrued interest) or simple (interest computed on the original loan principal only). 

Adjusted Gross Income (AGI)
An individual's total income (wages, salaries, interest, dividends, etc.) as indicated on his or her income tax return after all allowable deductions are subtracted.

Aggregate Loan Limit
Also known as "cumulative loan limit." This is the maximum Federal Direct Stafford Loan amount, subsidized and unsubsidized, that students attending postsecondary educational institutions may borrow throughout their educational careers.

Aid Year
Also know as "award year." This is the time period, from July 1 of one year through June 30 the following year, that financial aid awards are made to students to help fund their postsecondary education.

Alternative Loan
An optional loan resource for college students that is available through private agencies willing to lend to students for educational purposes. This type of loan usually is not based on financial need. Deferment of the loan principal may be allowed while the student attends school, however, the student may be responsible for the interest while in school.

America Counts and America Reads
Federally funded program where students attending postsecondary educational institutions work with children needing assistance in mastering the fundamentals of math and reading. College students must file a Free Application for Federal Student Aid (FAFSA) and be granted a college work-study award to qualify for a paid position as a reading or math tutor at a local elementary school.

Amortization
The process of gradually repaying a loan over an extended period of time through periodic (usually monthly) installments of principal and interest.

Annual Loan Limit
The maximum Federal Direct Stafford Loan amount, subsidized and unsubsidized, college students may borrow during a specified loan period. The annual loan limit for a Direct Stafford Loan is determined by a student's grade level, which is based on how many credits a student has earned.

Annual Percentage Rate (APR)
This term refers to the one-year rate that is charged for borrowing money, or the one-year rate that is made for investing money.  For example, a credit card company may charge 1% per month, making the APR 12%.  You can figure the APR by multiplying the monthly percentage by 12 months.  You can use this information to compare different rates and determine the best deal for yourself!

Assets
The property value and debt that must be reported on the Free Application for Federal Student Aid (FAFSA). This includes financial holdings such as cash on hand, in checking and savings accounts, trust funds, stocks, bonds, other securities, real estate (excluding the family home), income-producing property, business equipment and business inventory.

Award
Financial assistance offered students to help reduce the cost of their postsecondary education. Types of awards include scholarships, grants, loans and work programs that are funded by federal, state and private sources. The combination of all awards is often referred to as the financial aid award package.

Award Notification
The report that notifies financial aid applicants of the financial assistance being offered. The award notification and accompanying instructional materials provide information on the types and amounts of aid being offered, specific loan programs, and student responsibilities and conditions that govern the awards. Students who apply for financial aid at Oakland University must be admitted before an award notification can be produced.

Award Package
The combination of all the financial aid awards (scholarships, grants, loans and work programs that are funded by institutional, federal, state and private sources) offered a student to help reduce postsecondary educational costs. Also see "Award."

Award Year
See "Aid Year."

 
Borrower

An individual who agrees to take on the obligation of repaying a loan and accepts the terms of the loan by signing a promissory note. Students are borrowers of Federal Direct Stafford Loans, subsidized and unsubsidized, and parents of legally dependent undergraduate students are the borrowers of Federal Direct Parent Loans (PLUS).
 

Budget
See "Cost of Attendance."

 
Campus-Based Programs

The term commonly applied to federal student aid programs administered directly by financial aid offices at eligible postsecondary educational institutions. These programs include Federal Perkins Loans, Federal Work-Study and Federal Supplemental Educational Opportunity Grants.
 

Cancelation of a Federal Loan
The result of a borrower meeting specific requirements established by law that releases the borrower from all obligation to repay a federal educational loan. As a result, the federal government pays the principal and interest. Cancelation is not automatic, and the appropriate loan agency must be contacted for more information.

Capitalization of Loan Interest
The process of deferring interest payments as they come due and adding the accrued interest to the principal amount of the loan. Although capitalizing is a way to postpone interest payments, it adds to the amount of the principal and, consequently, increases both the interest (based on the higher principal) and the overall amount that eventually must be repaid.

Central Processing System (CPS)
The computer system to which the Federal Processing Center electronically transmits Free Application for Federal Student Aid (FAFSA) need analysis data. This system performs computer database matches to ensure students meet certain eligibility requirements, calculates the official family contribution, and prints Student Aid Reports (SAR) to be mailed to student applicants.

College Work-Study (CWS) 
A federal- or state-funded employment program administered by postsecondary educational institutions that provides part-time jobs for students with financial need. To utilize the award, students must apply for a job with an eligible nonprofit organization (i.e. most on-campus and some off-campus employers), satisfy the employer's requirements to be hired and maintain the job. Student employees receive a paycheck every other week and are responsible for using the money to help pay educational expenses.

Consolidation Loan
See "William D. Ford Federal Direct Loan Program."

Co-signer
A co-signer refers to an individual who signs a Master Promissory Note for a loan, stating they will be liable for the loan obligation in addition to the initial borrower.  Typically, a bank or a private lender will require a co-signer if the borrower does not have a credit history to indicate their history of debt payment.

Cost of Attendance (COA)
Also known as "cost of education" or "budget." This is the average cost of a student's postsecondary education in a particular enrollment period, usually one academic year, which is based on course of study, grade level, residency and other factors. The cost of attendance includes the average cost for tuition as well as allowances for room and board (on or off campus), books and supplies, and miscellaneous personal expenses. It also may include other elements such as transportation, dependent care and study abroad program expenses. The figure is used to determine a student's eligibility for financial assistance. Also see "Financial Need."

Cost of Education
See "Cost of Attendance."

Credit history/report
An individual's credit history is a list of transactions on a credit report.  Just like your high school transcripts indicate to a university how academically successful you will be in college, your credit report shows lenders, landlords, employers, and retailers, how financially successful you have been in the past in terms of repaying your debts.  The three most popular credit reports are compiled by Experian, Equifax, and TransUnion.  You can obtain a free copy of your credit report once per year at AnnualCreditReport.com.  It is important to check your credit history for discrepancies and issues of identity theft.

Cumulative Loan Limit
See "Aggregate Loan Limit."

Custodial Parent
When parents are divorced or separated, this is the parent with whom a dependent college student lives and whose financial information must be reported on the Free Application for Federal Student Aid (FAFSA). If the custodial parent is remarried, federal regulations require the step-parent's information be included on the FAFSA as well, even if the custodial parent and step-parent file separate tax forms or have an agreement not to assist each other's children with college expenses.

 
Data Release Number (DRN)

The confidential four-digit number assigned to your Free Application for Federal Student Aid (FAFSA), which is printed on the top right corner of your Student Aid Report (SAR). Financial aid applicants need to provide their data release number when communicating with the Federal Student Aid Information Center regarding FAFSA and SAR processing.
 

Default on a Loan
The failure of a borrower to repay a loan according to the terms agreed to in the promissory note. Usually default is established once loan payments are more than 180 days past due. Defaults are recorded on a borrower's permanent credit record and can result in serious legal consequences.

Deferment of a Federal Loan
A limited and specified period of time that a borrower of a federal educational loan is not required to make regular monthly payments. Interest payments may or may not be postponed depending on the type of loan. To qualify for deferment, the borrower must meet at least one of the requirements established by law. Deferment is not automatic, and the appropriate loan agency must be contacted for more information.

Delinquent on a Loan
The failure of a borrower to make a loan payment by the due date. Delinquencies greater than 30 days are reported to national credit bureaus.

Dependent Student
A college student who does not meet the criteria, as defined by federal law, to be considered an independent student for the purpose of receiving financial aid. A dependent student must report parental income and asset information on the Free Application for Federal Student Aid (FAFSA) to be used in calculating the family contribution figure.

Direct Costs
Educational expenses owed to Oakland University, including tuition and university housing costs.

Direct Loan
See "William D. Ford Federal Direct Loan Program."

Direct Loan Servicing Center
The agent contracted by the U.S. Department of Education to collect on loans and handle deferments, repayment options and consolidations under the William D. Ford Federal Direct Loan Program.

Disbursement
The process which financial aid and loan funds are applied toward a student's postsecondary education and related living expenses. Any credit balance in excess of charges is refunded to the student to be used for other educational expenses.

Disclosure Statement
The document that provides information to a borrower about the terms of a loan and the consequences of default. This information includes the amount of the loan, interest rate, fee charges, length of grace period (if any), the maximum length of the repayment period, the minimum annual repayment amount, deferment conditions and the definition of loan default.

 
Electronic Access Code (EAC)

The code that serves as a financial aid applicant's unique identifier, allowing the applicant to access personal information in various U.S. Department of Education systems. The code can be used to file the Renewal Free Application for Federal Student Aid (FAFSA) online. A request for your EAC may be made on the U.S. Department of Education website.
 

Expected Family Contribution (EFC)
Also known as "family contribution." This is the dollar amount the federal government expects a student (and parents, if dependent, or spouse, if married) to contribute toward postsecondary educational expenses for one academic year. This is computed using a formula based on the income and asset information reported on the Free Application for Federal Student Aid (FAFSA). This dollar amount is made up of two components: the parent contribution (if the student is dependent) and the student contribution. The family contribution figure is used by schools to determine a student's eligibility for financial assistance. Also see "Financial Need."

 
FAFSA

See "Free Application for Federal Student Aid."
 

FAFSA on the Web
The U.S. Department of Education website that allows individuals to submit the Free Application for Federal Student Aid (FAFSA) online. Also see "Free Application for Federal Student Aid."

FAFSA Processor
See "Federal Processing Center."

Family Contribution (FC)
See "Expected Family Contribution."

Federal Direct Consolidation Loan
See "William D. Ford Federal Direct Loan Program."

Federal Direct Parent Loan for Undergraduate Students (PLUS)
See "William D. Ford Federal Direct Loan Program."

Federal Direct Stafford Subsidized Loan
See "William D. Ford Federal Direct Loan Program."

Federal Direct Stafford Unsubsidized Loan
See "William D. Ford Federal Direct Loan Program."

Federal Need Analysis Methodology
See "Need Analysis."

Federal Processing Center
Also known as "federal processor" or "FAFSA processor." This organization, contracted by the U.S. Department of Education, processes the Free Application for Federal Student Aid (FAFSA) that are submitted and electronically transmit the resulting need analysis data to the Central Processing System. 

Federal Processor
See "Federal Processing Center." 

Federal School Code
See "School Code." 

Federal Student Aid Information Center
The government agency to contact with general questions about the federal financial aid application process. Some of the services provided by the center include assistance with completing the Free Application for Federal Student Aid (FAFSA), explanation of the Student Aid Report (SAR) and how to make corrections, and assessment of the status of FAFSA and SAR processing. You can contact the Federal Student Aid Information Center at (800) 4-FED-AID or (800) 433-3243.

FICO score
Also known as a credit score, a FICO score can be anywhere from 300 - 850; the higher the score, the better, as a higher score indicates a stronger measure of creditworthiness.  Individuals can have a high credit score by maintaining a long history of paying bills on time each month and maintaining a low amount of debt.  FICO scores are used to determine whether or not an individual is eligible to be approved for a loan, in determining an interest rate, and goods and services such as a cell phone.

Financial Aid
The general term that describes the financial assistance offered to students to help reduce the cost of their postsecondary education. It is meant to supplement what the student (and parents, if dependent, or spouse, if married) is expected to contribute toward educational expenses. Financial aid programs include scholarships, grants, loans and work programs that are funded by federal, state and private sources. 

Financial Need
The difference between the cost of a student's postsecondary education and the dollar amount the federal government determines from data reported on the Free Application for Federal Student Aid (FAFSA) that a student (and parents, if dependent, or spouse, if married) can contribute toward that cost. Eligibility for need-based financial aid programs is determined using the resulting figure. 

Forbearance of a Federal Loan
A limited and specified period of time that a borrower of a federal educational loan, because of hardship, is permitted to postpone or reduce loan payments. Forbearance also may be given for circumstances not covered by deferment. Usually the borrower is charged for the interest that accrues on the loan during the forbearance period. To qualify for forbearance, the borrower must meet at least one of the requirements established by law. Forbearance is not automatic, and the appropriate loan agency must be contacted for more information. 

Free Application for Federal Student Aid (FAFSA)
The standard federal form students attending postsecondary educational institutions must complete each academic year to be considered for financial aid. This form collects income and asset data to determine the family contribution figure. Once an applicant submits the FAFSA to the federal government's processing center, data is prepared for release to the schools and state agencies listed on the application. Those schools and agencies then determine the student's financial aid eligibility. Students might be permitted to file the Renewal FAFSA if a FAFSA was filed the previous academic year. The renewal form contains preprinted data with responses from the prior year as well as other items that must be updated with current information. If a student qualifies to use the Renewal FAFSA, the federal government will notify the student by mail in December or January for the following academic year. 

 
Gift Aid

Also known as "gift assistance." This funding for postsecondary education, such as grants or scholarships, does not require repayment or a work obligation. 

Gift Assistance
See "Gift Aid." 

Grace Period
The time period that begins the day a borrower no longer qualifies for loan deferment at a postsecondary educational institution (i.e., date of graduation, the last day of attendance or the date a student's enrollment drops below half-time status). The grace period is six months for Federal Direct Stafford Loans, subsidized and unsubsidized, and nine months for Federal Perkins Loans. During the grace period, repayment of loan principal, and in some cases interest, is not required. 

Grant
Funding for postsecondary education, usually awarded on the basis of need, that does not require repayment or a work obligation. Federal Title IV grant programs include >Pell Grants and Supplemental Educational Opportunity Grants (SEOG). 

 
Higher Education Act (HEA)

Landmark national higher education legislation passed by Congress and signed by President Lyndon B. Johnson in 1965. Title IV of the HEA authorizes the majority of the nation's federal postsecondary financial aid programs and mandates that they be regulated and administered by the U.S. Secretary of Education. The HEA is effective for about five years, requiring Congress to review and then renew, terminate or amend existing programs. The statute's most current version, as amended, always stands as the official version of the law. 

Hope Tax Credit
An income tax credit available to taxpayers financing a student's postsecondary education. The credit is based on a student's college tuition charges, minus grants, scholarships and other tax-free educational assistance. It can be claimed during the first two years of schooling, up to $1,500. 

 
Independent Student
A student who meets one or more of the following criteria:
  • Age 24 by December 31 of the academic year for which aid is requested
  • Orphan or ward of the court
  • Veteran of the U.S. Armed Force
  • Graduate or professional student
  • Married prior to signing and filing the Free Application for Federal Student Aid (FAFSA)
  • Have legal dependents other than a spouse
  • Deemed to be independent by the school's financial aid administrator because of special circumstances.
  • Contact OU's Financial Aid Office to discuss your special circumstances with a financial aid adviser. (Note: The federal government does not consider a parent's refusal to provide financial assistance or the required FAFSA information a valid reason for a student being deemed as independent.)
Indirect Costs
Educational expenses that are owed to an establishment or business other than OU, including off-campus housing (rent, food, utilities), books and supplies, clothing and personal care items. 

Interest on a Loan
The fee a lender charges borrowers for using money. With federal student loans, the interest that accrues while a borrower is enrolled at least half time, during the grace period or during any other approved deferment period is paid by the federal government on the borrower's behalf for Federal Direct Stafford Subsidized Loans and Perkins Loans or billed to the student for Federal Direct Stafford Unsubsidized Loans. For all loan programs, once repayment of a loan principal begins, interest is charged. 

 
Lender

Organization that furnishes loan funds, such as a bank, college, the government or another establishment. The lender for the William D. Ford Federal Direct Loan Program is the federal government. 

Lifelong Education
The enrollment status of a student attending OU who has not been admitted to a degree-granting program. An exception to this is with teacher certification students who are categorized as lifelong education students even though they have not been admitted into an eligible certification program. Lifelong education students, in most cases, are ineligible for federal Title IV funds. 

Lifetime Learning Credit
An income tax credit available to taxpayers financing a student's postsecondary education. The credit is based on a student's college tuition charges, minus grants, scholarships and other tax-free educational assistance. It is available for any level of postsecondary study, up to $1,000. 

Loan
A sum of money borrowed to help finance a student's postsecondary education. By signing a promissory note, the borrower promises to repay a specified amount under prescribed conditions. The lender usually charges interest for use of the money, and the amount borrowed typically is repaid with interest over a period of time. 

Loan Period
The time frame covered by an educational loan, generally two semesters. However, a loan period also can be one semester in length. 

Loan Servicer
The agent designated to track and collect a loan on behalf of a lending institution.

 
Master Promissory Note
 (MPN)
A legally binding contract between the U.S. Department of Education and the borrower that contains the terms and conditions governing all the borrower's Federal Direct subsidized and unsubsidized loans, including repayment obligations. The master promissory note is valid for 10 years from the date it is originally signed. 

Michigan Competitive Scholarship
A scholarship offered to undergraduate students who are Michigan high school graduates and Michigan residents and received a qualifying score on theACT (American College Test). The award is based on both merit and financial need. The maximum amount available is up to $1,200 per academic year. 

 
National Student Loan Database Service (NSLDS)

A federal government database with the federal Pell Grant and educational loan borrowing history for every student. Schools must add any mid-year transfer students to their monitoring list to receive changes in aid information that may impact aid eligibility for the current year. 

Need Analysis
Also known as "federal need analysis methodology." This is the federally regulated method of determining the family contribution for a student applying for financial aid. The need analysis formula uses income and asset information provided on the Free Application for Federal Student Aid (FAFSA) to calculate what the government expects a student (and parents, if dependent, or spouse, if married) to contribute toward postsecondary educational expenses. 

Need-Based Aid
Any form of monetary assistance awarded by a postsecondary educational institution on the basis of a student's demonstrated financial need. Need is established by subtracting the family contribution figure, as calculated from the Free Application for Federal Student Aid (FAFSA) data, from the average cost of attendance figure. If a positive amount remains, the student may be eligible for a number of need-based aid programs. Also see "Financial Need." 

 
Origination Fee

The fee charged by the federal government for processing a federal educational loan. This fee helps reduce the government's cost of supporting low-interest educational loans. The charge is subtracted from each loan disbursement before students receive the funds. For example, a 3% origination fee is taken off the top of any disbursed Federal Direct Stafford Loan, subsidized or unsubsidized, leaving a 97% net payment. However, students must repay 100% of the gross amount of the loan. 

 
Parent Contribution (PC)

See "Expected Family Contribution." 

Pell Grant
A federal grant program offered to high-need students who are working toward their first bachelor's degree. The grant assists students with the least ability to contribute toward their basic educational expenses. It is considered gift assistance and does not require repayment or a work obligation. 

Perkins Loan
Federally subsidized long-term, low-interest educational loan available to students attending a postsecondary educational institution full time. Students are required to file the Free Application for Federal Student Aid (FAFSA) and must be pursuing an undergraduate, graduate or professional degree, or a certificate program, to be considered for the loan. Eligibility for this loan is based on financial need. The loan principal and interest are deferred until nine months (the grace period) after a student graduates, leaves school or ceases at least half-time enrollment. The school is the student's lender, so the loan must be repaid to the school. (Note: No origination fee is taken out of this loan.) 

PLUS Loan
See "William D. Ford Federal Direct Loan Program." 

PLUS Request Form
This form must be completed by a parent of an OU student to initiate processing of a Federal Direct Parent Loan (PLUS). Forms are available from OU's Financial Aid Office, 120 North Foundation Hall. 

Postsecondary Educational Institution
An institution that provides education beyond high school. The term is used to refer to community colleges, four-year colleges and universities, and trade and technical schools.

Preliminary Aid or Award
An approximation of financial assistance offered a student attending a postsecondary educational institution. This approximation, based on data from the student's Free Application for Federal Student Aid (FAFSA), is given prior to the completion of the required review process. Normally a preliminary award letter is mailed to inform students and their parents of estimated awards to assist them in financial planning for the academic year. It should be noted that awards may change once the required review process is completed.

Principal of a Loan
The amount of money borrowed through a loan, excluding interest or other charges (unless they are capitalized). 

Professional Judgment
Financial aid administrator discretion, based on the special circumstances of a student, to change data used in determining financial aid eligibility for a student attending a postsecondary educational institution. Also see "Special Condition Application." 

Promissory Note
The contract between a lender and a borrower that contains the terms and conditions governing the loan, including repayment obligations. This contract becomes legally binding when signed by the borrower. 

 
Refund

The credit balance, usually made up of financial aid, exceeding the charges a student owes for a particular semester. Financial aid first must be used to pay for tuition and on-campus room and board expenses, if any. If an excess remains, a refund will be released to the student. 

Registration
The process a student goes through to finalize a course schedule and to be recognized as a valid OU student for a particular semester. A student first enrolls for courses (through the OU telephone or SAIL computer system) and is sent a registration bill. The bill indicates the amount a student must pay to become registered. If that amount is not submitted by the due date, along with the payment stub, a student's status will not be converted from enrolled to registered. 

Renewal FAFSA
See "Free Application for Federal Student Aid." 

Repayment of a Federal Loan
The process of paying back an educational loan to the U.S. Department of Education in periodic (usually monthly) installments. A choice of repayment plans or consolidation may be available. A federal educational loan must be repaid even if a student doesn't graduate or obtain employment after graduation. 

 
SAR

See "Student Aid Report." 

Satisfactory Academic Progress (SAP)
A satisfactory rate of student course completion. By law, postsecondary educational institutions whose students receive federal Title IV funds must create policies for monitoring a financial aid recipient's level of academic progress toward a degree or certificate within a given period of time. Items for consideration include a student's grade point average and the number of semesters it takes to complete a program. 

Scholarship
A form of educational financial assistance that does not require repayment or a work obligation. Merit-based scholarships are awarded to students who demonstrate outstanding academic performance. Need-based scholarships are awarded to students who demonstrate financial need. Some scholarships are based on merit and financial need.

Scholarship Search Services
Online systems that help students find sources of funding for postsecondary education. Students provide information such as academic achievement, heritage, artistic talents, athletic ability, educational goals and career plans. The data is transmitted to a national computer database after which students are presented with a list of sources or organizations offering scholarships for which they may be eligible. In most cases, search services do not provide awards directly to applicants. It is up to the student to follow through and apply for the scholarships. A student should be wary of any service that guarantees a scholarship, charges a large fee, or requires a credit card or bank account number be provided, since this information is available for low or no cost. The U.S. Department of Education does not evaluate private scholarship search services. Students can check the reputation of a service by contacting the Better Business Bureau or State Attorney General's Office.

School Code
Also known as the "Title IV Code" or "Federal School Code." The U.S. Department of Education assigns this federal identification number to postsecondary educational institutions. OU's school code is 002307. 

Selective Service Certification
Documentation that must be collected to verify all male students, ages 18 through 25, are registered with Selective Service. Male students attending postsecondary educational institutions must register with Selective Service before receiving federal financial aid. 

Self-Help Aid
Financial aid loan programs or employment opportunity programs awarded to students by postsecondary educational institutions as a form of educational financial assistance.

Stafford Loan
See "William D. Ford Federal Direct Loan Program." 

Statement of Educational Purpose
A statement students must sign to receive federal student aid at a postsecondary educational institution. By signing, a student agrees to use federal Title IV financial assistance solely for educational expenses. The statement appears on the Free Application for Federal Student Aid (FAFSA).

Student Aid Report (SAR)
The official notification from the federal government that summarizes the information submitted on the Free Application for Federal Student Aid (FAFSA). This document is sent directly to students from the Central Processing System and shows the calculated family contribution figure and special messages related to a student's application. The report should be reviewed carefully for mistakes. If corrections are needed, Part II of the report must be completed with the revisions and signatures needed, then mailed to the appropriate Federal Processing Center address as listed in the instructions. 

Student Contribution (SC)
See "Expected Family Contribution." 

Subsidized Loan
See "William D. Ford Federal Direct Loan Program." 

Supplemental Educational Opportunity Grant (SEOG)
A federal grant program offered to high-need students working toward their first bachelor's degree. The grant assists students with the least ability to contribute toward their basic educational expenses. It is considered gift assistance and does not require repayment or a work obligation. 

Supplementary Financial Statement
The application students use to report special family circumstances not recognized on the Free Application for Federal Student Aid (FAFSA). If unusual circumstances have occurred for a student or family, this application may be completed and documentation provided to support such claims. The Supplementary Financial Statement is available at OU's Financial Aid Office and must be returned to that office for processing. 

 
Title IV Code

See "School Code." 

Title IV Funds
Federal financial aid programs authorized under Title IV of the Higher Education Act of 1965, as amended, that are regulated and administered by the U.S. Department of Education.

 
Unsubsidized Loan
See "William D. Ford Federal Direct Loan Program." 

Untaxed Income
Income or resources not reported to the Internal Revenue Service and therefore not subject to federal tax, or that are reported but excluded from taxation. Examples of untaxed income are welfare benefits, child support, interest on tax-free bonds, some social security benefits, certain unemployment compensation, and military and other subsistence and quarters allowances. 

U.S. Department of Education
Also referred to as the "federal government." This branch of the federal government administers federal financial assistance programs for students attending postsecondary educational institutions. These programs include Pell Grants, Perkins Loans, Supplemental Educational Opportunity Grants, Work-Study and William D. Ford Federal Direct Loans.

 
Variable Interest on a Loan
Interest rates that change periodically (quarterly, annually, etc.). The rates for Federal Direct Stafford Loans, subsidized and unsubsidized, and Parent PLUS Loans are set by the government each year, changing annually on July 1. 

Verification
The process the U.S. Department of Education uses to make sure information reported on the Free Application for Federal Student Aid (FAFSA) is accurate. Technical and administrative procedures are used by postsecondary educational institutions to detect and resolve inaccuracies in the data supplied on the FAFSA. Usually evaluation of tax and asset documentation is required. 

 
William D. Ford Federal Direct Loan Program

The collective name for federal educational loan programs administered by the U.S. Department of Education. OU participates in this program and assists the federal government in administering it to OU students by distributing loan applications, processing loans and disbursing loan funds. Since students and parents borrow these loan funds directly from the federal government, no bank or credit union is involved in the processing. Repayment is made to the federal government. Federal Direct Stafford Subsidized Loan

  • Long-term, low-interest educational loan available to students attending postsecondary educational institutions at least half time. Students are required to file the Free Application for Federal Student Aid (FAFSA) and must be pursuing an undergraduate, graduate or professional degree, or certificate program, to be considered for the loan. Eligibility for this loan is based on financial need. An origination fee is deducted from the loan by the federal government before funds are paid out. The loan principal is deferred until six months (the grace period) after a student graduates, leaves school or ceases at least half-time enrollment. The government makes interest payments on a student's behalf while the student is enrolled (at least half time) or during the six-month grace period or deferment period. 
     
  • Federal Direct Stafford Unsubsidized Loan
    Long-term, low-interest educational loan available to students attending postsecondary educational institutions at least half time. Students are required to file the Free Application for Federal Student Aid (FAFSA) and must be pursuing an undergraduate, graduate or professional degree, or certificate program, to be considered for the loan. Eligibility for this loan is not based on financial need. An origination fee is deducted from the loan by the federal government before funds are paid out. The loan principal is deferred until six months (the grace period) after a student graduates, leaves school or ceases at least half-time enrollment. The loan is not subsidized, therefore a student is billed for the interest on the loan while enrolled at least half time, during the six-month grace period or during any deferment period. The student may choose to pay the interest or postpone the interest payments and allow the interest to be capitalized. 
     
  • Federal Direct Parent Loan for Undergraduate Students (PLUS)
    Long-term educational loan available to parents to borrow on behalf of their dependent child attending postsecondary educational institutions at least half time. Eligibility for this loan is not based on financial need, and students are not required to file the Free Application for Federal Student Aid (FAFSA) for parents to apply for the loan. Parent borrowers must pass a credit-worthiness check performed by the federal government. An origination fee is deducted from the loan by the federal government before funds are paid out. Interest begins accruing as soon as any part of the loan is disbursed. Repayment begins 60 days after the entire loan has been disbursed. 
     
  • Federal Direct Consolidation Loan
    Long-term loan available to help student and parent borrowers simplify repayment, allowing for several types of federal educational loans with various repayment schedules to be combined into one loan (subject to certain eligibility requirements). The interest rate on a Direct Consolidation Loan may be lower than what the borrower currently is paying on one or more of the loans. After consolidation, one loan payment is made each month to the federal government.
Long-term, low-interest educational loan available to students attending postsecondary educational institutions at least half time. Students are required to file the and must be pursuing an undergraduate, graduate or professional degree, or certificate program, to be considered for the loan. Eligibility for this loan is based on financial need. An origination fee is deducted from the loan by the federal government before funds are paid out. The loan principal is deferred until six months (the grace period) after a student graduates, leaves school or ceases at least half-time enrollment. The government makes interest payments on a student's behalf while the student is enrolled (at least half time) or during the six-month grace period or deferment period.


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