Student Loan and Financial Aid Terms

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Capitalized Interest

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Unpaid interest that has been added to the principal balance of a loan.

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Cosigner

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Someone who legally agrees to take responsibility for a person's debt if they cannot repay it.

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Cost Of Attendance

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Total expense of going to college which may include tuition, room and board, fees, books and supplies, transportation, health insurance, etc. Also known as Sticker Price or a school's published price.

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Default

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Long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score.

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Deferment

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A process that allows a borrower to pause their federal student loan payments; interest does NOT accrue during this time period on subsidized loans.

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Delinquency

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Describes the status of being behind on one or more loan payments.

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Direct Plus Loans

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A federal loan available to graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools.

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Direct Subsidized Loan

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A federal student loan available to undergraduate students; the federal government pays interest on the loan as long as the student is in school at least part-time.

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Direct Unsubsidized Loan

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A federal student loan available to undergraduate and graduate students; the student is responsible for paying the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into the principal amount of their loan.

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Disbursement

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A portion of a federal student loan that the school pays out by applying the funds to the student's school account or by paying the borrower directly. Students generally receive their federal student loans in more than one disbursement.