Paying for Postsecondary Education Vocabulary

Direct Subsidized Loan

• 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.

• A type of loan that requires students to pay interest while in school.

• A loan available only to graduate students with high credit scores.

• A federal loan that does not require repayment until after graduation.

Direct Unsubsidized Loan

• 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.

• A type of loan that does not require repayment until after graduation.

• A loan that is only available to graduate students with financial need.

• A federal loan that is subsidized by the government to cover interest while in school.

Grace Period

• A period of time during which a borrower is required to make loan payments immediately after graduation.

• A period of time during which a borrower is typically not required to make loan payments, starting after graduation or leaving school.

• A time frame in which borrowers can apply for loan forgiveness without making payments.

• A duration where borrowers can defer interest on their loans without any conditions.

Private Student Loan

• A federal loan provided by the government with fixed interest rates and flexible repayment options.

• A non-federal student loan made by a bank, credit union, or other entity, which sets the terms and conditions for the interest rate, grace period, and length of repayment.

• A type of scholarship awarded based on academic merit that does not require repayment.

• A loan specifically designed for purchasing textbooks and other educational materials.

Deferment

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

• A method for borrowers to consolidate their federal student loans into a single payment.

• A program that provides immediate loan forgiveness for federal student loans after a certain period of time.

• A strategy for borrowers to reduce their monthly payments by extending the loan term.

Master Promissory Note (MPN)

• A legal document in which you promise to repay your federal student loan(s) and any accrued interest and fees to your lender or loan holder.

• A form that allows you to apply for multiple scholarships at once.

• A document that outlines the terms of a private loan agreement.

• A summary of your academic achievements and qualifications.

Federal Student Aid

• The largest form of student aid in the country; federal aid programs come in the form of government grants, loans, and work-study opportunities.

• A type of financial aid that only includes scholarships and grants.

• A program that provides financial assistance exclusively for graduate students.

• A loan program that requires repayment with high interest rates.

Gift Aid

• Financial aid that must be repaid, such as loans.

• Financial aid that does not have to be paid back, such as scholarships and grants.

• Financial aid that is only available to international students.

• Financial aid that is provided only for tuition fees.

Interest Rate

• The fee paid for using someone else's money, usually expressed as a percentage of the amount borrowed.

• The amount of money that is paid back in total after borrowing.

• The rate charged for borrowing money usually expressed as a percent of the amount borrowed.

• The total cost of a loan including interest and fees.

FAFSA Submission Summary

• A report you receive with the information you submitted in your FAFSA. It contains your SAI and other information that colleges will use to determine your financial aid package.

• A summary of your college applications and their statuses.

• A document that outlines the scholarships available to you based on your FAFSA submission.

• A checklist of items needed to complete your FAFSA application.