Paying For College Terms

Direct Plus Loans

• 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

• A private loan offered by banks to cover tuition costs for any student

• A government grant that does not need to be repaid for undergraduate students

• A loan specifically for international students studying in the United States

Principal

• Original amount of money borrowed, separate from interest or fees

• The total amount of money including interest and fees

• A type of investment that generates returns

• The amount of money paid in taxes

Forbearance

• A process that allows a borrower to pause their federal student loan payments; interest continues to accrue during this time period and may be capitalized

• A method for borrowers to reduce their loan principal amount immediately

• A program that forgives federal student loans after a certain period of time

• A strategy to consolidate multiple federal student loans into one single loan

Delinquency

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

• Refers to the act of committing a crime

• Indicates a person's financial stability

• Describes a type of investment strategy

Private Student Loan

• A federal student 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, with low-interest rates.

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 student loans into a single payment

• A program that provides immediate loan forgiveness for all federal student loans

• A requirement for borrowers to start making payments immediately after graduation

Loan Servicer

• An organization that provides financial advice to borrowers

• The organization that collects payments on a loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a loan on behalf of a loan holder

• A type of insurance that protects lenders against borrower default

• A government agency that regulates interest rates on loans

Repayment Period

• The time period over which you must repay your student loan, currently between 5 and 15 years for Federal loans

• The maximum time period over which you must repay your student loan, currently between 10 and 30 years for Federal loans

• The minimum time period over which you must repay your student loan, currently between 1 and 5 years for Federal loans

• The average time period over which you must repay your student loan, currently between 15 and 25 years for Federal loans

Fixed-Rate Loan

• A loan with an interest rate that does not change over the life of the loan

• A loan that has a variable interest rate that can change periodically

• A loan that is secured by collateral such as property

• A loan that must be paid back within a year

Loan Consolidation

• A process that allows a borrower to COMBINE multiple federal loans into one, allowing the borrower to make one monthly payment.

• A method to increase the interest rate on existing loans.

• A strategy to avoid paying off loans altogether.

• A way to apply for additional federal loans without any requirements.