Glossary

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

 

A

Academic Year

The period of time each year when school is open; typically, an academic year is September through May or August.



Accreditation

Accreditation aims to assure an institution's academic quality and accountability, and to encourage its improvement. It is a voluntary, non-governmental peer review process by the higher education community. In the United States, accreditation is the single-most used indicator by students, families, government officials, and the press that an institution or program provides a quality education. Accreditation is different from state authorization or licensure which is an approval process to operate as an institution of higher education in a particular state.



Accrual Date

The date interest charges on a loan begin to accrue.



Accrued Interest

Interest that grows on the upaid principal balance of a loan.



Amortization

The process of gradually repaying a loan over an extended period of time through periodic installments of principal and interest.



Annual Loan Limits

The largest amount you are allowed to borrow each year. Annual loan limits vary according to the type of loan you have, and where you are in your degree program.



Annual Percentage Rate (APR)

The APR is the yearly cost to you of borrowing your loan, shown as a percent of the amount you borrowed. The federal Truth in Lending Act requires that lenders provide you with an APR so you can figure out how much borrowing money is expected to cost you each year. Because it is calculated the same way on different loans from different lenders, the APR also allows you to compare loans with different terms and conditions. More...



Associate Degree

A two-year college degree.



Authorization

The process of determining if a postsecondary educational institution meets minimum standards for operating as set out in state law. Essentially, any entity that offers or conducts a postsecondary program, course, or vocational training or that offers an educational credential must be approved by the state to do so.


Award Letter

A notice from the financial aid office at the school where you applied for admission. The award letter details your financial need and the types and amounts of financial aid awarded. You accept the financial aid package by signing the award letter and returning it to the financial aid office.



Award Year

The academic year for which financial aid is requested (or received).

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B

Bachelor's Degree

A four-year college degree.

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Base Rate

This is the simple note interest rate before considering any effect of interest capitalization, fees, and borrower benefits which are factored into the Annual Percentage Rate.

 


Borrower Benefits

AlaskAdvantage Borrower Benefits are origination fee and interest rate reductions on non-subsidized loans, account credits, and a variety of services designed to keep students' costs as low as possible. Benefits are variable, meaning that a new benefits package will be introduced each program year. AlaskAdvantage Borrower Benefits are a package of cost reductions available only when you borrow from AlaskAdvantage Loan Programs (Alaska Supplemental Education Loan, Alaska Consolidation, and Special Program Loans). Click here to view current benefit levels



Budget

The total estimated cost to attend an institution. Costs include: books, fees, room and board, supplies, transportation, tuition and miscellaneous personal expenses. Each institution develops a standard budget for the purpose of calculating student financial need.



Bursar's Office

The office at your school that is responsible for your tuition bill and collecting your payment.

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C

Campus-Based Aid

Federal aid directly administered by the institution. The programs funded include aid for Federal Work-study, Perkins, and the Supplemental Education Opportunity Grant. Campus-based loans are separate from Direct Loan Programs.



Capitalization of Interest

Interest is capitalized when any unpaid amounts are added to the amount you originally borrowed (the principal). Capitalization of interest increases the minimum monthly payment on a loan and the amount of interest paid over the term of the loan because once "capitalized," interest accrues on the resulting higher principal balance.



Consolidation Loan

A loan that combines several student loans into one bigger loan from a single lender. The consolidation loan is used to pay off the balances on the other loans.



Cosigner

A cosigner on a loan assumes responsibility for the loan if the borrower should fail to repay the loan.  A cosigner has an independent responsibility to repay the loan and to notify ACPE in the event of changes affecting the endorser/cosigner or the student borrower.

ACPE may notify the cosigner of delinquency in repayment, deferments granted, or any repayment agreement that increases the amount due on the loan. You may elect to provide an endorser/cosigner to ensure your application is found to be creditworthy.  If you elect to provide an endorser/cosigner in support of your loan request, that person will continue to be a responsible party for the loan even in the event you meet the credit conditions independently.


 

Cost of Attendance - (COA)

The total cost to attend an institution (see budget).



Credit Rating/Score

A numerical score calculated based on a standard formula designed to take into consideration a number of credit history elements, including an individual's history of timely payments and their total outstanding debt. Federal Stafford loans do not require a credit review; however, PLUS loans and alternative loans do require credit review.

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D

Default

Failure to abide by the promises you made when you signed your Promissory Note. Default may cause the borrower to lose many repayment options; to be subject to involuntary payments, such as garnishments; and be ineligible for future loans. ACPE offers many options to help borrowers avoid default whenever possible.



Deferment

A postponement of payments. There are specific eligibility requirements a borrower must meet to defer payment on a loan.



Delinquent

A loan is delinquent when payment is due and is not paid on time. ACPE offers repayment options to help borrowers who may be unable to meet their current repayment obligation.



Dependency Status

All students are presumed to be dependent on their parents, unless the student is: at least 24 years of age as of January 1st; married; a graduate or professional student; a Veteran of the U. S. Armed Forces; an orphan or a ward of the court; or has a dependent other than a spouse.



Dependent

A person who depends on another for more than half of their financial support. The terms "dependent" and "independent" have specific meanings defined on the FAFSA.



Disbursement

The transmittal of student loan funds to your school. Normally, the school will credit your account with a disbursement for monies owed the school, then release excess funds to you. You need to check with the school to see exactly how they disburse funds.

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E

Eligible Program

A course of study that meets the program eligibility requirements for the U. S. Department of Education and ACPE Programs to qualify for financial aid.



Enrollment Status

Determined by the number of credit hours in which you are enrolled for an undergraduate, full-time is generally 12 or more credit hours, and half-time is generally 6 -11 credit hours, or the equivalent. You must be enrolled at least half time to receive financial aid.



Expected Family Contribution (EFC)

The monetary contribution the federal government determines from your FAFSA that you or your parents should pay toward your cost of education. The EFC determination is based on a standardized financial analysis set in federal law and regulation.

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F

FAFSA - Free Application for Federal Student Aid

The single application for federal student aid. Completion of the FASFA ensures you get the lowest cost of financial aid possible. The FAFSA is the federal application used to determine grant and loan aid eligibility. It is not necessary to have financial need to qualify for financial aid on the FAFSA.



Federal Family Education Loan Programs (FFELP)

The FFELP includes subsidized and unsubsidized Federal Stafford Loans and Parent Loans for Undergraduate Students (PLUS).

The Health Care and Education Reconciliation Act of 2010, ended the authority for state, nonprofit, and private lenders to make new federal loans after June 30, 2010.

  • New Federal Stafford and PLUS education loans will be issued from the federal government's Direct Loan Program.

  • ACPE will continue servicing existing federal loans. The base interest rates on existing loans and the terms of master promissory notes will remain the same. For more information on existing loan accounts, register for ACPE's online account services.



    Federal Loan Programs

    Federal Loan Programs include subsidized and unsubsidized Federal Stafford Loans, Parent PLUS Loans, and Federal Consolidation Loans.



    Federal Stafford Loan

    A federally guaranteed low interest rate loan for students. Subsidized Stafford loans are need-based and unsubsidized loans are non-need based. The government pays the interest during certain periods for subsidized loans, and the student pays the interest during all periods for unsubsidized loans. You may receive a subsidized and unsubsidized loan for the same term if your financial need exceeds the annual loan limit for subsidized loans.



    Financial Aid

    Money provided to you and your family to help pay for your education. Major forms of financial aid include gift aid (grants and scholarships) and self-help aid (loans and work).



    Financial Aid Administrator

    The person(s) at each school who are responsible for advising and counseling students regarding their financial aid packages. They are also responsible for ensuring that aid is provided to students in compliance with applicable program rules.



    Financial Aid Package

    The total amount of aid (federal and alternative) you receive to fund your postsecondary education.



    Financial Need

    Your cost of attendance minus the portion of those costs you will pay.



    Fixed Interest

    The rate of interest remains the same for the life of the loan.



    Forbearance

    A temporary postponement of payments on a loan. ACPE may use this term to describe a temporary period during loan repayment when monthly payments are reduced due to borrower circumstances.

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    G

    Grace Period

    The period of time after you stop attending school at least half time and repayment begins. A grace period is usually six months.



    Graduate Student

    A student who is enrolled in a Masters or PhD program.



    Graduated Repayment

    A repayment schedule in which you start with smaller payments that increase over time.



    Grant

    Need-based financial aid that does not have to be repaid.



    Gross Income

    Income before taxes, deductions, and allowances have been subtracted.

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    I

    Interest

    The amount of money charged on a loan. 



    Interest Subsidies

    Interest costs that you don't have to pay. For example, if you have a qualifying need, the federal government may pay your Stafford loan interest while you're in school, and during other qualifying periods.

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    L

    Lender

    A institution that lends money.



    Loan

    Money borrowed and that must be repaid.

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    M

    Master Promissory Note (MPN)

    A Promissory Note that authorizes the lender to disburse multiple loans during multi-year terms upon your request and the school's certification of your loan eligibility. The MPN is also referred to as a loan application.



    Maturity Date

    For the purpose of your education loans, this is the date upon which your loan moves from the in-school period, grace period, or deferred status into repayment and payment becomes due.

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    O

    Origination Fee

    An administrative processing fee you pay on your education loans. Typically the fee is deducted from the disbursement to the institution you attend.



    P

    Partial Financial Hardship

    Partial Financial Hardship occurs when the total of your annual payments due on your eligible loans, as calculated under the standard 10-year repayment plan at the time you initially entered repayment, exceeds 15% of the difference between your adjusted gross income and 150% of the poverty line for your family size and state of residence.



    Pell Grant

    A need-based federal grant available to qualifying undergraduate students. Repayment is not required.



    PLUS Loans (Parent Loans for Undergraduate Students)

    Federal loans that are available to parents of undergraduate students.



    Principal

    The unpaid balance of the original loan. The principal balance bay be larger than the original loan amount, if interest is capitalized.



    Promissory Note

    A legally binding contract you sign when you borrow money. The promissory note states your terms, conditions, rights, and responsibilities regarding the loan.

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    R

    Renewable Scholarships

    Renewable scholarships can be awarded for more than one year. Some scholarships are automatically renewed while others require the annual submission of paperwork. The Alaska Performance Scholarship (APS) requires the student to complete the FAFSA each year. Check with your school to ensure the status of any scholarship.



    Repayment Options

    The payment options designed to fit a variety of financial circumstances you may experience. Types of options include:

    • Standard repayment: a set minimum monthly payment (MMP) that will remain constant for the loan’s full ten-year term.
    • Income-sensitive repayment: an MMP that is a percentage of your net income (but cannot be lower than the interest accruing monthly on your account).
    • Graduated repayment: a series of "steps" during which you first pay a reduced MMP during the early years of repayment, gradually increasing to a larger MMP to complete repayment within the ten-year period.


    Repayment Schedule

    A schedule that sets out the designated term of the loan, the minimum monthly payment due, interest rate and payment due dates.



    Repayment Term

    The period of time in which the loan is to be repaid in full. Generally, education loans have a ten-year term. You may be eligible for extended repayment terms if you experience qualifying financial hardships.

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    S

    Satisfactory Academic Progress (SAP)

    The institution you attend sets a grade point average and academic progress threshold that you must maintain. If you fail to meet satisfactory academic progress, federal funding may be denied.



    Scholarship

    A type of funding that does not need to be repaid; it is financial aid that is generally based on academic, athletic, artistic or civic merit.



    Selective Service

    Registration for the military draft. Male United States citizens who have reached the age of 18 and were born after December 31, 1959 must be registered with the Selective Service to be eligible for federal financial aid.



    Simple Interest

    The interest accruing on the unpaid principal balance. It is important to note that loan terms allow borrowers to postpone payment of accruing interest and later add (capitalize) that to their principal to be paid in installments; however, no interest is charged on the unpaid interest until after it is capitalized.



    Student Aid Report (SAR)

    The official summary of your FASFA information sent to you after you submit your FAFSA. It is important to check it for accuracy and follow instructions for correcting errors. Your school's financial aid office can answer questions you have about your SAR or you can call the U.S. Department of Education at (800) 4FEDAID.



    Subsidized Loan

    A need-based loan in which the federal government pays the interest during qualifying periods while you are in school, deferment, or your grace period.

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    T

    Term of a Loan

    The length of time to repay a loan.



    Title IV Programs

    Programs created by the federal Higher Education Act of 1965 to provide U.S. citizens with universal access to postsecondary education. These federal programs include: Pell Grants, Supplemental Education Opportunity Grants, Work-study, Perkins Loans, Stafford Loans, and PLUS Loans.

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    U

    Undergraduate Student

    A student pursuing a four-year baccalaureate degree or a student in a two-year or certificate program.



    Unmet Need

    The amount of money still needed to pay your cost of attendance after factoring in the EFC and the awarded financial aid.



    Unsecured Loan

    A loan in which a lender does not require collateral (pledged property with a set value which the lender may claim if the loan is not repaid as agreed upon) from the borrower. Education loans are unsecured loans.



    Unsubsidized Loan

    An unsubsidized loan is one in which you pay the interest during all periods of the loan.

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    V

    Variable Interest

    For the purpose of ACPE programs, variable interest is an interest rate that fluctuates on a yearly basis over the life of the loan. Most loans are capped with a maximum rate of interest that can be charged. Interest rates are re-set each year in July based on the federal Title IV rates.



    Verification

    For the purposes of the federal aid programs, when the accuracy of information provided on the FAFSA by a borrower is verified by a financial aid officer.



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