The following glossary may be of help to you as you embark upon the education financing process.
Academic Year. Measured in semester, trimesters or quarters. It is the amount of time that you are in school.
Capitalization. The interest that accumulated while you were in school that is added to the amount borrowed at periodic intervals.
Cost of Education. Education expenses, including tuition and board, books, supplies, transportation costs and personal expenses.
Default. When you fail to pay the loan according to the promissory note.
Deferment. When you lender agrees to temporarily postpone your payments because of a difficult financial situation.
Disbursement Date. The date on which the lender issues the loan check and sends it to your college.
Forbearance. The lender agrees to accept a temporary rest from loan payments, or smaller payments that were previously scheduled based on hardship.
Grace Period. The period of time before you start making payments, however the interest is still accumulating.
Interest. The cost you pay over time to use a lenders money
Lender Code. A number assigned to a lender by the US Department of Education.
National Credit Bureau. Records financial information about you as reported by creditors for loans, credit cards, and mortgages.
Principal. The amount borrowed or current amount owed on a loan, separate from interest and any associated fees.
Promissory Note. The legal document on which you (and co-signor where applicable) agree to repay the loan according to the specified terms.
Repayment. The period during which you make payments to the loan.
Servicer. A company that handles the billing, collections and deferments for a lender.
Term. The number of months or years during which you'll be repaying your loans.