Programs administered by ISU, using annual federal allocations. They include Federal Supplemental Educational Opportunity Grants (FSEOG), Federal Work Study and Federal Perkins Loans.

Capitalization

The process of adding unpaid interest to the principal balance of an educational loan, thereby increasing the total amount to be repaid.

Central Processing System

Federal offices in Iowa or Illinois that receive FAFSA data, check students' eligibility, and compute Expected Family Contributions (EFC).

Citizen/ Eligible Non-citizen

United States immigration status you must have in order to receive federal student aid.

Consolidation Loan

A loan program that allows a borrower to combine various educational loans into one new loan. By extending the repayment period (up to 30 years depending on the loan amount) and allowing a single monthly payment, consolidation can make loan repayment easier for some borrowers. But since interest rates can be higher after this procedure, it is not recommended unless absolutely necessary.

Cost of Attendance (COA)

An estimate of a student's tuition, fees, books, room, board, transportation, and personal costs related to attending ISU. This is typically the maximum amount of aid a student can receive in a term. Aid received in excess of this limit must be returned to its source. (Same as Budget.)

Default

If a student loan borrower doesn't make payments for 270 days, he or she is considered in default. The federal government takes over collection of their student loan. This isn't pretty! If you default, your school, the organization that holds your loan, the state, and the federal government can all take action to recover the money, including notifying national credit bureaus of your default. Your wages and/or tax returns may be garnished, and you will no longer be eligible to receive federal financial aid.

Deferment

Temporary postponement of loan payments. Interest on unsubsidized loans continues to accumulate during deferment.

Dependent student

Any student who doesn't meet the US Department of Education’s definition of an independent student is dependent. The parents' income is included in calculations of need and parental signatures are required on the FAFSA and verification documents.

Disbursement

The release of loan funds to the school for delivery to the borrower. Disbursements for most loans are made in equal multiple installments. (Example: Half at the start of fall term, half at the start of spring term.) If a loan is for a single term, the disbursements are half at the term start and half at the semester mid-point.

Eligible Program

A course of study that leads to a degree or certificate and meets the U.S. Department of Education’s requirements for student enrollment in order to receive financial aid.

Entrance/ Exit Interviews

Counseling sessions borrowers are required to complete before receiving their first loan disbursement (Entrance) and before leaving school (Exit). These requirements are intended to inform borrowers about their rights and responsibilities with regard to borrowing student loans. They may be completed on the internet.

Expected Family Contribution (EFC)

The amount the federal government expects a student and family to contribute toward the cost of attendance, based on the family's income and assets as reported on the FAFSA. Also known as total family contribution (TFC). The Budget minus the EFC determines the student's financial need.

FAFSA

The Free Application for Federal Student Aid is the form a student must file to receive most aid. Best completed on the Internet at www.fafsa.ed.gov by March 1^st prior to college attendance in the fall, but can be completed at other times if needed. (Remember that a new FAFSA is required every year!)

Federal Family Education Loan Program (FFEL)

Education loans provided by private lenders and guaranteed for repayment by the federal government. Subsidized and Unsubsidized Federal Stafford Loans and Parent PLUS loans are included in this category.

Federal Work Study (FWS)

Student work opportunities paid partially or entirely by the federal government. Employment can be either on or off campus. Employment is usually limited to a twenty hour per week maximum, except during the summer semester and periods between terms.

Financial Aid

Any grant, scholarship, Federal Work Study or student loan offered to help pay for educational costs.

Financial Aid Administrator (FAA)

A representative of the Student Financial Aid Office.

Financial Aid Notification Letter

A notice for students that lists aid awarded and tells students what to do next.

Financial Aid Package

The total of all types of financial aid a student receives. Federal and non-federal aid such as grants, loans, work study, and scholarships are combined into a "package" to help meet the student's need.

Financial need

The difference between a student's Expected Family Contribution and Cost of Attendance. This determines if the student is eligible for need-based aid.

Forbearance

An authorized temporary postponement or reduction in student loan payments granted by a lender. May apply to principle, interest or both. Interest continues to accumulate. A forbearance may be granted at the lender's discretion when a borrower is willing to repay their loan but is unable to do so.

Free Application for Federal Student Aid (FAFSA)

The application a student must file to receive most aid. Best completed on the Internet at www.fafsa.ed.gov by March 1^st prior to college attendance in the fall, but can be completed at other times if needed. (Remember that a new FAFSA is required every year!)

FSEOG

Federal Supplemental Educational Opportunity Grant is a limited need-based fund awarded to some recipients of large Pell Grants. This award is commonly referred to as SEOG.

Full-time enrollment

Undergraduate: 12 or more credit hours. Graduate: 9 or more credit hours in a semester.

Grace Period

The period between when a borrower leaves school or drops below half-time enrollment and when they are obligated to begin repaying their loans. This is usually six months for Federal Stafford Loans and nine months for Federal Perkins Loans.

Graduated repayment

A direct loan repayment plan in which payments are smaller at the start and gradually become larger.

Guarantee Agency

The organization that processes the government backing on federal student loans.

Half-time enrollment

Undergraduate: 6 - 8 credit hours. (For Pell Grants)

Undergraduate: 6 - 11 credit hours. Graduate: 5 - 8 credit hours. (For most other aid)

Income contingent repayment

A repayment plan for Stafford Loans in which payments don't exceed 20 percent of discretionary income.

Independent student

A student is independent if he or she is any of the following:

at least 24 years old by December 31 of the first year of the award
married
a graduate or professional student
a veteran
an orphan
a ward of the court (not incarcerated)
someone with legal dependents other than a spouse that they financially support at least 50%

Interest

A fee charged for the use of borrowed money. Interest is calculated as a percentage of the principal loan amount. The rate may be constant throughout the life of the loan (fixed rate) or it may change at specified times (variable rate). As of October 1, 1992, all Federal Stafford and PLUS education loans made to new borrowers have variable interest rates.

Lender

A financial institution (bank, savings and loan, or credit union) that provides the funds for students and parents to borrow educational loans.

Master Promissory Note

A legal document a borrower must sign to obtain a loan. By signing, the borrower agrees to repay the loan as described in the promissory note.

National Student Loan Data System (NSLDS)

A database of all students who have received federal aid. Maintained by the U.S. Dept. of Education and updated by schools that award aid.

Need

The difference of a student's Cost of Attendance minus their Expected Family Contribution.

Needs Analysis

A process of reviewing a student's aid application to determine the amount of financial aid for which a student is eligible. For federal aid, the needs analysis form is the FAFSA. However, for other aid contributors like scholarship donors, a separate needs analysis form may be required. The donor typically supplies those.

New Borrower

A borrower who has no outstanding (unpaid) loan balances on the date (s)he signs the promissory note for a specific educational loan. New borrowers may be subject to different regulations than borrowers who have existing loan balances, like needing to complete an Entrance Interview.

Origination Fee

A fee charged by the federal government and deducted from loan proceeds before disbursement to partially offset administrative costs of the loans. Most lender fees have been 3 - 4% for Stafford and PLUS Loans.

Parent Contribution

The part of the EFC that represents what the parents are expected to contribute.

Pell Grant

The largest federal student aid grant program. Over $7,000,000 paid annually to ISU students.

PLUS loan

The Federal Parent Loan for Undergraduate Students is possible for the parents of dependent students to apply for. Proof of credit worthiness is required for funding. If a parent is denied this aid, their dependent student may qualify for an additional Federal Unsubsidized Stafford Loan.

Principle

The amount borrowed on a student loan. Interest is charged on this amount, and origination fees will be deducted based upon this amount prior to disbursement.

Promissory Note

A legal document a borrower must sign to obtain a loan. By signing, the borrower agrees to repay the loan as described in the promissory note.

Regular Student

Student who is enrolled at ISU to obtain a degree, certificate, complete preparatory work to begin their degree pursuit or is seeking their first Teacher Certification.

Repayment Schedule

Information sheet from a student loan borrower's lender which discloses the monthly payment, interest rate, total repayment obligation, due dates and length of time for repaying the loan.

Satisfactory Academic Progress (SAP)

A standard that measures completion rate, grade point average, and number of hours taken. Students must meet the minimum standards to receive aid.

Secondary Market

An organization established to purchase education loans from lenders. This allows lenders to replenish capital to fund new loans. Selling loans is a common practice among lenders and does not affect the terms and conditions under which the loan was originally made.

SEOG

This is the short name for the Federal Supplemental Educational Opportunity Grant. It is a limited need-based fund awarded to some recipients of large Pell Grants.

Selective Service Registration

A requirement for all males who were born on or after January 1, 1960, are at least 18 years old and are not currently serving in active duty in the U.S. Armed Forces in order to receive federal financial aid. Registration can be attempted at www.sss.gov. (Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau are exempt from registering.)

Servicer

A loan processing center, which receives loan repayments from borrowers.

Statement of Educational Purpose

A statement in which a financial aid recipient promises to use financial aid funds for education costs only. The statement is part of the FAFSA.

Student Aid Report (SAR)

A document the Central Processing System sends to the student as a response to completing the FASFA. It contains information the student reported on the FAFSA. The student should contact the Office of Student Financial Aid if any information on their SAR is incorrect.

Student Contribution (SC)

The part of the EFC that represents what the student is expected to pay.

Subsidized Stafford Loan

A federal loan for students that requires financial need. No interest is charged until the student enters repayment.

Summer Information Request Form (SIRF)

A short form students use to apply for summer aid. It is available in the Student Financial Aid Office during spring and summer semesters.

Supplemental Educational Opportunity Grant (SEOG)

A limited need-based fund awarded to some recipients of large Pell Grants.

Unmet Need

The amount of financial aid eligibility that is not filled by aid sources. COA-EFC= unmet need.

Unsubsidized Stafford Loan

A federal loan for students that does not require financial need. Interest is charged from the time the loan is disbursed, but payment on principle is delayed until the student enters repayment.

Verification

A process of accuracy confirmation that requires some students to verify information they provided on the FAFSA. Aid is not awarded until this is done if required.

Work Study (FWS)