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
         


Accrued Interest
The interest that accumulates on the unpaid principal balance of a loan.



Aggregate Limit
The maximum amount of money a borrower can borrow for their entire education.



ACT
American College Testing (ACT) publishes the ACT Assessment Test, also known as the ACT. Most universities require either the ACT or the SAT as part of an application for admission.



Alternative Loans
Same as Private Loans. Student loans from private lenders that are designed to help with costs not covered by federal loans, scholarships and grants. Credit guidelines apply in determining eligibility. SunTrust offers the Custom Choice private student loan to help fill the financial aid gap.



Annual Percentage Rate (APR)
The cost of credit on a yearly basis, expressed as a percentage.



Applicant Self-Certification Form
A form required by the U.S. Department of Education and federal regulation. Students must sign and submit this form to their lender prior to receiving a private student loan. Information required on the form includes student's cost of attendance and estimated financial assistance.

Also referred to as a Borrower Self-Certification Form.

Note: For the Custom Choice Loan, this Self-Certification must be completed manually and submitted by fax.



Application and Solicitation Disclosure
A disclosure required by the U.S. Department of Education and federal regulation that is presented to the borrower and cosigner, if applicable, as part of the application process for a private student loan. The disclosure provides a range of interest rates as well as repayment examples.



Approval Disclosure
A disclosure required by the U.S. Department of Education and federal regulation that is sent to the borrower and cosigner, if applicable, after all required, acceptable documentation, if applicable, and certification from the borrower's school is received. The borrower and cosigner must proactively accept the loan terms outlined in the disclosure and have 30 calendar days to do so.



B
         


Borrower
The person who applies for and receives the loan and is responsible for repaying the loan.



Borrower Benefits Programs
Programs that recognize certain borrowers by offering a type of financial benefit, such as lowering their loans' interest rate, discounting fees, or allowing a free payment. These benefits are typically given if the borrower follows certain standards, such as making on-time payments or using automatic deduction services.



Borrower Self-Certification Form
A form required by the U.S. Department of Education and federal regulation. Students must sign and submit this form to their lender prior to receiving a private student loan. Information required on the form includes student's cost of attendance and estimated financial assistance.

Also referred to as an Applicant Self-Certification Form.

Note: For the Custom Choice Loan, this Self-Certification must be completed manually and submitted by fax.



C
         


Capitalization
This occurs when interest on your loan accrues and is periodically added to the principal. Capitalization increases your balance due. Interest is charged on the new balance, including both the principal and unpaid interest. This may increase your monthly payments on a loan. Capitalization is also called compounding.



Certification
Certification is a process where a borrower's school verifies that the borrower is eligible for the federal or private student loan amount they are requesting. Funds are disbursed directly to the school's financial aid office and credited to the student's account. Also referred to as "School Certification".



Co-borrower
The person who signs for a loan, other than the borrower, who will assume responsibility for the loan if the borrower fails to repay it. Also called co-signer.



Cosigner
The person who signs for a loan, other than the borrower, who will assume responsibility for the loan if the borrower fails to repay it.



Cost of Education (COE)
The total cost to attend a school for a specified period of enrollment. This figure is determined by the school's financial aid office, and includes tuition, room and board, books, transportation, and other related expenses. Also referred to as Cost of Attendance (COA).



Credit Agreement
A legal contract between a borrower and a lender that includes the terms and conditions for repayment. May also be called a Promissory Note.



Credit Reporting Agency
An organization that compiles credit and personal information, which is then given to creditors. The information may include history of payment, credit accounts and balances, and employment information.



Creditworthy
An applicant who has an established and active credit history at one of three major credit reporting agencies, and does not show signs of delinquent or derogatory credit.



D
         


Default
If you make no payments for 270 days on your federal loans and are not in your grace period, or if you otherwise fail to meet the terms and conditions of your loan, you're legally in default on your federal loan agreement. In this case, your lender can declare the entire amount you owe -- including interest -- as immediately due and payable.

If you fail to make any monthly payment in full on your SunTrust private student loan and are not in your grace period, or if you otherwise fail to meet the terms and conditions of your loan, you're legally in default on your private loan agreement. Defaulting on a federal or private student loan has a negative impact on your credit rating. If a federal student loan is defaulted, no other federal student loans can be obtained.



Deferment
Time frame in which you postpone repayment on your loan, under certain conditions, with permission from the lender.



Delinquency
A loan is considered delinquent if the lender has not received a borrower's full payment by the day after the payment due date.



Dependent
For someone to be considered a dependent, they must be age 23 or younger, and dependent on their parents for financial support.



Disbursement Date
The date a lender issues a check for a loan or transmits the funds to the school on behalf of the borrower or parent.



Disclosure Statement
A document that includes a straightforward statement of the actual cost of the loan being issued.



Direct Loans
A federal Direct Loan is a federal student loan made directly by the U.S. Department of Education. Generally, if you took out a federal loan or consolidated your loans after July 1, 2010, you have a federal Direct Loan. You can learn more about what type of loan you have through the National Student Loan Data System (NSLDS).



Direct Subsidized Loan
A Direct loan on which interest is paid by the federal government while the student is in school at least half-time, or during grace and deferment periods. These loans are based on financial need.



Direct Unsubsidized Loan
A Direct loan on which interest is not paid by the federal government. Unsubsidized loans are not based on financial need and may be used to finance the expected family contribution (EFC).



E
         


EFT (Electronic Funds Transfer)
The process used to wire loan proceeds directly to a school.



Entrance Counseling
A meeting or session, either with the school's financial aid office or on-line, that a student attends before receiving their first loan. During entrance counseling, the borrower acknowledges that he or she understands all the terms and obligations of their student loans.



Exit Counseling
A meeting or session, either with the school's financial aid office or on-line, that a student attends before graduation or withdrawal. During exit counseling, students review all the terms, obligations and repayment options of their student loans.



Expected Family Contribution (EFC)
The amount a family is expected to pay toward college costs. This amount is determined by a need analysis formula established by the federal government.



Extended Repayment Plan
A repayment option for federal loan borrowers who first borrowed on or after October 7, 1998, and who accumulate loans after that date that total more than $30,000. These borrowers may be able to extend their Standard or Graduated repayment plan up to a total of 25 years.



F
         


FAFSA
The Free Application for Federal Student Aid (FAFSA). This federal application is used to determine eligibility for most forms of education-related financial aid including federal student loans.



Federal Default Fee
A fee for federal student loans, which is deducted from the loan proceeds prior to disbursement and paid to the guarantee agency.



Federal Government
The government plays a key role in student lending through the Federal Direct Student Loan Program (FDSLP). Federal student loans include subsidized Stafford loans for undergraduate students, unsubsidized Stafford loans for all students, and PLUS loans for parents and graduate students. The U.S. Department of Education offers these loans directly to students.



Federal PLUS (Parent Loan for Undergraduate Students)
Parents may be eligible for this loan if their child is a dependent student. The parents must meet all credit criteria, and the loan must be certified by the school. There is no deferment of payments while the child is in school, nor is there any grace period. Parents can borrow up to the cost of education, minus any financial aid received.



Federal Grad PLUS
Similar to the PLUS loan for parents, the Grad PLUS loan is an unsubsidized federally guaranteed education loan with no annual or aggregate limits. It has no grace period and it goes into repayment as soon as the funds are disbursed to the borrower. It has the same deferment and forbearance options as the federal Stafford loan program. As such, graduate and professional students can postpone repayment using in-school deferment while enrolled at least half-time in a degree or certificate program of study.



Federal Subsidized Stafford Loan
This loan is "subsidized" because the government pays the interest while the student is in school. The government also pays the interest during any deferment, and during the six-month grace period after a student has left school or dropped below half-time enrollment.



Federal Unsubsidized Stafford Loan
Because this loan is "unsubsidized," the borrower is responsible for paying the interest from the time of disbursement. Interest payments can be made as they come due. Or, interest can be postponed and allowed to accumulate while the student is in school, for the six-month grace period and during any deferment. If the interest payments are not made, the interest accrues and is periodically added to the principal of the loan at repayment. This is known as capitalization.



Final Disclosure
A disclosure, required by the U.S. Department of Education and federal regulation, providing the final terms of a private student loan prior to funds being released. The disclosure is sent to the borrower and cosigner, if applicable, after accepting the Approval Disclosure. Both the borrower and cosigner have three business days to cancel or rescind the loan after receipt of the Final Disclosure.



Financial Aid
Funds provided to a student or their family to help them pay for education. This can include grants, scholarships and work-study programs.



Financial Aid Administrator (FAA)
A college or university employee who administers financial aid. Also called Financial Aid Advisors, Financial Aid Counselors or Financial Aid Officers.



Financial Aid Office
The office at a college or university that assists students, determines a student's financial need and awards financial aid.



Financial Aid Package
The combination of all grants, scholarships, loans, and work-study employment from all sources (federal, state, institutional, and private) offered to a student for education funding.



Financial Need
The difference between the cost of attending a particular school and a family's or student's ability to pay for it. The ability to pay is measured through the needs analysis process.



Fixed Interest
A rate of interest that doesn't change during the term of a loan.



Forbearance
An agreement the borrower enters into with the lender to postpone their repayment obligation for a period of time. At the discretion of the lender, an extension of time or smaller payments may also be arranged. Interest continues to accrue during any granted forbearance periods.



Forgiveness
Your obligation to repay all or part of a federal student loan can be canceled under certain conditions. These conditions can include total and permanent disability, death, or some military or government service.



G
         


Grace Period
A specified period of time after the borrower graduates or leaves school during which he or she isn't required to make principal payments, but during which interest may continue to accrue, depending on your loan type.



Graduated Repayment Plan
This type of plan begins with smaller payments, followed by a gradual increase in payments at specified intervals. Your interest rate and the repayment period remain the same, but you will probably pay more interest over the term of the loan.



Grant
A type of financial aid based on financial need that the student does not have to repay.



Guarantee Fee
An insurance premium deducted from the borrower's loan proceeds and paid to the guaranty agency to insure the loan.



H
         


Half-Time
Most financial aid programs require that the student be enrolled at least half-time to be eligible for aid, and some require the student to be enrolled full-time. Typically, a student must be taking at least half of the course load of a full-time student to be considered half-time. Check with your school for their specific requirements.



Holder
An institution with legal title to a borrower's loan. The holder may be the original lender, a secondary market to which the loan has been sold, or, in the case of default on a federal loan, the guaranty agency.



Home Equity Loan
Loan secured by the equity in a borrower's home. In some cases, the interest on these loans may be tax-deductible. (Please consult a tax advisor concerning tax deductibility.)



I
         


Income-Based Repayment (IBR) Plan
Under this plan, effective July 1, 2009, your monthly federal student loan payment is capped at a certain amount based on your adjusted gross income and family size. Federal Stafford, Grad PLUS, and Federal Consolidation loans are eligible for repayment under the IBR plan. A reduced payment in IBR generally extends your repayment period and you may pay more total interest over the life of the loan. This plan is arranged through your federal student loan servicer.



Income-Sensitive Repayment Plan
This plan ties the size of your monthly federal student loan payment to your income level and is adjusted based on your current income and student loan debt. Unpaid interest will continue to be added to your loan which increases the amount of debt owed. The income-sensitive plan is in effect for a period of 12 months at a time. This plan is only available for loans originated through the Federal Family Education Loan Program (FFELP).



Independent
To be considered independent, a student must meet one of the following criteria: age at least 24 years old as of January 1 of the academic year; married; a graduate or professional student; have a legal dependent other than a spouse; be a veteran of the US Armed Forces; or be an orphan or ward of the court (or was a ward of the court until age 18). A parent's refusal to support their child's education is not sufficient for the child to be declared independent.



In Repayment
The period when a borrower is repaying the principal and interest on borrowed money.



In-School Status
The period during which a borrower is in school at least half-time.



Interest-Only Payment
A payment that covers the interest owed on a loan, but not the principal owed.



Interest Rate
This is the fee charged for use of money. The interest is calculated as a percentage of the principal balance.



Interest
A fee, usually a percentage of the loan amount, that is charged in exchange for lending the money. If the interest rate (the percentage) stays the same for the term of the loan, it's called a fixed rate. If it changes periodically, for example, each year, it's called a variable rate.



J
         


No Definitions
 



K
         


No Definitions
 



L
         


Lender
An organization (usually a bank, savings and loan, or credit union) that provides the funds for student loans.



Lender Code
A six-digit federal code used to identify the borrower's student loan lender.



LIBOR
LIBOR stands for the London InterBank Offered Rate and is a rate of interest at which banks borrow funds from each other in the London interbank market. This index rate is released to the market shortly after 11:00 a.m. each day London time.



Loan
Money that is borrowed for a specific reason (funding an education, buying a car or home, etc.), and that is repaid with interest.



Loan Period
An academic term or school year for which a loan is designated.



Loan Principal
The total principal amount of money borrowed.



M
         


Master Promissory Note (MPN)
The revised promissory note which the U.S. Department of Education has authorized to be used with Stafford loans. The MPN allows the use of a single document instead of requiring borrowers to sign a new application/promissory note for additional advances. The MPN includes terms and conditions for repayment.



Merit-Based Financial Aid
Aid that considers academic, artistic, athletic or some other type of merit, as opposed to financial need.



N
         


Need
The difference between the cost of education (COE) of a school and the expected family contribution (EFC). Need is determined by your school.



Need-Based Financial Aid
Aid that depends on your financial situation. Many government sources of financial aid are need-based.



Needs Analysis
The process used to determine the amount of a student's financial need, based on detailed family financial information. A needs analysis form is required before applying for most types of financial aid. The most common federal application used to determine eligibility for financial aid is the FAFSA.



O
         


Origination Fee
The fee you pay to initiate your loan. With federal loans, this fee is paid to the government to offset administrative costs.



P
         


Packaging
The process of putting a financial aid package together. Packaging is done by the financial aid office of the school you're attending. See Financial Aid Package.



Parent Loans for Undergraduate Students (PLUS)
Federal loans available to parents of dependent undergraduate students to help finance their child's education. Parents can borrow up to the full cost of education, minus financial aid received. Applicants must meet established credit criteria.



Pell Grants
One of the largest sources of grants, Pell Grants are distributed by the federal government to help students with financial need.



PLUS Pre-Approval
A service offered to parents who wish to take out a Parent Loan for Undergraduate Students. If parents are unsure about their credit history, they can undergo pre-approval to see if they meet credit criteria.



Preliminary Scholastic Assessment Test (PSAT/NMSQT)
A test taken during the high school sophomore or junior year as practice for the SAT. PSAT scores are used to select semi-finalists for the National Merit Scholarship program.



Prepaid Tuition Plan
A college savings plan that is guaranteed to rise in value at the same rate as college tuition.



Prepayment
When a borrower pays a portion or the entire amount of principal before it is due. This may reduce the total amount of interest charged.



Prime Rate
The rate of interest charged by banks to their best or most credit-worthy customers. The prime rate is used to calculate the interest rate on many private loans.



Principal
The original amount borrowed. Interest is charged on the outstanding principal balance.



Private Loans
Education/student loans from private lenders that are designed to help with costs not covered by federal student loans, scholarships and grants. Also called Alternative Loans. Credit guidelines apply in determining eligibility. SunTrust offers the Custom Choice private student loan to help fill the financial aid gap.



Promissory Note
A legal contract between a borrower and a lender that includes the terms and conditions for repayment. May also be called a Credit Agreement.



Q
         


No Definitions
 



R
         


Repayment Finance Charge
A fee which may be added to the principal balance of a private student loan at the time the repayment period begins.



Repayment Period
The period of time during which you repay the money borrowed and interest. There are several types of repayment options for federal student loans. These options include standard, graduated, income contingent, income-based, and extended repayment. Standard and graduated repayment plans are offered for SunTrust private student loans.



Repayment Schedule
A document that discloses the monthly payment, interest rate, total repayment obligation, payment due dates, and term of the loan. The borrower receives this document from the holder of the loan when it's time to begin repayment.



S
         


Satisfactory Academic Progress (SAP)
The standard of academic performance required by the Higher Education Act in order to receive Stafford, PLUS or SLS loans. These standards are determined by a student's school.



Scholarship
A form of financial aid given to students to help pay for their education. (Scholarships are given for a student's outstanding achievement - academic, athletic, or creative.) Scholarships don't have to be repaid.



Scholastic Assessment Test (SAT)
The SAT (previously known as the Scholastic Aptitude Test) is administered by the Educational Testing Service (ETS). Most universities require either the ACT or the SAT as part of an application for admission.



School Certification
Certification is a process where a borrower's school verifies that the borrower is eligible for the federal or private student loan amount they are requesting. Funds are disbursed directly to the school's financial aid office and credited to the student's account.



Secondary Market
A company or organization that buys loans from lenders. If your loan is bought, it does not affect the original terms and conditions of your loan, but payment addresses and other details may change.



Servicer
A company contracted by a lender or holder to handle administrative aspects of the loan -- collection of payments, correspondence with borrowers, address changes, loan status updates and more. Quite often, all communication regarding a loan will be with the servicer.



Simple Interest
Interest that accrues daily based on the outstanding balance of the loan. When a payment is made toward the loan, the interest is applied before the principal.



Stafford Loans
Generally, these are federal student loans made before July 1, 2010. Stafford loans are either subsidized — the government pays the interest while you’re in school — or unsubsidized — you pay all the interest, although most students will not start making these payments until after graduation. Unsubsidized Stafford loans add the accrued interest to the loan balance, increasing the size and ultimate cost of the loan.



Standard Repayment Plan
Under this type of repayment plan for federal student loans, your monthly payment remains the same over the entire repayment period. The repayment period on a standard repayment plan is typically 10 years.

Under this type of repayment plan for private student loans, your monthly payment will depend on the amount you owe; however there is a minimum amount. As the variable rate on the loan adjusts, the monthly payment amount may increase or decrease or the number of scheduled payments may increase or decrease to enable the borrower to fully repay the loan within the remaining repayment period.



Student Aid Report (SAR)
A report that summarizes information included in the FAFSA. This form must be provided to your school's Financial Aid Office. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC).



T
         


Trade Line
Entry to a borrower's credit history maintained by a credit reporting agency. A trade line describes a consumer's account status and activity. Trade line information includes such things as names of companies where the applicant has accounts, dates accounts were opened, credit limits, types of accounts, balances owed and payment histories.



Term
The number of years (or months) in which the loan is to be repaid.



Treasury Bill
A financial note issued by the federal government to finance government spending. Treasury bills are used to calculate the interest rates on Stafford and PLUS loans.



U
         


Unmet Need
Due to budget constraints, loan limitations or other financial issues, a school's financial aid office may provide the student with less than he or she needs (as determined by the FAO). This gap is known as the unmet need.



U.S. Department of Education (ED or USDE)
The government agency that administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loan, the Federal Stafford Loans, the Federal PLUS Loan, and the Federal Consolidation Loan.



V
         


Variable Interest
An interest rate tied to a financial index that changes periodically (e.g. quarterly, annually etc.)



W
         


Work-Study
This part of the federal Student Financial Assistance provides part-time employment for students who need income to help meet education costs.



X
         


No Definitions
 



Y
         


No Definitions
 



Z
         


No Definitions