Financial Aid Glossary

Academic Year

A period schools use to measure a quantity of study. Academic years vary from school to school, and even from educational program to educational program at the same school.

Accrual Date

The date on which interest charges on an educational loan begin to accrue.

Accrue

Accumulate.

Aggregate Loan Limits

A total or gross amount that may be borrowed from a specific loan program for a specific borrower.

Alternative Loans

Private education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments.

Amortization

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

Annual Percentage Rate (APR)

The interest maintained on a loan for a one-year period.

Applicant

A person who applies for or cosigns a loan.

Asset

An item of value, such as a family's home, business, or farm equity, real estate, stock, bond, mutual fund, cash, certificate of deposit (CD), bank account, trust fund, or other property or investment.

Award Letter

An official document issued by a Financial Aid Office listing all the financial aid awarded to the student. The award letter includes information about the Cost of Attendance and terms and conditions for the financial aid.

Award Year

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

Base Year

The tax year prior to the academic year (award year) for which financial aid is requested. Financial information from this year is used to determine eligibility for financial aid.

Borrower

The person who receives the proceeds of the loan.

Bursar's Office

The university office that is responsible for the billing and collection of university charges. This office is sometimes called the Student Accounts Office.

Business Day

"Business Days" are Monday through Friday, excluding (a) days when a bank in the state of Delaware or New York is required or permitted to be closed, and (b) days when the New York Stock Exchange is closed.

Capitalization

To add unpaid interest charges to the principal balance of a loan, thereby increasing the size of the loan. Interest is then charged on the new balance, including both the unpaid principal and the accrued interest. Capitalization is sometimes called compounding.

Citizen/Eligible Non-citizen

For CampusDoor.com student loans, this refers to a U.S. citizen, U.S. national, or an eligible non-citizen (generally, someone who holds an I-151 or 551 Proof of Residency Card).

Citizenship status for federal aid eligibility is defined in the student guide published by the Department of Education.

Co-Borrower

See Cosigner.

Collateral

Property that is used to secure a loan. If the borrower defaults on the loan, the lender can seize the collateral. For example, the collateral for a mortgage loan is typically the home that is being purchased.

Compounded Interest

Interest that is paid on both the principal balance of the loan and on any accrued, unpaid interest.

Cosigner

A cosigner is equally liable with the borrower for repayment of a loan.

Cosigner Release

Refers to the release of a loan cosigner from loan obligation after the borrower has made a number of consecutive on-time payments, at the borrower’s request.

Cost Less Aid

A student's unmet financial need; this amount is calculated by deducting all financial assistance the student has been or will be awarded for the loan period from the Cost of Attendance for the same loan period.

Cost of Attendance (COA)

To help students plan their educational expenses, colleges determine a Cost of Attendance (COA)-the total amount it will cost a student to go to school. Usually computed for one academic year, the COA includes tuition, fees, room and board (TFR&B), books and supplies, travel, and personal and incidental expenses. Talk to the Financial Aid Office at the school you're planning to attend if you have any unusual expenses that might affect your Cost of Attendance.

Credit Rating

A calculation that may include an analysis of payment history, a list of current and past credit accounts and their balances, employment and personal information, and a history of past credit problems.

Credit Report

A report from a credit bureau or credit reporting agency that evaluates the likelihood of a borrower to default on a loan.

Cumulative Loan Amount

The sum of all loans disbursed to a borrower. This amount must not exceed applicable aggregate loan limits. See Aggregate Loan Limits.