Glossary of Financial Aid Terms

Capitalization: When the accrued interest on your loan is added to the principal (original amount) that you borrowed.

Consolidation: Combining one or more loans into a new loan and retaining the same terms and conditions.

Co-Signer: A credit worthy person who guarantees your loan if you are unable or unwilling to repay.

Credit Release: A request to obtain any remaining funds after all promissory notes and loan checks have been signed (if necessary) and posted to your account. After approval by SFS, Student Accounting Services will issue a check for you within 11 to 15 business days. To fill out this form, click here.

CSS PROFILE: An application used to determined your eligibility for institutional need-based funding. Primarily used by the Medical School but also required for some Dental students. Please visit for more information.

Default: Missing nine months of federal loan payments causing a negative impact on your credit and professional career.

Deferment: Temporary postponement of monthly loan payments for a certain length of time.  Interest does not accrue on subsidized loans.

Delinquency: Missing payments or making late or incomplete payments on a debt.

Direct or Stafford Loan: A federal loan from the Department of Education for all U.S. citizens, permanent residents or eligible non-citizens.  Other restrictions apply.  Interest on $8,500 per year can be subsidized for graduate students based on need.  The interest rate is currently set at 6.8%.

a) Subsidized: Interest does not accrue while you are in school or in deferment.

b) Unsubsidized: Interest accrues.

Direct Deposit: The deposit of funds directly into a U.S. bank account as a form of refund. To obtain a direct deposit refund, visit the Student Link, Student Account Inquiry Tab.

EFC: Expected Family Contribution: The calculated amount your family is able to finance over time as determined by the FAFSA and/or the CSS PROFILE.

FAFSA: Free Application for Federal Student Aid: A Department of Education application that allows us to determine federal need and disburse federal funding such as Direct, Perkins and Graduate PLUS Loans. Please visit for more information.

Fixed Interest Rate: Loan interest rate will not change for the life of the loan.  This means that the interest rate, and therefore, your payment amount remain the same.

Forbearance: Temporary postponement or reduction of monthly payments. Interest accrues on all loans.

Graduate PLUS: A federal credit-based loan with a 7.9% fixed interest rate.

LIBOR: London InterBank Offered Rate: An interest rate based on banks borrowing from other London based banks.  A common basis for variable interest rate loans.

Loan Repayment Options: There are several different options for paying your federal loan.

Standard – 10 year payment plan

Extended – 25 year repayment plan

Graduated – 10 year plan with gradually higher payments

Income Based – monthly payment plan based on current income

Origination Fee: A fee charged by a lender to process a loan.

Perkins Loan: A need based federal loan with a fixed 5% interest rate.

Prime Rate: An interest rate based on banks borrowing from other U.S. based banks.  A common basis for variable interest rate loans.

Principal: The original amount of a loan before any interest or penalties are added.

Promissory Note: A legal document between the lender and the borrower which sets the terms of repayment.

Variable Interest Rate: An interest rate that changes at set times and is typically based on economic indicators.

If you would like us to add any other terms, send us an email!

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