Glossary of Terms

A   C   D    E   F   G   L    N   P   R   S   T

The process where the entire principal balance, plus interest and other costs, is due and payable immediately as a result of non-payment of the debt. This process generally occurs when a loan is placed with an external collection agency.           [Back to Top]

Accrue/interest accrual
The process where interest accumulates on the unpaid principal balance of your loan.      [Back to Top]

Campus-Based Student Loans include Federal Perkins, NDSL, Health Professions, Nursing and Institutional Loans.      [Back to Top]

A borrower may have all or part of his or her loan (including interest) cancelled for engaging in public service such as teaching, service in the education component of a Head Start program, service in the Peace Corps or ACTION, or service in the military. Cancellation is also granted in case of the borrower's death, total and permanent disability, or - in some cases - bankruptcy.      [Back to Top]

Capitalizing interest
Adding unpaid, accumulated interest to the principal balance of a loan, the amount borrowed. For instance, the borrower can pay the interest on an unsubsidized loan as it accrues or the borrower can have the interest capitalized at the time the borrower's status changes, such as going into repayment.      [Back to Top]

Consolidation is the process of making loans to borrowers for the purpose of consolidating their repayment obligations(s) into a Consolidation Loan with new and more manageable repayment terms.      [Back to Top]

Credit Bureau
A credit bureau is a national reporting agency (such as Experian, Trans Union, Equifax) that stores information on consumers regarding debts owed and payment history. Federal Regulations require Campus-Based Student Loans to be reported to at least one national credit bureau. For institutional loans, please refer to your promissory note.      [Back to Top]

Default is the failure to repay a loan in accordance with the terms of the promissory note. Default of a loan only occurs after many other collection efforts have been made. If not corrected your credit will be adversely affected.      [Back to Top]

A borrower is entitled to have the repayment of a loan deferred under certain circumstances. A deferment is a period of time during which the borrower is not required to repay the loan principal. Interest will not accrue during any type of deferment except a hardship deferment.       [Back to Top]

This means that payments on your account have become past due. This occurs when your payment is not received by the due date on your bill or coupon. An account remains delinquent until you bring the account current with a payment, deferment, or forbearance.       [Back to Top]

Department of Education
The governing body for the Federal Perkins/NDSL program.       [Back to Top]

Department of Health and Human Services (DHHS)
The governing body for the Health Professions and Nursing Student Loan programs.       [Back to Top]

A written notice of certain terms and conditions of the loan.       [Back to Top]

Due Diligence
Due Diligence is the procedure required for attempting to satisfactorily resolve a delinquency and prevent default. Loan agencies are required to use collection attempts that include telephone calls and past due letters.       [Back to Top]

Enrollment Status
The status of a student as reported by the student's school. The status is dependent upon the number of credit hours a student is carrying.      [Back to Top]

Exit Interview
The meeting held between a borrower and lending institution before graduation or withdrawal. This interview is required and is intended to provide borrowers with information regarding rights and obligations as a loan recipient.       [Back to Top]

Free Application for Federal Student Aid. The form the student must complete to apply for Title IV financial assistance.       [Back to Top]

Fixed Interest Rate
A rate of interest, which does not change during the life of the loan.       [Back to Top]

A period of time during which payments are temporarily postponed or reduced due to financial difficulties.       [Back to Top]

Grace Period
A period of time (generally six or nine months) that begins immediately after the borrower ceases to be enrolled as at least a half time student. Eligibility for a grace period depends on the type of loan that you received, therefore, please consult your promissory note.       [Back to Top]

Late Charge
The fee that may be assessed to a borrower's account if payments are not made on time, or a deferment/cancellation form is not submitted in a timely manner.       [Back to Top]

Lender is the bank, savings and loan, credit union, school, or other approved entity from which funds for a student loan have been obtained.       [Back to Top]

Loan Fee
A fee charged for Direct Loans and Federal Family Education Loans and is subtracted from the loan money before it is disbursed to the borrower.             [Back to Top]

The National Student Loan Data System is a central depository of student loan information. With data provided by lenders, guarantors, schools and agencies, institutions are able to review a borrower's lending and enrollment history.       [Back to Top]

A temporary cessation of payments while a borrower is performing a service that will qualify him or her for partial cancellation of a Perkins, NDSL or Defense Loan.       [Back to Top]

Prepayment is any amount paid in excess of the amount due on your loan. Prepayments are always applied to interest due first and then to principal.       [Back to Top]

Promissory Note
Promissory Note is a legally binding agreement the borrower (and co-marker or endorser, if applicable) signs to obtain a loan, in which the borrower promises to repay the loan, with interest and other applicable fees, in periodic installments. The agreement also includes other conditions respective to the individual loan type.       [Back to Top]

Repayment Plan
The terms by which you repay your loan as indicated in your promissory note.       [Back to Top]

Separation Date
The date you were last enrolled in school at least half time. The separation date is used to determine when your grace period begins and the date your first loan payment will become due.       [Back to Top]

Tax Relief Act (TRA97)
The Tax Relief Act of 1997 provides for several tax benefits for parents and students. The act allows borrowers to deduct student loan interest paid within the first 60 months of repayment. Payments made beginning January 1, 1998 can be deducted on 1998 tax returns filed in 1999. The deductions is limited to ,000 in 1998, ,500 in 1999, ,000 in 2000 and ,500 thereafter. The interest deduction can not be claimed for any interest amount paid prior to January 1, 1998.
The Hope Scholarship and Lifetime Learning Credit will be available as a credit against federal income taxes beginning with 1998 tax returns. We advise you to consult your tax advisor to determine your eligibility for the deduction and tax credit.       [Back to Top]

Go to infiNET's Web Site