Federal Student Aid

Terminology 

  • Graduate student - Student who obtained a bachelor's degree.

  • Student Financial Aid Report (SAR) - Form that students receive after submitting a free application for federal student aid

 

  • Service Agency - Agency designed to track and offer services to borrowers related to their student loans.

 

  • Cancellation - Release of the responsibility that the borrowers must reimburse all or part of their loans. Borrowers must meet certain requirements to be entitled to cancellation.

 

  • Deferment - Postponement of payments, temporarily and you must contact the agency to grant it.

 

  • Cancellation of 100% of the student loan - Free borrowers of their loan payment obligations. The borrower may be eligible for an acquittal in the following cases: total and permanent disability or death of the borrower, the sudden closure of the educational institution and fraudulent certification and identity theft.

 

  • Loan Forgiveness to Public Service Employees - remaining loan balance- (100%). In certain cases, the loan can be cleared by bankruptcy.

 

  • Capitalization - When in an unsubsidized loan the interest is not paid as accumulated during the studies, a grace period, an extension or a temporary suspension of payment, the lender can capitalize them. This increases the amount owed on the capital of a loan and can increase the monthly payment. Interest is then charged on that higher capital balance, which increases the overall cost of the loan.

 

  • Consolidation - Combination of several educational loans into a new loan with a single payment and a fixed interest rate.

 

  • Expected Family Contribution (EFC) - Approximate amount by the Federal Government, through the FAFSA application process, in which the family must contribute the cost of the education, based on income, assets, the number of university students, the family composition, among others.

 

  • Cost of Attendance (COA) - Amount that will cost a student to attend an educational institution for one academic year. It is determined using the rules established by the Congress of the United States. Includes tuition, fees, housing, meals in the school, books, materials, transportation, loan fees and other related to studies.

 

  • Origination Fee (Fees) - Origination fee charged by the federal government to offset the cost of processing the loan, which is deducted from the amount payable on the loan.

 

  • Delinquency - Failure to pay a federal student loan, in accordance with the terms established when the Payment Agreement (MPN) was signed.

  • The annual cost of studies - Amount that will cost a student to attend an educational institution for one academic year. It is determined using the rules established by the United States Congress. Includes tuition, fees, lodging, meals in the school, books, materials, transportation, loan fees and costs related to their studies.

 

  • Date of disbursement - Date on which the money was disbursed to the educational institution. By regulation of the Federal Education Department, the loan must have two disbursements, no matter the semester in which it is requested.

 

  • Loan date - Date on which the lender approved the loan.

 

  • Default – this occurs when a borrower of a loan has been in default for 270 days due to lack of payment to the account. Upon exceeding 360 days, the loan is prepared for transfer to the debt collection service. If you default on payment, you can suffer serious legal consequences.

 

  • Forbearance - is an agreement designed to postpone or temporarily reduce the monthly payment of the loan. During this agreement, interest continues to accrue to the principal.

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