Are you running across financial aid terms that have you scratching your head? Below are definitions of a few terms from the U.S. Department of Education financial aid Student Guide to help you out. For more term definitions, check out: studentaid.ed.gov.
Financial Aid Package ― The total amount of financial aid (federal and nonfederal) a student is offered by the school. The financial aid administrator at a postsecondary institution combines various forms of aid (federal aid, state aid, scholarships, etc.) into a "package" to help meet a student's education costs. Using available resources to give each student the best possible package of aid is one of the aid administrator's major responsibilities. Because funds are often limited, a financial aid package might fall short of the amount a student needs to cover the full cost of attendance. Also, the amount of federal student aid in a financial aid package is affected by other sources of aid received (scholarships, state aid, etc.).
Promissory Note ― The binding legal document you sign when you get a student loan. It lists the conditions under which you're borrowing and the terms under which you agree to pay back the loan. It will include information on how interest is calculated and what the deferment and cancellation provisions are. It's very important to read and save this document because you'll need to refer to it later when you begin repaying your loan.
Default ― Failure to repay a loan according to the terms agreed to when you signed a promissory note (defined above). In many cases, default can be avoided by submitting a request for a deferment, forbearance, or cancellation and by providing the required documentation before reaching the point of default. The consequences of default are severe. Your school, the lender or agency that holds your loan, the state, and the federal government may all take action to recover the money, including notifying national credit bureaus of your default. This affects your credit rating for a long time. For example, you might find it very difficult to borrow money from a bank to buy a car or a house. In addition, the U.S. Department of Education might ask the Internal Revenue Service to withhold your U.S. individual income tax refund and apply it to the amount you owe, or the agency holding your loan might ask your employer to deduct payments from your paycheck. Also, you're liable for expenses incurred in collecting the loan. If you decide to return to school, you're not entitled to receive any more federal student aid. Legal action might also be taken against you.
Regular Student ― One who is enrolled or accepted for enrollment at an institution to obtain a degree or certificate. Generally, to receive aid from the programs discussed in the Student Guide, you must be a regular student. For some programs, there are exceptions to this requirement.
Satisfactory Academic Progress ― To be eligible to receive federal student aid, you must maintain satisfactory academic progress toward a degree or certificate. You must meet your school's written standard of satisfactory progress. Check with your school to find out about its standards.
It's important to read all financial aid documents carefully and understand their terms and conditions. The same goes for loans. You need to consider the terms of any loan—both the interest rate and when repayment is to begin. Make sure you understand everything before you sign any documents. If you have questions, ask a financial aid officer at the college for help.
Source: ACT's News You Can Use