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Glossary of Terms

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529 College Savings Plans:
A 529 College Savings Plan is a state-sponsored program designed to help families save for a child's college education while offering tax benefits, flexibility, and a broad range of investment options. For more information and resources on 529 College Savings Plans, see Saving For College and the University of Alaska Savings Plan.

Accrued Interest:
The amount of interest, calculated daily, that has accumulated on the unpaid amount of your loan.

American College Testing (ACT) publishes the ACT Assessment Test, commonly known as the ACT. It is a standardized, multiple-choice test used by some colleges as part of the admissions process that is administered five times a year. The ACT measures academic achievement in four areas: English, Math, Reading, and Science.

Adjusted Gross Income:
Taxable income from all sources. (See your Federal Income Tax Form 1040 EZ, line three, or Form 1040, line 31.)

Alternative (Credit-Based) Loans:
Loans that are made to you based on your credit worthiness, as opposed to (or in addition to) Federal Stafford Loans and grants.

The reduction of loan balance by your monthly payments.

Items of financial worth which may include your home, business, savings and checking accounts, stock, bonds, real estate, trust funds, etc.

Award Letter:
This official document issued by a college's Financial Aid Office lists all of the financial assistance offered to a student. The information on your award letter is also available on UAOnline.

The person to whom a loan is made and who agrees to repay it. The borrower signs a promissory note, which serves as the formal promise to repay the loan.

A process of adding unpaid interest to the principal balance of your loan. This will increase the balance due and may increase monthly payments.

Census Date:
Is the date when student credit hours are locked in for financial aid purposes. The lock happens at 6pm on the date listed on the UAS Financial Aid website. Any adding or dropping of credits after this date may not result in changes to your financial aid package.

A signer of a promissory note who agrees to pay the loan if the Borrower defaults.

Cost of Attendance (COA):
The total amount a student must pay to attend school for one academic year, including tuition, room and board, books, supplies, transportation, and personal expenses. UAS costs for various categories of students is listed here.

Credit-Based (Alternative) Loans:
Loans that are made to you based on your credit worthiness, as opposed to (or in addition to) Federal Stafford Loans and grants.

Failure to pay your loan according to the terms disclosed on your promissory note. You are in default on a FFEL Program Loan if your payments are more than 270 days past due or if you fail to comply with other terms of the loan.

Deferment: A period of time during repayment in which the borrower, after meeting certain criteria, is not required to make their regular monthly payments. Note: interest payments may or may not be postponed depending on the type of loan.

If a payment is not received by the due date, it is considered delinquent. Delinquencies greater than 30 days are generally reported to national credit bureaus.

Disbursement Notification:
A letter that is sent to you acknowledging that your loan is approved and letting you know when the money will be sent to your school, as well as the loan amount and any fees (origination or guarantee). This marks the successful completion of the loan application process.

Disclosure Statement:
A notification of the actual cost and terms of a loan, which includes the interest rate and any additional finance charges.

Education Savings Account (IRA):
This IRA allows a related taxpayer to deposit up to $500 per year for each child under the age of 18. Interest earned on this type of IRA will be tax-free. In addition, withdrawals from an Education IRA will be tax-free as long as the withdrawals are used for educational expenses. The maximum contribution to an Education IRA is reduced on a pro-rata basis for single taxpayers with income of $95,000 - $110,000 and joint taxpayers with income of $150,000-$160,000. Above the maximum income level, the allowed contribution is zero.

EFT (Electronic Funds Transfer):
The process whereby your bank sends the loan proceeds electronically to your school, if the school participates in this program.

Eligible Citizen:
A United States citizen, U.S. national, or resident of certain U.S. territories who qualifies to borrow under the FFEL programs.

Eligible Non-Citizen:
A permanent resident of the United States who is able to present evidence from the Immigration and Naturalization Service that he or she is in the U.S. for other than a temporary purpose with the intention of becoming a citizen or permanent resident.

Estimated Family Contribution:
The EFC is an index computed from a number of data elements on your FAFSA. It is used to determine your eligibility for need-based financial aid. Although you can think of it as what the federal government has determined you and your family can contribute to the cost of your education, it is not necessarily what you have in a bank account, nor is it a balance you owe the university. You can obtain a low-cost Unsubsidized Stafford loan (one that is not based on financial need), even with a high EFC.

The Free Application for Federal Student Aid (FAFSA) is a standard federal form used to determine your eligibility for most types of financial aid including Federal Government backed loans. The FAFSA is typically completed early in the year and it requires income, asset, and tax information from the students and/or parents. You will need the school code for UAS, 001065.

Federal Family Education Loan (FFEL) Program:
A loan program authorized by the Federal Government in the Higher Education Act of 1965, as amended. This program includes Federal Stafford, PLUS and Consolidation Loans. These loans are funded by lenders, guaranteed by guaranty agencies and ultimately insured by the Federal Government.

Federal Work Study
Federal Work Study is part-time employment that is considered a part of your financial aid package. It's a great way to keep your loans down. In order to qualify for Federal Work Study, indicate your interest on the FAFSA (or Free Application for Federal Student Aid - you'll need to know the UAS School Code, 001065). The amount of wages you are eligible to receive is a function of your costs of attendance less all of your other financial aid. Currently, Federal Work Study positions are available only at the Juneau campus. Any student employment position there can qualify as Federal Work Study. Apply for a position, and when you are hired, inform the Financial Aid Office so we can incorporate your position as a part of your financial aid.

In addition, as part of the America Reads Challenge, we have a number of reading tutor and math tutor positions available at the local elementary schools and family literacy center - this is an excellent opportunity to gain experience teaching and to help a child learn necessary skills.  Contact the Financial Aid Office for details.

Financial aid
Financial aid is funding used to pay for educational expenses. It can take the form of not only funding that does not have to be repaid, such as grants and scholarships, but also loans or part-time employment. If you are unable to receive money from one source, ask us about other options.

A temporary postponement of principal and interest payments during which the borrower may only pay the interest on the loan. If the borrower chooses not to pay the interest, it will be capitalized at the end of the period.

Financial Aid Package:
The total amount of monetary assistance available to the student including all grants, scholarships, work-study and loans available from school, state and federal and alternative programs, as listed in a college's financial aid award letter.

Financial Need (or Need-based Aid Eligibility):
The difference between the total cost of attendance and the Expected Family Contribution.

Federal Supplemental Educational Opportunity Grants (FSEOG):
Government grants distributed by colleges, at their discretion, to students based on need. At UAS, FSEOG grants are awarded on a first-come, first-served basis to those students demonstrating the greatest financial need.

Good through Date for Payoff:
The date your payoff amount should arrive at the lender or servicing agent.

Grace Period:
An amount of time allowed before principal repayment of a loan must begin after a student graduates, leaves school or drops below half-time status. No payments on your student loans are required during this time. Details of your grace period are specified in your promissory note and are not available for all loans. For federal and state loans, the grace period is 6 months.

A form of financial aid, similar to scholarships, that do not have to be repaid.

Gross Income:
Your income before taxes and deductions.

Guaranty Agency:
A state or non-profit organization, which has an agreement with the Secretary of Education under the Higher Education Act to insure student loans made by lenders.

HOPE Scholarship Tax Credit:
This tax credit is available to those taxpayers who are paying education expenses for students enrolled in their first two years of college. The Hope Tax Credit is available for up to 100% of the first $1,000 of qualified tuition and related expenses (i.e. tuition and fees, but not room and board and books) and 50% of the second $1,000. The Hope Scholarship Tax Credit is for expenses paid after December 31, 1997. It will be reduced on a pro-rata basis for those who file a single tax return with incomes of $40,000-$50,000 and for those who file joint tax returns with incomes of $80,000-$100,000. (Single return tax filers with incomes of $50,000 and joint return tax filers with incomes of $100,000 and above will not be eligible for a deduction.) The Hope Scholarship Tax Credit is part of the Taxpayer Relief Act of 1997.

The fee charged to borrow money, usually a percent of the outstanding amount, which accrues and is paid over the life of a loan.

Late Fee:
An administrative charge that a lender may assess if a student loan payment is not received within 15 days after its due date.

Lifetime Learning Tax Credit:
The Lifetime Learning Tax Credit is available to people beyond the first two years of undergraduate studies, graduate students or working U.S. citizens taking classes to improve or upgrade their job skills. It can be used for qualified tuition and related expenses (i.e. tuition and fees, but not room and board and books) paid by the taxpayers. The tax credit equals 20% of the first $5,000 of expenses paid by the taxpayer after June 30, 1998 through December 31, 2002 and 20% of the first $10,000 after January 1, 2003. The tax credits are reduced on a pro-rata basis for single return tax files with incomes of $40,000 - $50,000 and for joint return tax filers with incomes of $80,000 - $100,000. (Single return tax filers with incomes of $50,000 and joint return tax filers with incomes of $100,000 and above will not be eligible for a deduction.) The Lifetime Learning Credit is part of the Taxpayer Relief Act of 1997.

A sum of money borrowed (principal) usually for a specific reason (e.g., to obtain an education, buy a car, etc.). The entity lending the money (e.g. a bank) usually charges interest for use of the money. The amount of money borrowed is typically repaid with interest over a period of time.

Master Promissory Note (MPN):
Master Promissory Note refers to the revised promissory note which the Department of Education has authorized to be used with Stafford loans beginning 7/1/1999. It allows lenders to use a single MPN instead of requiring borrowers to sign a new promissory note for additional advances.

Multiple Disbursements:
Loan proceeds that are paid in more than one check or electronic transaction. For example, a portion of a loan may go towards the first semester of school and the balance for the second semester.

Origination Fee:
A sum charged by the Federal Government on FFEL loans to offset the cost of processing the loan. The amount of the fee is deducted from the dollar amount of your loan by the lender and paid to the U.S. Department of Education.

Payment Schedule:
A summary of the terms of a loan, which includes the total principal amount, the date payment begins and the interest rate.

Payoff Balance:
This is the total amount you would owe if you were to pay off your entire loan. It includes the outstanding principal plus any unpaid accrued interest.

Pell Grants:
One of the largest sources of grants, Pell Grants are distributed by the Federal Government and are designed to help students with financial need pay for college.

PLUS (Parent Loans for Undergraduate Students):
These are loans under the FFEL program for parents of dependent undergraduate students. They require a credit check. The interest rate is low and repayment begins 60 days after disbursement.

The dollar amount of the loan that must be repaid upon maturity, and upon which interest will be charged.

Principal Balance:
The outstanding amount you owe, excluding accrued but unpaid interest.

Promissory Note:
The binding document a borrower signs to obtain a loan. The note includes all the terms and conditions of the loan and the borrower's promise to repay the loan with interest.

Repayment Period:
This is the amount of time during which you repay the money borrowed plus interest.

529 College Savings Plans:
A 529 College Savings Plan is a state-sponsored program designed to help families save for a child's college education while offering tax benefits, flexibility, and a broad range of investment options. For more information and resources on 529 College Savings Plans, see Saving For College and the University of Alaska Savings Plan.

Scholarships, like grants, are a form of financial aid that do not have to be repaid. These are available from many sources including community groups, schools and private corporations. Scholarships can be awarded based on a variety of criteria including scholastic achievement, hobbies and college majors.

The Scholastic Aptitude Test (SAT) is a seven-section, three-hour exam that is administered seven times a year. Three of the sections are verbal, three are math, and one is experimental. The experimental section can be either verbal or math. It is used by the test-makers for research purposes only and will not count toward your final score.

Stafford Loan:
Loans under the FFEL program awarded on the basis of financial need. They may be subsidized or unsubsidized. These loans can be made from a bank, credit union or other eligible lender or obtained directly from the government under the Federal Direct Lending Program.

Indicates the condition of your student loan. Examples would include "in school" (i.e., you are deferring payments because you are in school) and "repayment."

Student Aid Report (SAR):
A report sent to a student by the government 4-6 weeks after submitting a FAFSA. The report informs the student of the Expected Family Contribution (EFC) and the financial aid for which the student is eligible. College financial aid offices use the report information to build a financial aid package for a student.

Student Loan Interest Deduction:
Eligible taxpayers may deduct on their federal income tax return the amount of interest they have paid during the tax year on any qualified education loan for the period of time as defined by law. The deduction applies to interest paid after December 31, 1997 and is phased out for single taxpayers with incomes of $40,000-$55,000 and for joint taxpayers with incomes of $60,000-$75,000. Single return tax filers with incomes of $55,000 and joint return tax filers with incomes of $75,000 and above will not be eligible for a deduction. (Qualified education expenses generally include tuition, fees, room and board.) The Student Loan Interest Deduction is part of the Taxpayer Relief Act of 1997.

Subsidized Loan:
Loans on which the government pays the interest for a student while enrolled in school at least half-time and during periods of grace and deferment (i.e. Subsidized Federal Stafford Loan).

91-day T-Bill:
Refers to the auction rate determined for 91-day Treasury Bills by the public auction held by the United States Treasury Department. The interest rates for Stafford and PLUS loans are tied to the auction rates held at certain times of the year. The rate(s) can be obtained from the Treasury Department, but is also available in many newspapers including The Wall Street Journal.

Unsubsidized Loan:
A loan on which the borrower is always responsible for paying the interest while in-school and during deferment, forbearance and grace periods. (i.e. Unsubsidized Federal Stafford Loan or Federal PLUS Loan).

Variable Interest:
Interest rates that change periodically (e.g. quarterly, annually etc.). The interest rates for Federal Stafford and PLUS Loans are set by the government each year and change annually on the first of July. CitiAssist Loan rates change quarterly.

See Federal Work Study.

This is an IRS form which taxpayers use to certify that loans meet the definition of qualifying education debt and which allows lenders to report to the IRS the amount of interest paid on student loans as interest which qualifies for possible


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