The time period that students attend an educational institution, usually from August to May, or nine months. An academic year is one complete school year at the same school, or two complete, half years at different schools.

The demand for immediate repayment of the entire outstanding balance of a loan.

Interest that builds up over time. During repayment, interest accrues on student loans every day, and (depending on the loan type) interest may accrue while loans are in deferment. If a borrower doesn’t pay the accrued interest, the interest may be added (or capitalized) into the principal balance, upon which the unpaid interest will also be charged interest.

The process of paying off a loan over time through regular payments.

The cost of borrowing money, expressed as a percentage. The APR includes both the interest rate and any fees associated with the loan.

The amount of income, including wages, salaries, bonuses, tips, investment income, and unearned income, used to determine how much tax you owe in a given year.

A person who takes out a loan with a signed agreement to pay it back over a specified period of time.

The addition of unpaid interest to the principal balance of a loan, which increases the total amount you owe.

Expenses charged on defaulted federal student loans. Collection costs are added to the outstanding principal balance of the loan.

Combining multiple loans into a single loan, generally to simplify repayment or obtain a fixed interest rate.

Someone who signs a loan with the primary borrower and agrees to be responsible for the loan if the primary borrower fails to make payments.

The cost of your education, including tuition & fees, housing & meals, books & supplies and other expenses.

A record of a borrower's past borrowing and repayment behavior. Your credit history shows your ability to pay back debts, whether it be credit card bills, student loans, or a mortgage.

A summary of a borrower's credit history. Your credit report includes all of the credit-related data a national credit reporting agency (NCRA) has collected about you from different sources.

A three-digit number that is used to assess a borrower's creditworthiness. Lenders use your credit score to determine your likelihood of defaulting on payments you owe. Your credit score is based on several factors, including payment history, credit utilization, length of credit history, and new credit inquiries.

Learn More: How Credit Scores Work

CSS is a form used, in addition to FAFSA, by about 250 selective institutions to determine private scholarship eligibility.

The amount of debt a borrower has compared to their income.

Failing to repay a loan according to the terms agreed upon. This can have serious financial and credit consequences.

A period of time during which borrowers are allowed to temporarily stop making payments on their student loans.

A loan becomes delinquent when loan payments are not received by the due dates. Delinquency can lead to default.

The process by which loan funds are provided to the borrower or school.

Discharge relieves the borrower from having to repay some or all their federal student loan debt and is available due to certain circumstances including death, disability, a school’s closure, and fraud.

• In the event of total and permanent disability of the borrower, federal student loans can often be discharged through a total and permanent disability (TPD) discharge. There is a special process to make this disability determination. The U.S. Department of Education website provides further details.
• Death. Federal student loans do not transfer to another person if you die. Your relatives can notify the loan servicer, and the loans will be canceled.

Note: Borrowers with private student loans should check the terms and conditions of your loan or contact their loan servicer for more details.

Enrollment status is reported by the school and indicates whether a student is or was full-time, three-quarter time, half-time, less than half-time, withdrawn, graduated, etc.

Exit counseling provides important information to prepare student loan borrowers to repay federal student loan(s), and ensure they understand their student loan obligations. Borrowers must complete exit counseling when they leave school or drop below half-time enrollment.

FAFSA is the main form students and families fill out to apply for federal student loans and grants.

Allows borrowers to combine multiple federal student loans into one loan, simplifying repayment.

Offered to graduate or professional students and parents of dependent undergraduate students. Borrowers do not need to demonstrate financial need, but a credit check is required.

Available to undergraduate, graduate, and professional students. Unlike subsidized loans, borrowers are responsible for the interest that accrues during all periods.

FFEL is a retired student loan program for which some borrowers are still in repayment. FFEL loans are no longer originated.

Aid from the government in the form of grants, loans, and/or work-study to assist students with college or career school. To apply for federal student aid, a student must complete the FAFSA® form.

Loans funded by the federal government, typically with terms and conditions that are more favorable than private loans.

Need-based grants for undergraduate students with exceptional financial need. Priority is often given to students who receive Federal Pell Grants.

Money to help a student pay for college or career school.

An interest rate that does not change over the life of the loan.

A temporary postponement or reduction of payments for a period of time because of the borrower's financial difficulty. You can ask for forbearance if you are experiencing financial difficulty.

A new program introduced by the Department of Education designed to aid defaulted student loan borrowers.

Learn More: FAQs for the Student Loan Fresh Start Program

A set period of time after you graduate, leave school, or drop below half-time enrollment before you must begin repayment on your loan.

A grant is a type of financial aid that does not have to be repaid. (See below for the different types of grants)

An organization that takes on the responsibility to pay the bank if a borrower defaults on a loan.

A federal student loan repayment program that adjusts the amount you owe each month based on your income and family size.

A repayment plan for Direct Loans in which monthly payments are the lesser of (1) what you would pay on a repayment plan with a fixed monthly payment over 12 years, adjusted based on your income or (2) 20% of your discretionary income. Eligible loans include Direct Loans other than those in default and parent PLUS loans. Consolidating a Federal Perkins Loan, FFEL Program loan or Direct PLUS Loan made to a parent may also make you eligible for ICR.

Income-Driven Repayment plan is the general term for plans that can lower monthly bills based on income and family size. You must submit info on your income and family size each year to stay enrolled. (Note: Income-based repayment refers to a specific type of plan.)

Income-Driven Repayment Plans include:

• Saving on Valuable Education (SAVE)
• Pay As You Earn (PAYE)
• Income-Based Repayment (IBR)
• Income-Contingent Repayment (ICR)

Learn More: What is the SAVE Plan for Student Loans?

Money paid by a borrower to a lender for the use of borrowed money.

A lien that gives a creditor the legal right to keep property when the owner fails to pay a debt. It can only be granted by a court. A student (or parent in the case of a parent borrower) with a judgment lien will not qualify for federal student aid.

An entity (like a bank, financial institution, or the federal government) that provides funds to borrowers.

When you consolidate your student loans, you are actually taking out a new loan. Consolidation allows you to combine several student loans into one larger loan.

Entrance counseling ensures a borrower understands the terms and conditions of the loan, as well as their rights and responsibilities. Borrowers learn what a loan is, how interest works, repayment options, and how to avoid delinquency and default. All federal student loan borrowers must complete loan counseling to inform them about how their loans work.

Student loan forgiveness is offered to encourage certain types of employment. A loan may be fully or partially forgiven after a certain number of years of qualifying employment.

Related: Student Loan Forgiveness News: Unpacking the $9 Billion Debt Cancellation and Other Paths to Relief

A company that handles loan administration such as billing, processing payments, and answering questions.

A legal document that contains the Borrower’s Rights and Responsibilities and Terms and Conditions for repayment. Access the MPN at: https://studentaid.gov/mpn.

Negotiated rulemaking is a process required under the Higher Education Act in which the Department of Education works with stakeholder representatives to develop regulations that are informed by the interests of all stakeholders.

A borrower who has no outstanding balance on a Direct Loan or Federal Family Education Loan (FFEL) Program loan when he or she receives a Direct Loan or FFEL Program loan on or after a specific date.

The lender that provides a student loan.

An origination fee is a percentage of your loan amount charged by the lender for the processing of your loan.

An eligibility requirement under the Income-Based Repayment and Pay As You Earn repayment plans. For more information, go to Repayment Plans.

An income-driven repayment plan with monthly payments that are generally equal to 10% of your discretionary income, but never more than the 10-year Standard Repayment amount.

Need-based grants awarded to low-income undergraduate students. Does not have to be repaid, unless, for example, a student withdraws early from a program.

Perkins loans were 5% fixed-rate federal student loans. The program ended in 2017, but Perkins loans are still mentioned sometimes because many borrowers are still in repayment.

The amount of money borrowed or remaining unpaid on a loan. Interest is charged as a percentage of the principal.

Private student loans are any student loans that are not federal student loans, and are neither funded nor subsidized by the federal government. A non-federal loan made by a lender such as a bank, credit union, or private company. Private student loans are funded by banks, credit unions, state loan programs, or other types of lenders.

Learn more about the differences between federal and private student loans: Navigating Federal and Private Student Loans: Understanding Options for Different Borrowers

A program that forgives the remaining balance on federal student loans for borrowers who work full-time for a qualifying public service employer and make 120 consecutive qualifying payments.

An arrangement made to determine how a borrower will pay back a loan over time.

A new income-driven repayment (IDR) plan with monthly payments that are generally equal to 10% of your discretionary income. Formerly known as the Revised Pay As You Earn (REPAYE) Repayment Plan.

Learn More: What is the SAVE Plan for Student Loans?

Stafford loans have not been offered since 2010, having been replaced by the William D. Ford Federal Direct Loan Program. But as FSA notes, some schools still refer to “Stafford loans” when they mean to say Federal Direct Loans. When schools (examples here and here) refer to Stafford loans, they mean Federal Direct Loans.

The percentage of a student loan borrower’s monthly income that is dedicated to his or her loan payments.

A type of federal student loan on which the government pays the interest while the student is in school, during the grace period, or during other deferment periods.

This program provides grants to those who qualify and fulfill a teaching service obligation, generally for four years. If a TEACH grant recipient doesn’t fulfill those requirements, the grant converts to a loan that must be repaid with interest. Aspiring teachers can apply for a TEACH grant of up to $3,772 per year.

Some teachers may be eligible for debt relief under this program.

A type of federal student loan on which the borrower is responsible for paying all the interest that accrues.

A credit score that is developed by the three major credit reporting agencies: Equifax, Experian, and TransUnion.

An interest rate that can change over time based on changes in a specified benchmark rate.

The average interest rate on all of your student loans.

A federal student loan program under which eligible students and parents borrow directly from the U.S. Department of Education at participating schools. Loans include Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation Loans.