College Financial Aid Glossary

A

Accrued Interest

The interest that accumulates on the unpaid principal balance of a loan.

ACT

American College Testing (ACT) publishes the ACT Assessment Test, also known as the ACT. Most universities require either the ACT or the SAT as part of an application for admission.

Alternative Loans

Also referred to as Private Student Loans. See Glossary term for Private Student Loans.

Annual Percentage Rate (APR)

The annual cost of borrowing that includes the interest rate along with other borrowing charges, such as fees. SunTrust does not charge origination or repayment fees on its private student loans.

Applicant Self-Certification Form

A form required by the U.S. Department of Education and federal regulation. Students must sign and submit this form to their lender prior to receiving a private student loan. Information required on the form includes student's cost of attendance and estimated financial assistance.

Application and Solicitation Disclosure

A disclosure required by the U.S. Department of Education and federal regulation that is presented to the borrower and cosigner, if applicable, as part of the application process for a private student loan. The disclosure provides a range of interest rates as well as repayment examples.

Approval Disclosure

A disclosure required by the U.S. Department of Education and federal regulation that is sent to the borrower and cosigner, if applicable, after all required, acceptable documentation, if applicable, and certification from the borrower's school is received. The borrower and cosigner must proactively accept the loan terms outlined in the disclosure and have 30 calendar days to do so.

Auto Pay

Automatic withdrawal of loan payments from a bank account.

B

Borrower

The person who applies for and receives the loan and is responsible for repaying the loan.

C

Capitalization

This occurs when interest on your loan accrues and is periodically added to the loan principal. Capitalization increases the balance due. Interest is charged on the new loan balance, including both the principal and unpaid interest. This may increase your monthly payments on a loan. Capitalization is also called compounding.

Certification

See Glossary term for School Certification.

Cosigner

The person who signs for a loan, other than the borrower, who will assume responsibility for the loan if the borrower fails to repay it.

Cosigner Release

SunTrust private student loan borrowers can apply to release their cosigner from the loan obligation when certain requirements are met. Details about this benefit.

Cost of Attendance (COA)

The total cost to attend a school for a specified period of enrollment. This figure is determined by the school's financial aid office, and includes tuition, room and board, books, transportation, and other related expenses.

Credit Agreement

A legal contract between a borrower and a lender that includes the terms and conditions for repayment. May also be called a Promissory Note.

Credit Report

A document provided by a Credit Reporting Agency that shows a person’s, history of making payments on credit accounts, balances, employment information and more.

Credit Reporting Agency

An organization that compiles credit and personal information, which is then given to creditors. The information may include history of payment, credit accounts and balances, and employment information.

Creditworthy

An applicant who has an established and active credit history at one of three major credit reporting agencies, and does not show signs of delinquent or derogatory credit.

Current Interest Rate

Shows the present cost of borrowing, expressed as a percentage of the principal balance.

D

Default

If you make no payments for 270 days on your federal student loans and are not in your grace period, or if you otherwise fail to meet the terms and conditions of your loan, you're legally in default on your federal student loan agreement. In this case, your lender can declare the entire amount you owe -- including interest -- as immediately due and payable.

If you fail to make any monthly payment in full on your SunTrust private student loan and are not in your grace period, or if you otherwise fail to meet the terms and conditions of your loan, you're legally in default on your private student loan agreement. Defaulting on a federal or private student loan has a negative impact on your credit rating. If a federal student loan is defaulted, no other federal student loans can be obtained.

Deferment

Time frame in which you postpone repayment on your loan, under certain conditions, with permission from the lender. SunTrust offers full deferment on its private student loans in which the following apply:

  • Defer payment of principal and interest while in school.
  • Interest will accrue during the deferment period and will be capitalized (added to the loan balance) when repayment of principal and interest begins.
  • Payments may be deferred (a) while student is enrolled at least half-time at an approved school, and (b) during the 6 month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date.

Delinquency

A loan is considered delinquent if the lender has not received a borrower's full payment by the day after the payment due date.

Disbursement Date

The date a lender issues a check for a loan or transmits the funds to the school on behalf of the borrower or parent.

Direct Loans

A federal Direct Loan is a federal student loan made directly by the U.S. Department of Education. Generally, if you took out a federal student loan or consolidated your loans after July 1, 2010, you have a federal Direct Loan. You can learn more about what type of federal student loan you have through the National Student Loan Data System (NSLDS).

Direct Subsidized Loan

A Direct loan on which interest is paid by the federal government while the student is in school at least half-time, or during grace and deferment periods. These loans are based on financial need.

Direct Unsubsidized Loan

A Direct loan on which interest is not paid by the federal government. Unsubsidized loans are not based on financial need and may be used to finance the expected family contribution (EFC).

E

Expected Family Contribution (EFC)

The amount a family is expected to pay toward college costs. This amount is determined by a need analysis formula established by the federal government.

F

FAFSA®

The Free Application for Federal Student Aid (FAFSA). This federal application is used to determine eligibility for most forms of education-related federal financial aid including federal student loans.

Federal PLUS (Parent Loan for Undergraduate Students)

Parents may be eligible for this loan if their child is a dependent student. The parents must meet all credit criteria, and the loan must be certified by the school. There is no deferment of payments while the child is in school, nor is there any grace period. Parents can borrow up to the cost of education, minus any financial aid received.

Federal Grad PLUS

Similar to the PLUS loan for parents, the Grad PLUS loan is an unsubsidized federally guaranteed education loan with no annual or aggregate limits. It has no grace period and it goes into repayment as soon as the funds are disbursed to the borrower. It has the same deferment and forbearance options as the federal Stafford loan program. As such, graduate and professional students can postpone repayment using in-school deferment while enrolled at least half-time in a degree or certificate program of study.

Final Disclosure

A disclosure, required by the U.S. Department of Education and federal regulation, providing the final terms of a private student loan prior to funds being released. The disclosure is sent to the borrower and cosigner, if applicable, after accepting the Approval Disclosure. Both the borrower and cosigner have three business days to cancel or rescind the loan after receipt of the Final Disclosure.

Financial Aid

Funds provided to a student or the student’s family to help pay for the student’s college education. This can include grants, scholarships, work-study programs and loans.

Financial Aid Officer (FAO)

A college or university employee who administers financial aid. Also referred to as a Financial Aid Advisor, Financial Aid Counselor or Financial Aid Administrator.

Financial Aid Office

The office at a college or university that determines a student's financial need for attending that school and awards financial aid.

Financial Aid Package

The combination of all grants, scholarships, loans, and work-study employment from all sources (federal, state, institutional, and private) offered to a student for education funding.

Financial Need

The difference between the cost of attending a particular school and a family's or student's ability to pay for it. The ability to pay is measured through the needs analysis process.

Fixed Interest Rate

A rate of interest that doesn't change during the term of a loan. Since a fixed rate does not change, which means payments are more predictable. For a SunTrust private student loan for which the fixed rate is chosen, the fixed rate assigned to a loan will never change except as required by law or if you request and qualify for the ACH reduction benefit(s).

Forbearance

An agreement the borrower enters into with the lender to postpone their repayment obligation for a period of time. At the discretion of the lender, an extension of time or smaller payments may also be arranged. Interest continues to accrue during any granted forbearance periods.

Forgiveness

Your obligation to repay all or part of a student loan can be canceled under certain conditions. These conditions can include total and permanent disability, death, or, for federal student loans, some military or government service.

G

Grace Period

A specified period of time after the borrower graduates or leaves school during which he or she isn't required to make principal payments, but during which interest may continue to accrue, depending on your loan type.

Grant

A type of financial aid based on financial need that the student does not have to repay.

H

Half-Time

Most financial aid programs require that the student be enrolled at least half-time to be eligible for aid, and some require the student to be enrolled full-time. Typically, a student must be taking at least half of the course load of a full-time student to be considered half-time. Check with your school for their specific requirements.

I

Immediate Repayment

A type of repayment option offered on SunTrust private student loans in which the following apply:

  • Pay principal and interest while in school.
  • Principal and interest payments begin approximately 30-60 days following the final disbursement date.
  • The minimum monthly payment is $50.00.

Interest-Only Repayment

A repayment option that covers the interest owed on a loan, but not the principal owed. This is a type of repayment option offered on SunTrust private student loans in which the following apply:

  • Pay only the accrued monthly interest while in school (principal payments are deferred).
  • Principal and interest payments begin six months after graduation or dropping below half-time status.
  • Principal may be deferred (a) while student is enrolled at least half-time at an approved school, and (b) during the 6 month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date.
  • Making interest only payments while in school does not reduce the principal balance of the loan.

Interest Rate

This is the fee charged for use of money. The interest is calculated as a percentage of the principal balance.

Interest

A fee, usually a percentage of the loan amount, that is charged in exchange for lending the money. If the interest rate (the percentage) stays the same for the term of the loan, it's called a fixed rate. If it the rate fluctuates, it's called a variable rate.

L

LIBOR

LIBOR stands for the London Interbank Offered Rate and is a rate of interest at which banks borrow funds from each other in the London interbank market.

Loan

Money that is borrowed for a specific reason (funding an education, buying a car or home, etc.), and that is repaid with interest.

Loan Amount

The initial amount borrowed before any interest accrues; also referred to as the principal.

Loan Period

An academic term or school year for which a loan is designated.

Loan Principal

The total principal amount of money borrowed.

M

Monthly Payment (while in school)

The monthly student loan payment the borrower must make during the in–school deferment period. Some students may elect to make partial payments or have their loan repayment completely deferred, or postponed, while in school.

Monthly Payment (during repayment)

The monthly student loan payment the borrower must make after graduating or dropping below half-time status. This is the principal and interest monthly loan payment due when the deferment period has ended.

O

Origination Fee

The fee you pay to initiate a loan. With federal student loans, this fee is paid to the government to offset administrative costs. There are no origination fees charged with any of the SunTrust private student loans.

P

Parent Loans for Undergraduate Students (PLUS)

Federal student loans available to parents of dependent undergraduate students to help finance their child's education. Parents can borrow up to the full cost of education, minus financial aid received. Applicants must meet established credit criteria.

Partial Interest Payment

A type of repayment option offered on SunTrust private student loans in which the following apply:

  • Pay partial interest of $25 per month while in school.
  • $25 partial interest payments begin 30-60 days following the first disbursement date.
  • Option available for loans of $5,000 or more.
  • Principal and interest payments begin six months after graduation or dropping below half-time status.
  • Any accrued, unpaid interest will be capitalized (added to the loan balance) when repayment of principal and interest begins.
  • Principal and any accrued interest above $25 may be deferred (a) while student is enrolled at least half-time at an approved school, and (b) during the 6 month grace period after graduation or dropping below half-time status, but the total initial deferment period, including the grace period, may not exceed 66 months from the first disbursement date.
  • Making partial interest payments while in school does not reduce the principal balance of the loan.

Pell Grants

One of the largest sources of grants, Pell Grants are distributed by the federal government to help students with financial need.

Permanent Resident

Any person not a citizen of the United States who is residing in the U.S. under legally recognized and lawfully recorded permanent residence as an immigrant1. A permanent resident may also be known as "Permanent Resident Alien", "Lawful Permanent Resident," "Resident Alien Permit Holder," and "Green Card Holder."

Prepayment

When a borrower pays a portion or the entire amount of principal before it is due. This may reduce the total amount of interest charged.

Private Student Loans

Education/student loans from private lenders that are designed to help with costs not covered by federal student loans, scholarships and grants. Private student loans are also referred to as alternative loans. Credit guidelines apply in determining eligibility.

Promissory Note

A legal contract between a borrower and a lender that includes the terms and conditions for repayment. May also be called a Credit Agreement.

R

Rate Type

For a SunTrust private student loan, choose from a fixed or variable interest rate during the application process.

Repayment Options

For SunTrust private student loans, the repayment option refers to the payment plan one selects for the time period in which the student will be enrolled at least half-time or more. Once a repayment option is chosen, and the loan has been disbursed, the repayment option cannot be changed. The options that may be offered are as follows:

Repayment Period

The period of time, after the deferment period ends, during which you repay the money borrowed (principal) and interest. The period of time, after the deferment period ends, during which principal and interest monthly payments are due.

S

Scholarship

A form of financial aid given to students to help pay for their education. Scholarships are generally available for a student's outstanding achievement - academic, athletic, or creative. Scholarships don't have to be repaid.

Scholastic Assessment Test (SAT)

The SAT is an entrance exam used by most colleges and universities to make admissions decisions. Most colleges/universities require either the ACT or the SAT as part of an application for admission.

School Certification

Certification is a process where a student’s school verifies that the student is eligible for the student loan amount they are requesting. Funds are disbursed directly to the school's financial aid office and credited to the student's account.

Servicer

A company contracted by a lender or holder to handle administrative aspects of the loan after the application process is finalized. This includes collection of payments, correspondence with borrowers, address changes, loan status updates and more. Quite often, all communication regarding a loan will be with the servicer.

Stafford Loans

Generally, these are federal student loans made before July 1, 2010. Stafford loans are either subsidized — the government pays the interest while you're in school — or unsubsidized — you pay all the interest, although most students will not start making these payments until after graduation. Unsubsidized Stafford loans add the accrued interest to the loan balance, increasing the size and ultimate cost of the loan.

Student Aid Report (SAR)

A report that summarizes information included in the Free Application for Federal Student Aid (FAFSA). This form must be provided to your school's Financial Aid Office. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC).

T

Term

The number of years (or months) in which the loan is to be repaid.

Total of Payments

The estimated total amount paid on the loan when you have made all payments, including the principal and interest and finance charges.

Trade Line

Entry to a borrower's credit history maintained by a credit reporting agency. A trade line describes a consumer's account status and activity. Trade line information includes such things as names of companies where the applicant has accounts, dates accounts were opened, credit limits, types of accounts, balances owed and payment histories.

U

U.S. Department of Education (ED, DOE or USDE)

The government agency that administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loan, the Federal Stafford Loans, the Federal PLUS Loan, and the Federal Consolidation Loan.

V

Variable Interest Rate

An interest rate tied to a financial index that changes periodically (e.g. quarterly, annually etc.). A variable rate may increase or decrease from the starting variable rate, depending on the financial index it is tied to. A financial index is influenced by market conditions and not by individual lenders. SunTrust bases its private student loans on a margin plus the LIBOR index; this index is not controlled by any single lender, but is influenced by broad banking industry lending conditions. Because the variable rate is tied to LIBOR, it is subject to periodic changes – which means the longer it takes for a loan to be repaid, the more opportunities there are for the variable loan rate to go up or down and, as a result, there is a possibility the cost of the loan could increase or decrease depending on the fluctuations over time.

W

Work-Study

This part of federal Student Aid provides part-time employment for students who need income to help meet education costs.

Important Information

Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. View and compare the available features of SunTrust private student loans.

Union Federal is a federally registered trademark of Cognition Financial Corporation used by SunTrust Bank under license. The Union Federal Private Student Loan is funded by SunTrust Bank and is not offered in connection with any other lender or the federal government. Cognition Financial Corporation is not an affiliate of SunTrust Bank.

Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue these programs without notice. These loan programs are subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.

©2010 fafsa.gov. All rights reserved. FAFSA is a trademark of the U.S. Department of Education.

1  Source: U.S. Citizenship and Immigration Services: glossary definition for Permanent Resident.

 

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