Glossary of Terms for US Federal Student Aid

Award Year
The 12 month period during which you attend school and for which your aid has been awarded.

Borrower
Person responsible for repaying a loan by signing and agreeing to the terms in the master promissory note.

Capitalization
Adding unpaid interest to the loan principal. Capitalization increases the principal amount of the loan and its total cost.

Cohort Default Rate
The percentage of Avondale's students who borrowed money under the Direct Loan program and defaulted before the end of the fiscal year in which they entered repayment on their loans. The US Department of Education calculates this rate annually to determine the default experience of students who attended a particular school during a particular period of time.
Avondale has a Cohort Default rate of 0.0.

Cost of Attendance (COA)
The expenses relating to your attendance at school, which includes tuition, accommodation, books and supplies, fees and other living costs. The COA is determined by Avondale, using federal guidelines.

Default
Failure to repay a loan according to the terms of the master promissory note. This failure must persist for 270 days.

Deferment
A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue for subsidized loans.

Dependent student
A student who does not meet any of the criteria for an independent student (see below).

Disbursement
A payment of loan money to the student or parent borrower. Disbursement is usually made in two instalments during the year.

Discharge
The release of a borrower from the obligation to repay his or her loan.

Direct Loan Program
The William D. Ford Federal Direct Loan Program provides loans to student and parent borrowers directly through the U.S. Department of Education rather than through a bank or other lender.

Direct Loan Servicing Centre
The U.S. Department of Education's agent contracted to collect Direct Loans and handle deferments, repayment options, and consolidation.

Direct Subsidized Stafford Loan
A loan for students with financial need as determined by federal regulations. No interest is charged while you are in school at least half-time, during your grace period, and during deferment periods.

Direct Unsubsidized Stafford Loan
A student loan that is not based on financial need. Interest is charged during all periods.

Estimated Financial Assistance (EFA)The amount of financial assistance from federal, state, institutional or other sources that a student (or parent on behalf of a student) will receive for a period of enrolment. This may include, but not be limited to, scholarships, grants and financial need-based employment.

Expected Family Contribution (EFC)
The EFC is a measure of the financial strength of a student's family. The U.S. Department of Education calculates a student's EFC based on information provided on the Free Application for Federal Student Aid (FAFSA).

Forbearance
A postponement of payment on a loan, typically if the borrower doesn't qualify for a deferment and is unable to make payments for a reason such as poor health. Interest continues to accrue during forbearance.

Grace period
A six-month period before the first payment must be made on a subsidized or unsubsidized Direct Loan. The grace period begins the day after the borrower ceases to be enrolled at least half time.

Independent student
A student who is at least 24 years old, married, a graduate or professional student, a veteran or on active duty in the military for other than training or state purposes, an orphan, a ward of the court, or who has legal dependents other than a spouse.

Interest
An expense of borrowing money that is calculated as a percentage of the amount borrowed.

Loan
Money borrowed that must be repaid.

Loan fee
An expense of borrowing deducted proportionately from each loan disbursement.

Master Promissory Note
A legally binding contract between a lender and a borrower. The promissory note contains the terms and conditions of the loan, including how and when the loan must be repaid.

Principal balance
The amount owed on a loan, which includes any capitalized interest.

Repayment period
The period during which a borrower is obligated to make payments on his or her loan(s).

Repayment schedule A statement provided by the Direct Loan Servicing Centre to the borrower that lists the amount borrowed, the amount of monthly payments, and the date payments are due.

Satisfactory Academic Progress (SAP)
The achievement of required academic standing within the defined time frame, to ensure continued access to Financial Aid.

Variable interest
Rate of interest on a loan that is tied to a stated index and changes annually every July 1 as the index changes.


Disclaimer


This information contained on the Avondale College Financial Aid web page is not financial product advice and has been prepared for general information purposes only in compliance with US legislation. Before acting on information contained in the Avondale College Financial Aid guide, you should seek specific professional advice. The information should not be considered specific to your particular needs.