Academic Year- The school year for which a student is enrolled and/or financial aid is awarded. May be based on semesters, quarters, trimesters, etc. Add-on Expenses (to Cost of Attendance)- Costs that are not typically included in the cost of attendance. The federal government allows certain expenses to be added into the financial aid budget. For more information about add-on expenses, talk to your financial aid counselor. Adjusted Gross Income (AGI)- Your gross income, less certain allowed business related deductions. These deductions include alimony payments, contributions to a Keogh retirement plan, and, in some cases, contributions to IRAs. Books and Supplies- Includes all of the books and equipment required to take the course of study and other required course materials, such as printing, copying and computer costs. Budget/Spending Plan- An itemized forecast of income and expenses commonly broken into monthly intervals and typically covering a one-year period. Cal Grant- Grant funded by the state of California. Assists low- and middle-income students with college tuition and expenses. For more information contact your financial aid counselor or the California Student Aid Commission. Compound Interest- Interest paid on interest from previous periods in addition to principal. Essentially, compounding involves adding interest to principal and any previous interest in order to calculate interest in the next period. Compound interest may be figured daily, monthly, quarterly, semi-annually, or annually. Cost of Attendance (COA)- Established by the financial aid office, it is a breakdown of expenses required to complete the curriculum for an academic year. Includes tuition and fees, room and board, books and supplies, miscellaneous costs, and personal costs. Credit Card- A revolving credit account usually managed by a bank or lender. Credit amount and interest rate are set by lender. Creditor- A person or agency to whom money is owed under the terms of an agreement, promise, or law. Debit Card- Typically linked to a checking or savings account, debit cards allow the user to immediately withdraw the funds. Discretionary Expenses- Expenses that are incurred for nonessentials. Might include entertainment, shopping, eating out, etc. Disclosure Statement- A statement of the actual loan costs, including the interest rate, any additional fees and the due dates of the first and subsequent payments. It is presented to the borrower at the time the loan is made. Your disclosure statement should include the name of your lender, guarantor, and servicer. Expense Diary- A list of all expenses incurred during a particular period of time. When creating a budget, keeping an Expense Diary helps you to track your spending habits. Expenses- Costs incurred by a person. Includes living and food costs, transportation, debt payments, entertainment, etc. When attending school, expenses also include tuition, fees and books. See also Discretionary Expenses, Non-discretionary Expenses, Routine Expenses and Non-routine Expenses. Extended Repayment- Loan repayment plan for borrowers who have a total education debt exceeding $30,000. This plan allows borrowers to repay their loans over a maximum term of 25 years, instead of 10 years, using either fixed or graduated payments. Available only to new borrowers (those who had no outstanding student loans as of October 7, 1998 or had no loans when they acquired new loans after October 7, 1998), Federal Perkins Loans- A need-based federal loan for students, which is issued by a participating school. Federal Stafford Loans- A federal education loan issued either by a participating lender or the Federal Direct Loan Program. There are two types, subsidized and unsubsidized. Subsidized Federal Stafford Loans are based on need, and the interest is paid by the federal government while the student is in school. Unsubsidized Stafford Loans are not based on need, and the borrower is responsible for the interest. Federal Supplemental Loans for Students (SLS)- This program was merged with the unsubsidized Federal Stafford Loan program on July 1, 1994. Financial Aid- Awarded by the school’s financial aid office. Types of financial aid include: grants (free money), work-study (money earned through employment, typically with the school), scholarships (free money), and loans (money to be paid back with interest). Financial Aid Budget- See Cost of Attendance (COA) Graduated Repayment- Loan repayment plan that calls for payment amounts to be lower at the beginning of the repayment period and increase over time. Borrower has up to 10 years to repay the loan. Holder- The lender, institution, or agency that originated the loan and holds its legal title, or a lender or secondary market that purchased the loan from the original holder. Income-sensitive Repayment- Loan repayment plan that is based on the borrower's income and the total amount borrowed. Payments increase as income rises. Repayment period will vary based on the income and loan amount. Interest- A charge for the use of money. Interest is calculated as a percentage rate of the loan principal. The interest rate can be fixed, which means it does not change over the life of the loan, or the rate can be variable, in which case it changes periodically. The percentage rate may be tied to one of several indexes such as the Prime Rate , LIBOR, or U.S. Treasury Bills. Lender- The bank, savings and loan, credit union, or other approved entity from which a borrower obtains a loan. Loan Consolidation- To refinance one or more outstanding federal student loans and create a single new loan. The new loan includes a fixed interest rate, new terms and may have an extended repayment period of up to 30 years. Loan Period- The academic year or portion thereof for which the applicant is enrolled and is seeking one or more loans. Minimum Loan Payment- The lowest amount of monthly payment on a loan that will enable the borrower to pay the entire loan by the designated repayment period. The amount of your minimum loan payments depends on the total loan amount, interest rate, and the length of the repayment period. Miscellaneous Costs- Educational expenses not included as part of tuition, living expenses or books and supplies. MPN (Master Promissory Note)- This is the legally binding contract between the borrower and the lender of a Federal Stafford Loan. By signing the MPN, the borrower agrees to all terms and conditions, including the responsibility to repay all borrowed funds along with any interest and fees that are charged. Unlike other promissory notes where only one loan can be borrowed per signed note, the MPN may be used by the school to make multiple Federal Stafford Loans to a borrower using the single note (up to 10 years). National Student Loan Data System (NSLDS)- NSLDS is the U.S. Department of Education’s central database for student aid records. NSLDS provides a centralized, integrated view of your federal Title IV education loans and grants, tracking from when they’re approved through when you pay off your loans. May be accessed using a PIN. Web address: http://www.nslds.ed.gov Net Income- The income you have after you’ve paid taxes and any and all other liabilities, expenses, or charges against it. Non-discretionary Expenses- Expenses that an individual must pay. Might include rent or mortgage payments, utility bills, and credit card payments. Non-routine Expenses- Expenses that are not regular or customary, and therefore not built into a Spending Plan/Budget. Might include car repair or unexpected medical costs. Personal Expenses- Costs included in the financial aid budget associated with living. Might include haircuts, clothing, dry cleaning, telephone, cleaning products, toiletries, entertainment, etc. Promissory Note - A written promise to repay a sum of money to the holder of the loan within a specified time period. It lists the conditions under which the loan is made and the terms under which the borrower agrees to repay the loan. You should keep copies of your promissory notes so you know what you agreed to for each loan. Records (as part of expenses)- (1) Records are proof of an agreement or purchase and should be kept in an organized system for easy reference. (2) Records to maintain in order to manage student loans include: application forms, promissory notes, disclosure statements, repayment schedules and correspondence with the holder. (3) Records to maintain in order to manage a Spending Plan/Budget include: resident hall contracts, rental agreements/ leases, utility contract, warranties, and receipts. Repayment Schedule/Plan- Federal Stafford Loans offer several repayment plan options that vary in length of period, payment amount, and total repayment amount. The borrower may choose the repayment plan that best fits his/her Spending Plan. For more information on the four plans, see also Standard Repayment, Graduated Repayment, Income-sensitive Repayment, and Extended Repayment. Resources- All funds available from various sources, calculated into a spending plan/budget. Resources might include: income, financial aid, gifts/assistance from family, savings, etc. Room and Board- Costs in the financial aid budget associated with housing, food and utilities. May be the cost of the residence hall and a meal plan or the rental of an apartment, utilities and the cost of food. Check with the financial aid office to make sure you understand what is covered under Room and Board. Routine Expenses- Expenses that occur on a regular basis, and therefore should be built into a spending plan/budget. Might include food costs, dental checkups, car payments, etc. While the expenses occur regularly, the amounts may vary from month to month. Rule of 72- Formula for calculating how quickly invested money will grow. Calculation takes into account compound interest. Formula: Take the number 72 and divide it by the interest rate earned on the account. The numerical answer translates to the number of years it will take for the money in the account to double. For example, $5,000 in an account earning 8% interest. 72 divided by 8 equals 9. Therefore, it will take nine years for the $5,000 to double into $10,000. Servicer- Company specializing in handling billing, collections, deferments, etc., for student loans. Many lenders and secondary markets hire servicers. SLS- See Federal Supplemental Loans for Students. Spending Plan/Budget- An itemized forecast of income and expenses commonly broken into monthly intervals and typically covering a one-year period. Standard Repayment- Loan repayment plan that provides for fixed annual payment over a fixed period of time. Borrower has up to 10 years to repay the loan. Subsidized Federal Stafford Loans- Loans based on need. The interest on such loans is paid by the federal government while the student is in school, during the grace period, and during eligible deferment periods. Transportation Costs- Costs included as part of the financial aid budget. Might include a public transportation pass, gas, car insurance, routine maintenance, and parking fees. Tuition and Fees- Costs included as part of the financial aid budget. The cost of classes or the number of credit hours during an academic period usually dictate the cost of tuition. Some schools use enrollment status full-time or half-time status. Call the registrar’s office at your school or go to the school’s Web site to get this information. Unsubsidized Federal Stafford Loans- Loans that are not based on need. The borrower is responsible for paying the interest.