Loan Related Terms

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Loan Related Terms

Post by Admin on Tue Mar 22, 2016 10:14 am

Deferment
A postponement of payment on a loan that is allowed under certain conditions and during which interest does not accrue on Direct Subsidized Loans, Subsidized Federal Stafford Loans, and Federal Per...

Forbearance
A period during which your monthly loan payments are temporarily suspended or reduced. Your lender may grant you a forbearance if you are willing but unable to make loan payments due to certain typ...

Federal Student Loan
A loan funded by the federal government to help pay for your education. A federal student loan is borrowed money you must repay with interest.

Default
Failure to repay a loan according to the terms agreed to in the promissory note. For most federal student loans, you will default if you have not made a payment in more than 270 days. You may ...

Loan Servicer
A company that collects payments, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a lender. If y...

Principal
The total sum of money borrowed plus any interest that has been capitalized.

Federal Perkins Loan
A federal student loan, made by the recipient's school, for undergraduate and graduate students who demonstrate financial need.

Subsidized Loan
A loan based on financial need for which the federal government pays the interest that accrues while the borrower is in an in-school, grace, or deferment status.

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

Cancellation
The release of the borrower's obligation to repay all or a designated portion of principal and interest on a student loan. Also called discharge or forgiveness of a loan.

Direct Loan
A federal student loan, made through the William D. Ford Federal Direct Loan Program, for which eligible students and parents borrow directly from the U.S. Department of Education at participating ...

FFEL Program
Federal Family Education Loan Program

Lender
The organization that made the loan initially; the lender could be the borrower's school; a bank, credit union, or other lending institution; or the U.S. Department of Education.

Delinquent
A loan is delinquent when loan payments are not received by the due dates. A loan remains delinquent until the borrower makes up the missed payment(s) through payment, deferment, or forbearance.

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