Financial Vocab (Winter) – Flashcards
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529 College Savings Plans
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Education savings to help families set aside funds for future college costs. Prepaid Plans: Allows purchasing of tuition credits at current rates to be used in the future. Savings Plans: All growth is based upon market performance of the underlying investments, which typically consist of mutual funds.
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College Grant
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Free money offered by school to meet student's need, reward merit or both.
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Federal Pell Grant
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Money the U.S. federal government provides for students who need it to pay for college.
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Federal Work-Study Program
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Helps students earn financial funding through a part-time work program.
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Types of Scholarships
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Cost of Attendance (COA)
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Estimated full and reasonable cost of completing a full year as a full-time student which includes spending on fees payable to the institution, books, supplies, room and board, personal costs, and transportation.
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Student Loan Rates for 2013
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As of July 1, 2013, Stafford loan interest rates will be variable, but unlike other loans with variable rates, these Stafford loans will have a locked in rate for the life of the loan. On July 1 of each year, undergraduate subsidized and unsubsidized Stafford loans will have an interest rate of the 10-year Treasury index rate plus 2.05%.
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Federal Perkins Loan
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Need-based student loan offered by the U.S. Department of Education to help American college students pay for college.
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Master Promissory Note (MPN)
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Legal instrument in which one party promises a payment to the other at a specific time and specific terms and is valid for at least 10 years.
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Federal Stafford Loan
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Guarantees repayment to the lender if a student chooses to default.
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Subsidized federal Stafford Loan
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Offered to students based on financial need. The interest is paid by the federal government during an authorized deferment while the student is still in school.
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Unsubsidized federal Stafford Loan
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Students have to pay total interest for their education. Interest doesn't have to be payed all at once, the debt can be payed off throughout enrollment. Whatever hasn't been paid off in school is added to the principal loan.
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Federal Plus loans
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Student loan offered to the parents of students at eligible colleges.
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Free Application for Federal Student Aid (FAFSA)
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A form that can be prepared annually by current and prospective college students which determines their eligibility for financial aid. A gateway to the 9 federal student-aid programs.
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Deferment
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Student loan deferment is an agreement between the student and lender that the student may postpone repayment of a student loan for a designated period. With valid proof, a student in financial hardship can be eligible for deferment.
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Forbearance
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An agreement where the lender delays his right to foreclose if the borrower can catch up on his payments.
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Expected Family Contribution (EFC)
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An estimate of parent's/student's ability to pay for college which helps determine applicant's eligibility for federal student aid. The lower the EFC the higher the financial aid award from the college may be. (0-99,999)
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Net Price Calculator
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Determines a personalized net price for student/family. Estimates individual net price of a college.
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TEACH Grant Program
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Provides grants of up to $4,000 a year to students who are completing or plan to complete course work needed to begin a career in teaching.
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Repayment options
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Immediate Repayment: Require payments as soon as the loan is made. Interest Only: Requires repayment of the interest accumulated while in school. Full Deferment: Doesn't require any payments while in school. However, interest accrues and compounds during this deferment period.
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Income-Based Repayment Option
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Repayment plan for federal student loans. One may qualify if federal student loan debt equals/exceeds annual income.
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Sources of Aid
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-U.S. federal government, -State in which you live -College you attend -Nonprofit/Private organization
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Private loans
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Can come from banks, lenders or college financial aid.
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College Scholarship Search Profile (CSS)
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Application for federal aid that some colleges require. To determine expected family contribution, the CSS looks at home equity, student contribution, and consumer price index.
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Student Loan Rate
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The amount of interest rate on the loan to the student.
