Student Loan Glossary | NC Assist Loans

To find a defined term more quickly, select the first letter of the term here: A B C D E F G H I L M N P Q R S T W

A

Academic Year: Customary annual period of instruction as defined by your school (may be up to 12 months).

Accrued Interest: Amount of interest that accumulates on the unpaid principal balance of a loan at a point in time.

Aggregate Loan Limit: The maximum cumulative amount you can borrow under an NC Assist Loan Program.

Alternative Loan: A loan offered by a bank or other lender to pay the costs of post-secondary education and also referred to as a Private Loan.

Annual Loan Limit: The maximum amount you can borrow under an NC Student Assist Loan or an NC Parent Assist Loan during one academic year.

Application: To apply for an NC Assist Loan, you must complete an application, available on-line at NCAssist.org.

APR: Annual Percentage Rate. Annual rate charged for borrowing and is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. A standardized computation such as the APR provides a bottom-line number that can be easily compared to rates charged by other lenders.

Automatic Draft (auto-draft): A service that allows you to automatically make recurring monthly payments on your loan(s) directly from your bank or financial institution.

B

Benefiting Student: The student who benefits from an NC Parent Assist Loan.

Borrower: A person who receives a loan.

Borrowing Limits: You may borrow up to your school's cost of attendance minus other financial aid you receive. The aggregate loan limit for the NC Student Assist Loan is $120,000 for undergraduate students and $200,000 for graduate students. The minimum amount is $1,000.

Budgeting: Estimating expected income and expenses for a given period of time. NC Student Assist borrowers have access to on-line financial education tools that assist them with budgeting while in school and repayment.

C

Capitalized Interest: Accrued, unpaid interest that is added to the principal balance of the loan.

College Foundation / College Foundation, Inc. / CFI: College Foundation Inc. is your state-based non-profit lender in North Carolina. Focused on financial assistance for higher education, CFI administers education loans, several state and private grant and scholarship programs for students attending North Carolina colleges and universities, and the NC 529 college savings program on behalf of the N.C. State Education Assistance Authority. CFI also delivers information to North Carolinians about paying for college, making financial aid services available to college and universities and provides phone and technology support for the free, comprehensive College Foundation of North Carolina college and career planning website, CFNC.org.

College Loans or College Student Loans: Students may borrow money to help meet educational expenses. These loans, both through the federal government and private organizations like CFI, are often referred to as "college loans".

College Scholarships: Financial assistance programs that do not require repayment.

Co-signer: An additional applicant on the loan whose obligations are the same as the borrower under the Promissory Note and who is responsible for paying the loan if the borrower does not pay.

Cost of Attendance (COA): The total cost of an education - usually expressed as a yearly figure. COA includes tuition and fees, room and board, an allowance for books and supplies, transportation, and miscellaneous expenses and is determined by the financial aid office of the institution.

Cost of College: The total cost of an education - usually expressed as a yearly figure. Cost of College is often referred to as "Cost of Attendance" or "COA" and includes tuition and fees, room and board, an allowance for books and supplies, transportation, and miscellaneous expenses and is determined by the financial aid office of the institution.

Credit Report: Information received from a consumer reporting agency that provides a comprehensive view of a borrower's credit history.

Cumulative Loan Amount: See Aggregate Loan Limit.

D

Deferment: An authorized period of time during which a borrower may postpone principal and interest payments. Interest continues to accrue during a Deferment period and any accrued, unpaid interest may be capitalized (added to the principal balance) at the end of the Deferment.

Delinquent: Past due at least 31 days.

Disbursement: Delivery of all or a portion of the loan funds to the school on behalf of the borrower.

Disbursement Date: The date or dates on which money is lent. If a disbursement is made by check, it will be the date shown on the loan check. If a disbursement is made by electronic funds transfer, it will be the date the loan funds are electronically transferred to the school.

E

Eligible Non-citizen: The most common category of eligible non-citizen is that of permanent resident (someone with a "green card"), but there are other categories as well. Check at https://studentaid.gov/understand-aid/eligibility/requirements/non-us-citizens for the most recent list of eligible non-citizens who can received financial aid.

Eligible Non-profit Title IV Institution: A non-profit institution of higher education that is eligible to participate in the financial aid programs of the U.S. Department of Education under the Higher Education Act of 1965, as amended.

Eligibility

A student or parent borrower must meet eligibility requirements for the NC Assist Loan program. Eligibility requirements for the student borrower of an NC Student Assist Loan include:

Be at least 17.
Be enrolled (or accepted for enrollment) at least halftime at an eligible non-profit Title IV institution in a degree-seeking program.
Be a North Carolina resident or have a benefiting student attending an eligible North Carolina school.
Be credit-worthy and have the required credit score, or have a co-signer who meets the credit requirements.
Be a U.S. citizen or an eligible non-citizen.
Meet other federal student eligibility requirements such as certified by the student's school.
Be in good standing on any other CFI loan(s).

Eligibility requirements for the parent borrower of an NC Parent Assist Loan include:

Be the biological parent, adoptive parent, or step-parent of an eligible benefiting student.
Be a U.S. citizen or an eligible non-citizen.
Be a North Carolina resident or have a benefiting student attending an eligible North Carolina school.
Have a benefiting student who meets all of the requirements listed for a student borrower except the credit score requirement.
Be credit-worthy and have the required credit score.
Be in good standing on any other CFI loan(s).

Eligibility requirements for a co-signer on the NC Student Assist Loan include:

Be at least 21 years of age.
Be a spouse or relative of the student.
Be a U.S.citizen.
Be credit-worthy and have the required credit score.
Guarantee that the student's debt is repaid.
Accept equal responsibility for paying the debt, including fees and collection costs.
Understand the student's loan may appear on your credit record.

F

FAFSA: Free Application for Federal Student Aid - the standard federal form used to determine eligibility for most types of financial aid, including federal student loans.

Federal Financial Aid: A series of financial assistance programs intended to assist college students with their educational expenses. Federal financial aid may be in the form of a grant, a loan, or employment (work study).

Federal Pell Grants: Federal grant program awarded to college students, based on financial need.

Federal Student Loans: Student loans made by the federal government and often referred to as Federal Direct Loans.

FICO Score: Your FICO score is your credit score. It is calculated with software from Fair Isaac Corporation (FICO).

Financial Aid Officers: Campus financial aid officers are responsible for the administration of financial assistance programs at a college or university. Campus financial aid administrators also certify a borrower's eligibility for the NC Assist Loan.

Financial Education Resources / Money Management Information: Financial education resources assist borrowers in learning about money management. NC Student Assist borrowers are offered the opportunity to access a robust on-line library of financial education resource.

Fixed Interest Rate: An interest rate that remains the same throughout the life of the loan.

Forbearance: A temporary postponement of payments during which interest continues to accrue. Any accrued, unpaid interest may be capitalized (added to the principal balance) at the end of a forbearance period.

Full-time: For undergraduate students, this is usually a minimum of 12 semester hours of enrollment in a degree-granting program.

G

Grace Period: The six-month period after the borrower graduates or ceases to be enrolled at least halftime at an eligible non-profit Title IV institution. Repayment begins at the end of the Grace Period. During the Grace Period the borrower is not required to make payments on the loan. At the end of the Grace Period any accrued, unpaid interest will be capitalized (added to the principal balance of the loan).

Graduate/Professional Student: A student who is enrolled in a program of study leading to a graduate or professional level degree, such as a masters level program or medical school.

H

Halftime: Half of a full-time academic workload for the course of study, based on the standards of the institution.

I

Interest: The amount of money charged to borrow money over time, usually stated as an annual percentage of the principal amount owed.

Interest Rate Reduction: There may be .25% interest rate reduction on your loan when you repay your loan making auto-draft payments during the repayment period.

L

Lender: A lender loans money. College Foundation, Inc. is the lender for the NC Student Assist and NC Parent Assist loans.

Loan: Money provided to a borrower with the agreement that the borrower will repay the money with interest over a period of time. A loan may have a co-signer who agrees to the same terms and conditions as the borrower and agrees to pay if the borrower fails to pay.

Loan Amount: The amount of money provided to a borrower in a Loan.

Loan Terms

The conditions under which a loan is repaid.

For the NC Student Assist Loan:
Grace period: Payments are not required until 6 months after you graduate or cease to be enrolled at least halftime.

You have the option to pay the interest that accrues while you are enrolled and during the grace period. If you choose not to pay, the accrued, unpaid interest will be capitalized (added to your outstanding principal balance) when the repayment period begins.

The repayment period:

10-year standard maximum repayment period.
$50.00 minimum monthly payment.
No penalty for prepayment.

For the NC Parent Assist Loan:

Accrued, unpaid interest will be capitalized (added to your outstanding principal balance) when the money is disbursed.
10-year standard maximum repayment period.
$50.00 minimum monthly payment.
No penalty for prepayment.

Loan Period: Academic period covered by the Loan. The school certifies the Loan Period.

M

Monthly Payment: Loans are generally repaid on a monthly schedule. The monthly payment is the amount you pay each month. The monthly payment will depend on the amount you borrow and your interest rate.

N

NC Parent Assist: The NC Parent Assist Loan is an education loan that helps bridge the gap between the cost of higher education and the amount received from other financial aid.

NC Student Assist: The NC Student Assist Loan is an education loan that helps bridge the gap between the cost of higher education and the amount received from other financial aid.

Non-profit Title IV Institution: A non-profit institution that meets the eligibility requirements under Title IV of the Higher Education Act as amended.

P

Parent Loans: Money borrowed by a parent to help meet their student's educational expenses.

Partial Payment: A payment made that is less than the Scheduled Payment Amount.

Payment: Money paid on a loan.

Payoff Balance: The total amount a borrower owes to pay off a loan in full, including the outstanding principal balance and any accrued, unpaid interest and fees.

PLUS Loans: A federal loan for graduate or professional students or parents of dependent undergraduate students.

Prepayment: Money paid prior to a payment being due.

Principal Balance: Outstanding amount of the loan (which may include Capitalized Interest) on which the lender charges interest.

Private School Loans / Private Student Loans: Loan programs available through private lenders like banks and non-profit entities like CFI.

Promissory Note: The legally binding agreement the borrower and co-signer (if applicable) sign that provides the conditions under which money is borrowed and the terms under which it is repaid.

Q

Qualified Relative: A co-signer must be a parent, stepparent, grandparent, sibling, spouse, son or daughter of the student loan applicant.

R

Reference: An individual provided by the borrower on the loan application for purposes of collecting or verifying borrower information.

Repayment Period: The period during which the borrower is required to repay the Loan Amount in accordance with the Promissory Note. For the NC Student Assist Loan, the Repayment Period begins on the day after the Grace Period ends and continues for no more than 120 months. For the NC Parent Assist Loan, the Repayment Period begins immediately after the loan is fully disbursed and continues for no more than 120 months.

S

Scheduled Payment Amount: The monthly payment amount required to be paid on your loan(s).

School Certification: The attestation that the school provides asserting that the student meets eligibility requirements to borrow the loan.

Self-Certification Form: The form required by the U.S. Department of Education when a student applies for an Alternative Loan. The Self Certification Form requires the student to provide information such as the period of enrollment, the cost of attendance during the period of enrollment and the estimated financial assistance for the period of enrollment covered by the Alternative Loan. This information is available to the borrower from the institution's financial aid office.

Stafford Loan: A federal student loan (See William D. Ford Federal Direct Loan Program).

T

Title IV: A section of the Higher Education Act of 1965, as amended, that authorizes federal financial aid programs.

W

William D. Ford Federal Direct Loan Program

There are four types of loans offered under the Federal Direct Loan Program:

Federal Direct Stafford/Ford Loans (Direct Subsidized Loans).
Federal Direct Unsubsidized Stafford/Ford Loans (Direct Unsubsidized Loans).
Federal Direct PLUS Loans.
Federal Direct Consolidation Loans.