Capitalized
If interest is allowed to accumulate on a loan, this interest will be added to the principal amount of the loan and additional interest will be based upon the higher amount. This will raise the repayment cost of the loan.

Citizen/Eligible Noncitizen
You must be one of the following to receive federal student aid:

• U.S. citizen
• U.S. national (includes natives of Samoa or Swain's Island or anyone born in a territory that falls under the legal jurisdiction of the United States)
• U.S. permanent resident who has an I-151, I-551 or I-551C (Alien Registration Receipt Card)

• "Refugee"
• "Asylum Granted"
• "Indefinite Parole" and/or "Humanitarian Parole"
• "Cuban-Haitian Entrant, Status Pending"
• "Conditional Entrant" (valid only is issued before April 1, 1980)

Cost of Attendance (COA)
The total cost of attendance is the amount it will cost a student to go to school-usually expressed as a yearly figure. This figure is determined using guidelines set up by the U.S. Congress. The COA includes tuition and fees; on- campus room and board (or a housing and food allowance for off-campus students); and allowances for books, supplies, transportation, loan fees and if applicable, dependent care, costs related to a disability, and miscellaneous expenses, including an allowance for the rental or purchase of a personal computer.

Also included are reasonable costs for eligible study-abroad programs. An allowance (determined by the school) is included for reasonable costs connected with a student's employment as part of a cooperative education program. For students attending less than half time, the COA includes only tuition and fees and an allowance for books, supplies, transportation and dependent-care expenses. Talk to the financial aid department if you have any unusual expenses that might affect your cost of attendance.

Default
A default occurs when you fail to repay your loan according to the terms you agreed upon when you signed your promissory note. Default also can occur if you fail to submit requests for deferment (postponing your repayment) or cancellation on time. Always handle the repayment of any loan in a responsible manner as the consequences of default are severe.

Deferment
If you find that you are unable to make repayment on your loan according to your original repayment schedule, you may be eligible for a deferment. A deferment will allow you to postpone payments on your loan for a specified amount of time. If you have a subsidized loan, you will not be charged interest during the deferment. If you have an unsubsidized loan, you will still have to pay the interest on the loan during the deferment. If you choose not to pay the interest, it will accrue and ultimately increase the amount you end up repaying.

Forbearance
If you find that you cannot make repayments according to your original repayment schedule, you may be eligible for a forbearance, which will allow you to temporarily postpone or reduce your payments for a certain amount of time. A forbearance differs in a deferment in that interest is still charged for both subsidized and unsubsidized loans.

Guaranty Agency
The guaranty agency is the organization that administers the FFEL Program for your school. If you have questions about FFEL Program Loans, this agency can provide you with reliable and accurate information. To find out the name, address and telephone number of the agency serving your state, as well as information about borrowing, you can contact the Federal Student Aid Information Center at 800.4.FED.AID seven days a week between 8 a.m. and midnight. A directory of guaranty agencies is available on the Department of Education's Web site.

Half-Time
At schools measuring progress by credit hours and semesters, trimesters or quarters, half-time enrollment is at least six semester hours or quarter hours per term. At schools measuring progress by credit hours but not using semesters, trimesters or quarters, half-time enrollment is at least 12 semester hours or 18 quarter hours per year. At schools measuring progress by clock hours, half-time enrollment is at least 12 hours per week. Note that schools may choose to set higher minimums than these.

Promissory Note
A promissory note is a legal contract that you sign when you are approved for and accept a student loan. This binding agreement states the terms and conditions under which you are borrowing and how you will pay the loan back. When you sign this note, you are agreeing to these terms and conditions. The note will also provide you with information about deferment and cancellation. It is crucial that you read and save this document because you will need to refer to the information in it when you begin repaying your loan.

Subsidized Loan
A subsidized loan is a loan that requires you to start repayment shortly after you have finished your academic career. With a subsidized loan, the federal government pays the interest on the loan while you attend school at least half- time or during periods when you qualify for authorized deferment of theloan payments.

Unsubsidized Loan
An unsubsidized loan is a loan that requires you to start repayment shortly after you have finished your academic career. With an unsubsidized loan, the borrower is responsible for paying the interest during the life of the loan while the student is attending school. If the borrower chooses not to pay the interest, theinterest is capitalized and the repayment amount will be larger.

Some terms and definitions provided by the 2001-2002 Financial Aid StudentGuide published by the U.S. Department of Education.

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