1040 Form, 1040A Form, 1040EZ Form
U.S. Federal Income Tax Return forms. Each form has its own filing requirements. Persons required to file a federal income tax return must file one of the 1040 forms with the Internal Revenue Service by April 15 of each year.

1099 Form
Form used by business to report income paid to a non-employee. Banks use this form to report interest income.

Academic Year
A period of time used by schools to measure a quantity of study. For example, a school’s academic year may consist of a fall and spring semester which must include at least 30 weeks of instructional time.

Accrued Interest
Interest that accumulates on the loan and is payable by the borrower. Loan interest accrues according to the current interest rate and the amount owed.

ALP
Alternative Loan Program – loans of this type are from private lenders instead of the federal government. Borrower must be credit-worthy and the interest rates vary depending on the lender. Interest rates on these loans are higher than federal loans.

Award Letter
An official document issued by a school's financial aid office that lists all of the financial aid awarded to the student. This letter provides details on their analysis of your financial need and the breakdown of your financial aid package according to amount, source and type of aid. The award letter will include the terms and conditions for the financial aid and information about the cost of attendance.

Award Year
The academic year for which financial aid is requested and/or received.

Borrower
Person legally responsible for repaying a loan and who has signed the promissory note.

Bursar's Office (Also called Student Accounts Office)
The university office that is responsible for the billing and collection of university charges and the disbursement of federal financial aid.

Campus-based Aid
Financial aid programs that are administered by the university. The federal government provides the university with a fixed annual allocation, which is awarded by the financial aid administrator to deserving students. Such programs administered by the College of Medicine include the Federal Perkins Loan. Note that there is no guarantee that every eligible student will receive financial aid through this program because awards are made from a fixed pool of money. This is a key difference between the campus-based loan program and the Federal Stafford Loan Programs.

Cancellation
The release of borrowers from their obligations to pay all or a portion of their education loans. Borrowers must meet certain requirements to be eligible for cancellation.

Capitalized Interest
Unpaid, accumulated interest that is added to the loan principal. Because the principal increases, so does the total cost of the loan.

Consolidation
A method of combining several loans into a single loan with an extended repayment term of up to 30 years and a possible overall lower monthly payment.

Cost of Attendance (COA)
The total amount it will cost the student to go to school, usually expressed as a yearly figure. It is determined by using rules established by law. 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 and supplies, transportation, personal and miscellaneous expenses, which may include the purchase of a computer, dependent care or costs related to a disability. Loan fees, if applicable, may also be included in the COA.

Credit Rating
An evaluation of the credit worthiness of a potential borrower of a loan. Credit bureaus and credit reporting agencies provide information to banks and businesses to help them decide whether to issue a loan or extend credit. Your credit rating may include your payment history, a list of current and past credit accounts and their balances, employment and personal information and a history of past credit problems.

People who make all their payments on time are considered good credit risks. People who are frequently delinquent in making their payments are considered bad credit risks. Also, defaulting on a loan can hurt your credit rating.

Debt
The amount of money a student borrows plus the interest that accrues in considered a debt that must be repaid.

Default
Failure to repay a loan in accordance with the terms of the promissory note. If you default on a loan, the university, the holder of the loan, and/or the federal government can take legal action to recover the money, including garnishing your wages and withholding income tax refunds. Defaulting on a government loan will make you ineligible for future federal financial aid, unless a satisfactory repayment schedule is arranged, and can affect your credit rating.

Deferment
Occurs when a borrower is allowed to postpone repaying a loan. If you have a subsidized loan, the federal government pays the interest charges during the deferment period. If you have an unsubsidized loan, you are responsible for the interest that accrues during the deferment period. You can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. Most federal loan programs allow students to defer their loans while they are in school at least halftime. If you don't qualify for a deferment, you may be able to get a forbearance. You cannot get a deferment if your loan is in default.

Delinquent
If the borrower fails to make a payment on time, the borrower is considered delinquent and late fees may be charged. Delinquency can lead to default.

Dependency Status
For federal financial aid purposes, all graduates students are considered independent students. For Health Professions scholarships and loans, parental information is required regardless of dependency status.

Disclosure Statement
Statement of actual cost, including interest rates and finance charges, sent by the lender to the borrower upon accepting the loan and filling out a Master Promissory Note.

Educational Expenses
The cost of attendance for a student is based on tuition, fees, insurance charges and standard living expenses.

Electronic Funds Transfer (EFT)
Used by some schools and lenders to wire funds for Federal Stafford and loans directly to participating schools without requiring an intermediate check for the student to endorse. The money is transferred electronically instead of using paper, and hence is available to the student sooner.

Eligible Non-Citizen
Someone who is not a US citizen but is nevertheless eligible for Federal student aid. Eligible non-citizens include US permanent residents who are holders of valid green cards, US nationals, holders of form I-94 who have been granted refugee or asylum status and certain other non-citizens. Non-citizens who hold a student visa or an exchange visitor visa are not eligible for Federal student aid.

Emergency Loan
An emergency loan is a short-term loan available to students who are experiencing temporary financial difficulties. An emergency loan must be repaid in the term that it is borrowed. Contact the College of Medicine’s Office of Financial Services for further information.

Encumbrance
A ‘hold’ placed on a student’s academic record who fails to meet any requirement as stipulated by policy; who has an unpaid financial obligation to ETSU; or an obligation to the Office of Financial Services will not be permitted to register for future classes or receive a transcript of their academic record until the encumbrance is cleared.

Enrollment Status
An indication of whether you are a full-time or part-time student. Generally you must be enrolled at least halftime (and in some cases full-time) to qualify for financial aid.

Entrance Interview
All borrowers of federal financial aid are required to participate in a loan entrance interview to insure an understanding of your rights and responsibilities as a borrower.

Estimated Financial Assistance
The estimated amount of federal, state or other scholarship, grant, work or loan program assistance that a student has been awarded.

Exit Interview
All borrowers of federal financial aid are required to make an appointment for loan responsibility counseling in the semester preceding graduation.

Expected Family Contribution (EFC)
The amount which the student and family may be reasonably expected to contribute towards education as determined by the Federal Methodology need analysis formula approved by Congress. The EFC is determined by evaluating the information provided on the Free Application for Federal Student Aid (FAFSA). The difference between the COA and the EFC is the student's financial need, which is used in determining the student's eligibility for need-based financial aid.

FFEL
The ‘umbrella’ term for the Federal Family Education Loan Program, consisting of Federal (FFEL) Stafford Loans (subsidized and unsubsidized), Federal (FFEL) PLUS Loans, and Federal (FFEL) Consolidation Loans. The interest rate for FFEL Stafford Loans and FFEL Consolidation Loans is variable but does not exceed 8.25 percent. The interest rate on FFEL PLUS Loans is also variable but does not exceed 9 percent.

Federal Methodology
The need analysis formula used to determine the EFC. The Federal Methodology takes family size, the number of family members in college, taxable and nontaxable income and assets into account.

Federal Perkins Loan
Formerly known as the National Direct Student Loan Program (NDSL). Federal Perkins Loans are low-interest (5 percent) loans made to undergraduate and graduate/professional students. Because the school is the lender, students repay the school that made the Federal Perkins Loan or the agent the school hires to service the loan. A student must demonstrate financial need to qualify for one of these loans.

Federal Processor
The organization that processes the information submitted on the Free Application for Federal Student Aid (FAFSA) and uses it to compute eligibility for federal student aid. There are two different federal processors serving specific geographic regions.

Federal Subsidized Stafford Loan
A federal student loan made on the basis of the borrower’s financial need and other specific eligibility requirements. The federal government pays the interest on these loans while borrowers are enrolled at least half time, during the grace period, or during authorized periods of deferment. The interest rate is variable but does not exceed 8.25 percent.

Federal Unsubsidized Stafford Loan
A federal student loan made to a borrower meeting specific eligibility requirements, but not based on financial need. The borrower is responsible for paying all interest that accrues throughout the life of an unsubsidized loan. During in-school status, deferment, and forbearance periods, the borrower may choose to pay the interest charged on the loan or may allow the interest to be capitalized (added to the loan principal).

Financial Aid Package
The total amount of financial aid (federal and nonfederal) a student receives. The financial aid administrator at a postsecondary institution combines various forms of aid into a “package” to help meet a student’s need. Using available resources to give each student the best possible package of aid is one of the aid administrator’s major responsibilities. Because funds are often limited, an aid package might fall short of the amount a student is eligible for. Also, the amount of federal student aid in a package is affected by other sources of aid received (scholarships, third-party contracts, etc.).

Forbearance
Temporary postponement or reduction of payments because of the borrower’s financial difficulties. A forbearance also may be an extension of the repayment period. All borrowers are charged interest during forbearance.

Free Application for Federal Student Aid (FAFSA)
A form that must be completed to apply for federal aid. This form should be completed as soon as possible after January 1. You must reapply for aid each year. As the name suggests, no fee is charged to file a FAFSA.

Gift Aid
Financial aid, such as grants and scholarships, which does not need to be repaid unless the student withdraws during the term the aid was intended.

Grace Period
A short time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period may also begin if the borrower leaves school for a reason other than graduation or drops below half-time enrollment. The grace period for Federal Stafford loans is six months and nine months for Federal Perkins Loans.

Guarantee Agency
Agencies responsible for approving student loans and insuring them against default. Guarantee agencies also oversee the student loan process and enforce federal and state rules regarding student loans.

Guarantee Fee
A small percentage of the loan that is paid to the guarantee agency to insure the loan against default. The insurance fee is usually 1% of the loan amount (and by law cannot exceed 3% of the loan amount).

Half-Time
Most financial aid programs require that the student be enrolled at least halftime (6 hours undergraduate and 3 hours graduate) in classes required for your eligible program. Some programs require the student to be enrolled full-time.

Holder
The eligible lender (or the U.S. Department of Education) who owns the loan. The holder of your loan may be different from your original lender.

Interest
A loan expense charged a borrower for the use of borrowed money. Interest is calculated as a percentage of the principal of the loan, which includes the original amount borrowed and any capitalized interest. Accrued interest is interest that accumulates on the unpaid principal balance of a loan.

Leave of Absence
A student who takes a leave from school must receive an exit interview from the Office of Financial Services prior to leaving school. Your responsibilities of loan repayment will be discussed.

Lender
The organization that made the loan initially; the lender could be the borrower’s school (for Federal Perkins Loans); a bank, credit union, or other lending institution (for FFELs), or the U.S. Department of Education (for Direct Loans).

Loan Holder
The organization that currently ‘owns’ the loan and to which the borrower owes repayment. Many banks sell loans, so the initial lender and the current holder could be different.

Loan Principal
The total sum of money borrowed. Loan principal includes the original amount borrowed plus any interest that has been capitalized.

Master Promissory Note (MPN)
A legal contract that must be signed before receiving the loan. This form will outline your repayment rights and responsibilities.

Origination Fee
Fee paid to the bank to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed, and typically run to 4% of the amount disbursed. A portion of this fee is paid to the federal government to offset the administrative costs of the loan.

Outside Resource
Aid or benefits available because a student is in school and is counted after need is determined. Outside scholarships, prepaid tuition plans and VA educational benefits are examples of outside resources.

Outside Scholarship
A scholarship that comes from sources other than the school and the federal or state government.

Out-of-State Student
A student who has not met the legal residency requirements for the state, and is often charged a higher tuition rate at public colleges and universities in the state.

Packaging
The process of assembling a financial aid package.

Parent Contribution (PC)
An estimate of the portion of your educational expenses that the federal government believes your parents can afford. It is based on their income, the number of parents earning income, assets, family size, the number of family members currently attending a university and other relevant factors. Students who qualify as independent are not expected to have a parent contribution.

PIN
Personal Identification Number is an electronic access code number that serves as your identifier. Your PIN helps you to apply online for federal student aid using the FAFSA On the Web; ‘sign’ your application electronically and complete the student aid process totally online; make corrections to your FAFSA; access your Student Aid Report and make correction to it; access all you federal student aid records online, including any federal student loan information.

Principal
The original amount borrowed through a loan program upon which interest accrues.

Promissory Note
The binding legal document that must be signed by the student borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy and cancellations. By signing this note, the borrower agrees to repay the loan. The student should keep this document until the loan has been repaid.

Repayment Schedule
A statement the loan holder provides the borrower that lists the amount borrowed, the amount of monthly payments, and the date payments are due.

Servicer
An agency a school or lender employs to service (collect) a student loan account. Often, the borrower will deal with the loan servicer when there are questions about repayment. Servicers also approve deferments and forbearances on the lender’s behalf.

U.S. T-Bill
United State Treasury Bill. The rate at which the government lends money to the bank. Banks will increase the T-bill by a percentage to charge borrowers – known as the interest rate.