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Glossary of Terms

Award Letter: The Office of Financial Aid sends the award letter to students with completed application to provide information on the types and amounts of aid offered, specific program information, student responsibilities and the conditions that govern the award.

Award Year: The Hope College award year includes the fall and spring semesters and the subsequent summer sessions.

Capitalization of Interest: Capitalizing interest means adding unpaid, accumulated interest to the principal balance of your loan. Capitalization increases the total cost of your loan because you repay more money in total than if you pay the interest while you are in school. Whichever option you choose, you are responsible for paying the full amount of interest on the loan.

Central Processing System (CPS): The federal contractor that processes your FAFSA data. The CPS performs database matches and calculates your official Expected Family Contribution (EFC), sends you your electronic Student Aid Report (SAR), and electronically transmits your FAFSA data (your ISIR record) to Hope College.

Collection Agency: A business organization that accepts from schools and lenders loan accounts that have become delinquent or are in default and attempts to collect the balances.

Commuter Student: The definition of a commuter student at Hope College is student who is enrolled in on-campus coursework but is not living in on-campus housing.

Cost of Attendance: Your cost of attendance includes tuition, activity fee, room/board charges, and allowances for books/supplies, transportation, and other miscellaneous expenses.

Default: The failure of a borrower to make an installment payment when due, or to meet other terms of the promissory note under circumstances where the school, servicing agency, or Secretary of Education finds it reasonable to conclude that the borrower no longer intends to honor the obligation to repay.

Deferment: A period of time during which students are not required to make loan payments, such as while enrolled at least half-time (six hours or more). Federal Direct Unsubsidized Loans have interest accruing during periods of deferment (see Unsubsidized below).

Dependent Student: A student who does not qualify as a self-supporting/independent student by federal definition and whose parental income and asset information is used in calculating the Expected Family Contribution/EFC (see independent student).

Disbursement: The process by which your financial aid funds are applied to your account as credits to offset your billing charges. Typically, one-half of your financial aid award is credited to your fall semester charges and the other half is credited to your spring semester charges.

Disclosure Statement: A statement from the Federal Direct Loan servicer that explains the specific terms and conditions of your student loan, such as interest rate, loan fees charged, gross amount borrowed, etc. Disclosure statements are generated each time you receive a Federal Direct Loan disbursement.

Electronic Promissory Note: A Federal Direct Loan or Federal Perkins Loan Promissory Note that a borrower signs electronically on the Web (in lieu of a paper document). An FSA ID is required and serves as the borrower's electronic signature. (See Master Promissory Note and Promissory Note definitions below).

Electronic Signature: Student borrowers can electronically sign both their Federal Direct Loan and Federal Perkins Loan promissory notes online using provided FSA IDs that serve as their electronic signature.

eSAR (electronic Student Aid Report): A summary of the information that the applicant put on the FAFSA. The CPS electronically provides a link to the eSAR to each federal aid applicant that has provided an email address on the form. If the applicant did not provide an email address, the CPS will send a paper version (see SAR below). If applicants need to correct information reported on the eSAR, they should do so on the FAFSA website.

Expected Family Contribution (EFC): The amount a student and his/her family are expected to contribute toward the student's cost of attendance as calculated by the congressionally mandated formula known as the Federal Methodology. This EFC is derived from the data you submit on the FAFSA.

FAFSA: Free Application for Federal Student Aid. To apply for federal student financial aid, and to apply for many state student aid programs, students must complete a Free Application for Federal Student Aid (FAFSA). The information you provide on your FAFSA determines if you are eligible for financial aid.

FAFSA - Free Application for Federal Student Aid


FERPA: The Federal Educational Rights and Privacy Act.
Hope College Statement of Policy on Student Records

Financial Aid Package: An offer of financial aid made to a student that is comprised of a combination of different forms of financial aid (scholarships, grants, loans, employment).

Financial Need: The difference between the school's cost of attendance (COA) and the computed family's ability to pay (or EFC). COA minus EFC = Financial Need.

Forbearance: Permitting the temporary halting of loan repayments, allowing an extension of time for making loan payments, or accepting smaller loan payments than were previously scheduled. Interest continues to accrue during periods of forbearance.

FSA ID: A student's or parent's Personal Identification Number from the U.S. Department of Education that allows the student to access her/his student aid application and federal assistance information on the Internet. FSA IDs are also used as electronic signatures when applying for aid through the FAFSA on the Web. Department of Ed FSA ID Web Site.

Fulltime Enrollment: Enrolling for 12 or more credit hours in a given semester.

Gift Aid: Normally refers to scholarships and grants that are non-repayable forms of financial aid. Some of these awards have grade point renewal criteria while others do not.

Grace Period: The period of time that begins when a student borrower ceases to be enrolled at least halftime (6+ credit hours) and ends when the repayment period begins. Loan principal need not be paid and interest does not accrue on need based loans during this period. Note: Direct subsidized loans will not be eligible for an interest subsidy during the six-month grace period on loans disbursed after July 1, 2012 and before July 1, 2014. Borrowers of subsidized Stafford Loans first disbursed on or after July 1, 2014 are once again eligible for an interest subsidy during the 6-month grace period.

Grant: A type of financial aid that does not have to be repaid; usually awarded on the basis of financial need.

Independent/Self-Supporting Student: A student who meets the definition of an independent student does not report parental information on the FAFSA. Instead, need is based solely on his/her (and spouse if married) income and asset information.

Institutional Student Information Record (ISIR): The electronic format of a student's FAFSA information from CPS (see above) used by a school to determine the student's eligibility for financial assistance.

LIBOR: An abbreviation for the London Inter-Bank Offered Rate, an interest rate set daily in London. Many private educational loans base interest rates on this index and employ short term adjustments.

Loan: A form of financial assistance that requires repayment, generally after the student graduates or ceases to be enrolled at least half-time (six hours or more).

Loan Cancellation: Forgiveness from repaying a portion of a specified student loan based on the student entering an identified profession or volunteer organization or because of other qualifying circumstances.

Master Promissory Note/Direct Loans: This document acts as a student's promise to repay Federal Direct subsidized and unsubsidized loans. The master note feature allows the student to sign only once for her/his first loan proceeds, and continues to bind the student to repay all future amounts borrowed under the program. Master Promissory Notes are made available online and can be electronically signed using an FSA ID. (See FSA ID definition above).
Master Promissory Note - Direct Loans

Master Promissory Note/Perkins Loan: Students who borrow under the Federal Perkins Loan program are required to sign a promissory note documenting their loan along with their promise to repay upon graduation or less than half-time enrollment (less than six hours).

Perkins Promissory Note/PIN

Master Promissory Note/PLUS Loan: A document with a promise to repay that parents must sign the first time they borrow for each child under the Federal Direct PLUS loan program. Parents submit an application to the college and, if approved by the Department of Education, the Master Promissory Note is made available online and can be electronically signed using a FSA ID. (See FSA ID definition above).

National Student Loan Data System (NSLDS): A U.S. Department of Education web database that records a student's federal grant and loan information and allows student access with use of a federal FSA ID (see above. National Student Loan Data System.

Need Analysis: A congressionally mandated formula that analyzes students' and their parents' household and financial information reported on the FAFSA, to determine a family's estimated ability to contribute to the cost of education. Schools use the resulting EFC (see above) to determine aid eligibility based on the cost of attendance.

On-Campus Student: Hope College's definition of an "on-campus" student is one who lives in the college residence halls/cottages/apartments or is attending a Hope affiliated off-campus student program.

Outside Scholarship/Award: A form of financial assistance from a source other than the traditional federal, state and institutional student assistance programs (e.g, from a church, a foundation, etc.), that usually does not have to be repaid. Outside scholarships must be considered when calculating a student's eligibility for need-based aid.

Overaward: Occurs when a student receives financial assistance in excess of demonstrated need, requiring a reduction or repayment of some aid funds.

Part-time Enrollment: Enrollment level less than 12 credits during a semester or term.

Prime Interest Rate: Some private educational loans base interest rates on this index and employ short term adjustments.

Repayment Schedule: A calculated list of monthly loan payments over a certain period of time based on the student's total amount borrowed and the interest rate in effect at the time of repayment.

Satisfactory Academic Progress: Federally required minimal standards of academic progression toward a degree that student aid applicants must meet to remain eligible for financial aid funds.

Scholarship: A form of student assistance based on academic achievement or some other form of talent or accomplishment. Scholarships usually do not have to be repaid.

Self-Help Assistance: Loans and work-study funds.

Student Aid Report (SAR): A paper summary of the information provided on the FAFSA that the CPS sends to federal aid applicants. (Applicants that give an email address on the FAFSA receive an eSAR instead, see above). The SAR includes an acknowledgement letter and a section that may be used to make corrections if necessary. Corrections can also be made electronically at www.fafsa.ed.gov using the federal FSA ID.

Subsidized Loan: A student loan based on demonstrated financial need on which no interest is charged while the student maintains at least half-time enrollment (six hours or more.)

Supplemental Application: A form that schools may require in addition to the FAFSA. Hope College's Supplemental Application for Financial Aid (SAF) is an example.

Educational Computer Systems, Inc. (ECSI): Hope College's servicing agent for the Federal Perkins Loan program. ECSI administers the electronic promissory note process for Perkins Loan borrowers at Hope College and services Perkins Loans throughout the repayment period.

Unsubsidized Loan: A loan that students may receive in addition to need-based financial assistance where interest charges accumulate while the student is enrolled. The student may choose to make interest and principal payments, interest payments only, or have interest accumulate and be "capitalized" (see above) while enrolled at least half-time (six hours or more).

Verification: A federally required quality control measure to ensure the accuracy of data reported on the FAFSA. Students with applications selected by the CPS (see above) must submit household and financial information to the Office of Financial Aid as requested.