Interest on a loan that accumulates and is to be paid in installments at a later time (usually when the principal becomes due) rather than being paid from the time the loan is made. Accrued interest may be compounded or simple.

Taxable income after all allowable deductions are made, such as IRA deductions, moving expenses, self-employment taxes and health insurance, Keogh retirement plans, and alimony paid.

A sum subtracted from a family's total assets when determining the "expected family contribution" to college costs. This provides a safety net for families, and the allowance increases with the age of the parents.

Any "legal entity" -- a person or group--that obtains funds from a lender for a particular period of time. A borrower signs a "promissory note" as evidence of indebtedness.

To add unpaid accrued interest to unpaid principal. This increases your total outstanding principal. Thus, if you choose a lender that capitalizes once a year or more, you may be paying interest on interest.

Interest that is periodically added to a principal sum, resulting in a new principal balance, which then triggers a new interest assessment.

A method of combining several loans into a single loan with an extended repayment term of up to 30 years. This can be an effective method of lowering your monthly payment.

Weighted average interest rate - The interest rate determination used for Consolidation loans made on applications received on or after October 1, 1998. To determine the weighted average interest rate of a group of loans: Multiply each loan amount by the interest rate for that loan. Add the totals together. Divide the resulting number by the total dollar amount of all the loans in the group. The number you get is the weighted average interest rate.

Consolidation Example:

John has two loans -- a $10,000 loan at 8.25% and a $2,000 loan at 9%.

Step 1: 10,000 x 8.25 = 82,500 and 2,000 x 9.00 = 18,000

Step 2: 82,500 + 18,000 = 100,500

Step 3: 100,500 divided by 12,000 [10,000 + 2,000] = 8.375

Thus John's weighted average interest rate for the two loans is 8.375%

The total amount it will cost a student to attend college for a year, including tuition and fees; housing and food for the period of enrollment; books and supplies for education; travel costs directly related to attendance; child care expenses; and costs related to a handicap. Other expenses may be added at the discretion of a college's financial aid administrator. Students are supported for the cost of their own education for the duration of one academic year.

An agency that compiles and distributes credit and personal information to creditors. This information may include payment habits, number of credit accounts, balance of accounts, and length and place of employment. Note: You have the right to examine your credit file and to explain or correct information. There is usually a fee for this, but there is no charge if you have been denied credit because of information in a particular credit bureau's file.

Failure to repay your student loan. You are considered in default if you have made no payments for 180 days and are not in your grace period, deferment or forbearance. Defaults are recorded on permanent credit records and may result in prosecution and/or loss of future borrowing possibilities.

A time when you are not required to make payments. During the deferment, interest continues to accrue on the loan. Deferments may be granted for reasons such as half-time study, unemployment, economic hardship, graduate fellowships and rehabilitation training.

Interest payments that are delayed while a borrower is not gainfully employed, as, for example, when the borrower is a student. This benefit is generally characteristic of federal and state guaranteed student loans.

Failure to make a loan payment when it is due. If you are more than 90 days delinquent, your delinquency will be reported to the national credit bureaus and will negatively affect your credit rating. If you are delinquent for 180 days, you are considered in default.

A student claimed as a dependent member of household for federal income tax purposes.

NOTE This Exception: For purposes of Federal Title IV Aid (Stafford Loans) all Graduate/Medical Students are considered INDEPENDENT even if they are declared a dependent on their parent’s income tax returns.

The date the loan check is issued by the lender. Some lenders issue loan funds electronically.

A financial aid applicant who is not a U.S. citizen but is eligible to receive federal Title IV aid because he or she is a permanent resident, non-citizen national, or a resident of the Trust Territory of the Pacific Islands or Micronesia.

Required counseling session at which a college administrator, usually a financial aid officer, must inform student financial aid borrowers about their rights and responsibilities.

A counseling session conducted when the student is leaving college at which the student's loan obligation and responsibilities are reviewed.

A figure determined by a congressionally mandated formula which indicates how much of a family's resources should be considered "available" for college expenses. Factors such as taxable and nontaxable income and the value of family assets are taken into account to determine a family's financial strength. Allowances for maintaining a family and future financial needs are then taken into consideration before determining how much a family should be able to put toward the cost of college.

The official application students must use to apply for federal aid.

A standard method of calculating how much a family should be expected to contribute toward college costs. All the federal funds are awarded based on this need analysis formula.

A Federal Education Loan Program for students. Stafford Loans can be either government-subsidized, in which case the government pays any interest while the borrower is attending college, or unsubsidized, in which case interest begins to accrue when the loan is made.

A federal, need-based financial aid program through which eligible students can earn a portion of their college expenses. Work-study awards are made by colleges, but a portion of the funding comes from the federal government. Several states also have work-study programs that are similar to the federal program.

Written notification to an applicant from a college that details how much and which types of financial aid are being offered.

Please Note: You will not receive this letter until you have returned all of the required OU-COM Financial Aid Applications and Forms.

The difference between a college's cost of attendance and a family's ability to pay (Expected Family Contribution) as calculated by the need analysis methodology.

A rate of interest that is set at the time a loan is negotiated and that remains constant over the life of the loan.

A temporary end to or reduction of payments which may be granted in cases of financial difficulty when you are not eligible for a deferment. Interest continues to accrue on your account.

A legal term that means to take away something you own--such as property or part of your salary--and use it to pay the debt you owe.

Grant and scholarship money given as financial aid that does not have to be repaid.

A period of time that starts when you cease to be enrolled at least half time and ends when the repayment period starts. You do not have to make loan payments during the grace period.

A family's or individual's total income before deductions.

The organization that administers the Federal Education Loan Programs in each state and insures lenders against losses due to a borrower's default, death, disability, or bankruptcy.

Presently, OU-COM Students who use the school's Osteopathic Student loan have their loans guaranteed through ASA (American Servicing Association).

An insurance fee, usually paid by the borrower, that the guarantee agency charges a lender. The fee for a Federal Stafford or PLUS Loan is 1%.

The lender or secondary market that owns (holds the promissory note on) your loan.

The federal agency responsible for administering immigration procedures and assigning citizenship status.

A student who reports only his or her own income (and that of a spouse, if relevant) when applying for federal financial aid. Students who will be 24 or older by December 31, 2002, will automatically be considered "independent" for 2002-2003. Students who are under 24 will be considered independent if they are:

• married and not claimed as a dependent on their parents' 2001 federal income tax return
• the supporter of a legal dependent other than a spouse
• a veteran of the U.S. Armed Forces
• an orphan or ward of the court
• classified as independent by a college's financial aid administrator because of other unusual circumstances
• a graduate or professional student (Medical Students)

Please Note on the FAFSA if you want to be considered for OU-COM Institutional Scholarship(s), a (PCL) Primary Care Loan or (LDS) Loans for Disadvantaged Students you would need to submit parental data for consideration.

All the non-tuition-related costs associated with attending college, including room, board, transportation, medical, and personal expenses.

A standard method of determining a student's or family's ability to pay for college used by individual colleges in awarding their own institutional funds for financial aid. However, colleges must use the Federal Methodology in awarding any federal funds.

A fee charged to guarantee student loans against loss through default. The amount charged is usually deducted from the disbursement of the principal.

Money you must pay for the privilege of borrowing money, expressed as a percentage of the outstanding principal.

Interest payments made by the federal government to the lender of a Subsidized Federal Stafford or Direct Loan while the borrower is enrolled at least half-time or is in a grace period.

All the answers to your income tax questions are located at www.irs.gov

One who provides money on the condition that the money be returned, usually with an interest charge.

NOTE: Presently, OU-COM Students using the Kirksville NOW Loan Program use Kirksville College of Osteopathic Medicine as their lender.

The method of calculating a family's expected level of financial contribution toward college costs, resulting in an estimate of the amount of financial assistance a student will "need."

The U.S. Department of Education that has the responsibility for administering federal student financial aid programs and for developing aid policies and procedures.

A processing fee charged to a borrower by a lender to make a loan. This fee, like the guarantee or insurance fee, is usually subtracted from the amount of a loan.

A situation that occurs when a student's family contribution plus any financial aid awarded exceeds the cost of attendance at a given college. Overawards result most often when a student's enrollment status changes or when additional resources (such as a private scholarship) become available to a student.

The full amount you have borrowed, or that you have not yet repaid (this may include capitalized interest). Interest is calculated as a percentage of this amount.

The legal authority of financial aid administrators to change a calculated Expected Family Contribution or any of the elements used in the calculation based on additional information or individual circumstances that would lead to a more accurate assessment of a family's financial condition.

A contract that legally binds a lender and a borrower. The note details all the terms and conditions of a loan, including the amount, the interest rate, and repayment obligations.

A document you will receive shortly after you graduate or leave school that states how much you owe, what your monthly payment is and when your first payment is due, the number of payments required to pay back the loan in full, and the due date of each payment.

Institutions that buy loans from lenders, usually at a discount. This practice provides more capital for lenders to make additional loans. If a loan is sold, the secondary market is responsible for managing and servicing it. The sale of a loan does not affect the borrower since the terms of the loan remain the same. . If your loan is sold and the payment address changes, you will be notified by mail and given a new address for future loan correspondence.

The act of handling all correspondence and monetary activities on a loan after it has been disbursed and/or while it is in repayment. This can include borrower address updates, refunds, deferments, forbearances and payments. Many holders contract with an outside company, or servicer, to carry out these functions.

Interest computed only on the original amount of a loan.

An official document that colleges create for each student applying for federal aid.

One of the types of Stafford loans. The U.S. government pays the interest on this loan for you while you are in school, during your six-month grace period, and during periods of authorized deferment.

The length of time you have to repay your student loan. Generally, this will be up to 10 years for federal loans; if necessary, you can take measures to extend your repayment term.

The interest rates for federal (and many private) student loans are based on the results of Treasury Bill auctions held throughout the year by the U.S. government. Treasury Bills and other "securities" are sold to the public to pay off maturing debt and to raise the cash needed to operate the federal government. The T-Bill is a type of security that matures (comes due) in one year or less. Thus, investors who buy them are making a short-term loan to the federal government. For example, the 52-week T-Bill matures in 52 weeks (1 year), meaning that the investor gets his or her return, plus interest, after one full year has passed.

When the combination of a student's financial aid package and the family contribution does not cover the costs of attending a particular college, the gap is called the Unmet Need.

One of the types of Federal Stafford loans. This type of loan accrues (collects) interest while you're in school, during your six-month grace period after leaving school, and during authorized periods of deferment and forbearance.

The rate of interest that changes during the life of a loan on a regular basis and is generally tied to an index. Some student and parent loan programs have variable interest rates that change annually based on the one-year Treasury Bill rate.

A process by which a financial aid office substantiates the data that a financial aid applicant has reported on the FAFSA. The Department of Education and/or OU-COM randomly selects 30% of their students for this process, based on the information you submitted on the FAFSA. Verification is a process the Department of Education uses to make sure that the information applicants report is accurate. This prevents ineligible students from receiving aid by reporting false information and it ensures that eligible students receive all of the aid they are qualified for. If you are selected OU-COM will automatically mail you a verification worksheet to complete and you will be required to provide copies of other appropriate forms as well. Your financial aid will not be processed until you return the required documentation.