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Planning to attend college can seem an overwhelming task, especially when you are confronted with unfamiliar terms. Here are definitions of terms you’re likely to encounter along the way. Click on a letter below or scroll down and browse them all.

A    B    C    D    E    F    G    H    I    J-K    L    M    N-O    P    Q-R    S    T    U    V    W

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AA - Associate in Arts degree

AAS - Associate in Applied Science

ACE military credit - credit you receive toward your degree from previous training as a member of the United States Military (Army, Navy, Air Force, Coast Guard, Department of Defense, and Marine Corps)

Accrued Interest – interest added to the original loan

ACT - a test required or accepted at all public and many private universities in Kentucky. The ACT Assessment includes four sections-English, math, reading, and science reasoning. Scores are used in college admissions, awarding scholarships, and class placement, including honors programs.

Admission GPA - the Grade Point Average as re-calculated by the institution you are applying to - the GPA that the admission decision is based on.

Advanced Placement (AP) Program - a program that lets high school students study college-level subjects and receive advanced placement and/or credit upon entering college

Annual Percentage Rate (APR) – what you pay (as a percentage of your balance) for money you owe on Credit Cards or loans – penalties are often imposed for exceeding your Credit Limit or making a late payment

Alternative Loan - a loan other than a federal student loan that is used to pay for college expenses not covered by a student's financial aid package

Amortization - gradual reduction of a loan debt by periodic installment payments (usually monthly) of interest and principal. 

Associate’s Degree – an undergraduate degree awarded by postsecondary schools for programs which take two years to complete. It is usually the equivalent of the first two years of a four-year college or university

AS - Associate in Science degree

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Bachelor's degree - a program completed in four to five years at a college or university

Bachelor of Arts – a college or university degree focused on liberal arts / general education areas

Bachelor of Science – a college or university degree focused on science/math/technical areas

Balance – amount of money in your account at a Bank, Thrift, or Credit Union

Banks and Thrifts – institutions that make loans, pay checks, accept deposits, and provide other financial services

Bank Fees – charges the Bank deducts from your account in order to maintain it

Borrower - the person legally responsible for repayment of the loan. The student who signed the promissory note for the loan. In the case of a PLUS loan, the parent who signed the PLUS loan promissory note is the borrower.

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Campus-based Financial Aid Programs - Federal student aid programs, including Federal Perkins Loans and Federal Work-Study, administered by colleges

Cancellation - forgiveness of all or part of the loan due to specific circumstances

Capitalized Interest - unpaid accrued interest that is added to the principal balance of the loan (usually after deferment or forbearance)

Category Certified - students in good academic standing who have completed some, but not all, of the five area categories in the 33-hour Core Component

Certification - the act of attesting that something is true or meets a certain standard. For example, the school certifies the borrower's eligibility for a loan and, if applicable, interest benefits. The borrower completes an application, promissory note, or deferment form, thereby certifying that certain eligibility criteria have been met. 

Certificate - a 6- to 15-month program typically in a vocational or technical area to prepare for a job in a specific career.

Checking Account an account with a Bank, Thrift, or Credit Union – you can write checks or use a Debit Card to withdraw money from the account or to pay bills. You receive a monthly statement on the activity in your account – how much was put into the account, how much was spent, and how much is left.

CLEP - the College-Level Examination Program (CLEP) offers tests for subjects often taken during the first two college years. Many colleges use CLEP scores to award college credit. Some private industries, businesses, and other groups use CLEP scores to satisfy requirements for licensing, advancement, and admissions to training programs.

Co-maker - second borrower on a loan; this person has the same responsibilities for repayment as the borrower. The co-maker is jointly and severally liable for the debt. There may be co-makers for some PLUS loans and for Spousal Consolidation Loans. 

Commuter Students - students who live off-campus instead of in a college dormitory or other campus housing

Consolidation - program to combine multiple, eligible federal education loans. Consolidation simplifies repayment if you have loans with different lenders; may allow more years to pay off loan and lower monthly payments. 

Contract – a written agreement between two or more parties in which an offer is made and accepted. An example would be an apartment lease or a loan. Never sign a contract unless you have read and understood the terms of the agreement. A contract is legally binding, and penalties could be imposed if you fail to pay according to the agreement.

Conversion Scholarship/Loan - a scholarship or loan that requires the recipient to provide certain services for prescribed periods or pay back the borrowed funds with interest

Co-op Programs - opportunities for high-school students to see and experience first-hand what a career field will actually be like

Core Certified - students in good academic standing who have completed all of the area categories - the core component - for a total of 33 hours

CPE - Council on Postsecondary Education

Credit-by-Examination - a process by which students can earn credit for college-level knowledge by passing a test. The College-Level Examination Program (CLEP) and the Advanced Placement Program (AP) allow students to earn college credit in this way.

Credit Card – basically a 30-day interest free loan (as long as you pay the balance each month. Any balance not paid is subject to interest each month. Credit cards offer security in emergencies and a reduced need to carry cash. They also require greater personal responsibility.

Credit Hour or Clock Hour - a unit of measurement for a school's educational program.  A class meeting for an hour on three days a week typically counts for three credit hours. Most community colleges, four-year colleges, and universities use credit hours. Many private proprietary schools use clock hours. 

Credit Limit – the maximum amount you can charge on your Credit Card

Credit Union – a non-profit financial institution owned by people who have something in common. Only members of a credit union may keep money there. Credit Unions accept deposits, make loans, and provide other financial services.

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Debit Card – a card through which you access your funds at a Bank, a Thrift, or a Credit Union. The debit card is tied to your Checking Account, and the amount charged to the card is automatically deducted.

Default - failure to pay back the loan as promised. Loans are filed with guaranty agencies or the federal government for collection if past-due payments continue. The loan balance is due in full at the time of default.

Deferment – being allowed by the lender or federal government to postpone payments when the borrower meets specific eligibility requirements set by the U.S. Department of Education

Delinquent - when the borrower does not make a payment on time. Late payments are reported to credit bureaus monthly and can affect your credit rating. 

Deposit – add money to your account in a Bank, a Thrift, or a Credit Union

Diploma a program lasting up to two years in a vocational or technical area to prepare for a job. This diploma is not the same as a high school graduation diploma.

Direct Loans - loans made by the U.S. Department of Education. Students and parents can receive Direct Loans only if the school participates in the Direct Loan Program.

Disclosure Statement - fact sheet sent to the borrower when the loan is borrowed or at the beginning of repayment. The statement shows the repayment terms of the loan. 

Dual Credit - courses that count for both high school and college credit. They can save time and money in pursuing a college degree. 

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EFC – Expected Family Contribution

Electronic Payments - loan payments are deducted automatically from the borrower's bank account. 

Eligibility - you qualify for federal education loans simply by being a U.S. citizen (or eligible non-citizen) enrolled at least half-time at an eligible college. You must complete the Free Application for Federal Student Aid (FAFSA). You are not eligible for federal aid if you have federal loans in default. 

Endorser - person who agrees to be liable for repayment of the loan if the borrower does not pay the loan as agreed. The endorser is secondary liable for the debt. 

Enrollment Status - determined by the number of credit hours for which you register. In most cases, 12 credit hours or more is considered full-time enrollment; between nine and 11 credits is three-quarter-time, between six and eight credits is half time; and fewer than six credits is quarter-time. 

Expected Family Contribution (EFC) - a federal formula using the family's income and assets determines the expected family contribution toward educational expenses. The EFC is reported on the Student Aid Report (SAR). 

Experiential Credit Transfer - a process whereby students can receive credit for learning that has occurred in a non-standard or non-traditional environment. Not all institutions grant transfer credit for experiential credit.

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FAFSA – Free Application for Federal Student Aid

Federal Direct Student Loan Program (FDSLP) - low-interest loans for students and parents; includes the Federal Stafford and PLUS loan programs. Loans are obtained through a student's school and repaid to the federal government. 

Federal Pell Grant - the largest pool of federal grant money available for student financial aid. You must apply for a Federal Pell Grant, using the Free Application for Federal Student Aid (FAFSA), to be considered for other forms of aid. 

Federal Personal Identification Number (PIN) - the PIN serves as your identifier to let you access your personal information in various U.S. Department of Education systems. It's like the Personal Identification Number you get from your bank that enables you to access your bank account. Because your PIN serves as your electronic signature, you should not give it to anyone except persons assisting you with your application, corrections and renewal.

Financial Aid - money which can come from state and federal governments, schools, private organizations, associations, and companies to help pay the costs of a college education or technical training

Financial Aid Award Notifications - letters from the colleges to which you have applied for financial aid informing you of your eligibility

Financial Aid Package - the total financial aid award received by a student. It may consist of several types of aid, including grants, scholarships, loans, work-study, and other aid. The student's financial need, availability of funds, school aid policies, and the number of students who need financial assistance all influence the financial aid package.

Financial Need - the amount of higher education expenses that a student's Expected Family Contribution (EFC) falls short of paying. Financial need equals the cost of education minus the EFC.

Fixed Interest Rate - interest rate that remains the same over the life of the loan

Flexible Repayment - the repayment period for education loans is usually 10 years. However, depending on the amount you borrowed, you can choose to lower your monthly payments by taking as long as 25 or 30 years to pay back your loans. You can temporarily reduce the amount you pay when facing difficulties. You can even postpone repayment if you meet certain qualifications (such as economic hardship or unemployment). The longer you take to pay off a loan, the more you pay (because additional interest accumulates over time).

Forbearance - a period of time during which the lender permits the borrower to temporarily stop making payments or reduce the amount of the payments. The borrower is liable for the interest that accrues on the loan during the forbearance period. Some forbearances are entitlements for eligible borrowers; others are granted at the discretion of the lender.

Four-year Colleges/Universities - public or private: nonprofit or for-profit institutions. Most programs lead to a bachelor’s degree. Universities also offer degrees above the bachelor’s degree.

Free Application for Federal Student Aid (FAFSA) - the form students must complete to apply for federal Title IV financial assistance, including Stafford loans. The student must include financial information on the student's household so that the expected family contribution can be calculated.

Free Electives - the elective requirement can be filled by taking any course desired.

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General Education Transfer Policy - an agreement between Kentucky's public universities in which they agree to recognize the completion of AA/AS transfer degrees by admitting students to junior level standing and accepting the corresponding general education credits as meeting institution-wide, lower-division general education requirements at the receiving institution.

Grace Period – the time period between leaving school, graduation, or dropping to less than half time and when the first payment on student loans is due

Graduate Student - a student who has earned a bachelor's degree and is working toward a master's, doctoral, or professional degree.

Graduated Repayment  – payments that start low and increase over time

Guaranty Agency – an agency that insures student loans against default. If the borrower defaults, dies, or becomes totally and permanently disabled the Guaranty Agency reimburses the lender for the balance of the loan.

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Holder - lender or secondary market that owns the promissory note. May be guaranty agency or U.S. Department of Education in case of defaulted loan

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Income-sensitive Repayment - payment amount is based on the borrower's income and amount of education loan debt.

Independent Institutions - postsecondary institutions that are supported by private funds rather than state funds

Institutional Aid - various types of student financial assistance administered by the school.

Installment - periodic payment amount; for Stafford, PLUS, and Consolidated Loans, payments are required monthly. 

Interest Rate/Finance Charge - what the borrower pays to use the money borrowed. Set by the federal government, this varies depending on the type of loan. The interest you pay on your education loans during repayment may be tax-deductible, up to a certain amount. The deduction is phased out at certain income levels. If you pay taxes, you can think of this as paying less total interest on your loan (you pay it, then get some of it back in the form of owing less tax). 

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Kentucky Higher Education Assistance Authority (KHEAA) - the state agency that helps students attend college by administering student financial aid programs, providing free college planning materials, and distributing financial aid information

KY CAS - Kentucky Course Applicability System used to determine how each individual course will transfer

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Lender - bank or student loan company that lends money

Loan - money borrowed to help pay for college costs. Loans must be repaid with interest.

Loan Forgivement - when the balance of a loan is no longer due, and is without negative impact on the borrower

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Major - the primary field of study chosen by a college student

Minor - the secondary field of study chosen by a college student

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Need Analysis - a process used to determine how much students and their families can reasonably be expected to pay toward college expenses. Need analysis formulas are updated each year by the federal government and other organizations to reflect changes in the economy. 

National Credit Bureau - records financial information about the borrower for use by potential creditors. Education loan information is reported to national credit bureaus monthly. 

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Pell Grant - the largest pool of federal grant money available for student financial aid. You must apply for a Federal Pell Grant, using the Free Application for Federal Student Aid (FAFSA), to be considered for other forms of aid. 

Perkins Loans - low-interest loans made under the Federal Perkins Loan Program to undergraduate and graduate students through your school. You repay the school or the agent the school hires to service the loan. These loans are made based on financial need. 

PIN (Federal Personal Identification Number) - the PIN serves as your identifier to let you access your personal information in various U.S. Department of Education systems. It's like the Personal Identification Number you get from your bank that enables you to access your bank account. Because your PIN serves as your electronic signature, you should not give it to anyone except persons assisting you with your application, corrections and renewal. 

PLUS Loan - loan for parent or legal guardian of dependent student enrolled at least half time in an eligible program. The parent borrower owes interest as soon as the loan is made. Repayment begins when the final disbursement is issued. (A parent's credit history is reviewed when applying for a PLUS loan, but only to determine if there is a history of late payments or other adverse circumstances.) 

Postsecondary Education - education beyond high school; includes vocational/technical training schools, proprietary schools, community colleges, four-year colleges, universities, and training programs

Principal - the total sum of money borrowed. Loan principal includes the original amount borrowed plus any interest that has been added to the loan

Promissory Note – a legally binding contract between a lender and a borrower. The borrower agrees to pay back the loan to the lender, including interest.

Proprietary Schools - schools that are privately owned and licensed. These usually offer certificates, diplomas and associate’s degrees, although some offer bachelor’s and master’s degrees. Sometimes called Trade Schools

Public Institutions - postsecondary institutions that are supported in part by state funds

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Repayment Period - the period that begins after the expiration of the grace period during which the borrower must make regular installment payments of principal and interest. The maximum term of repayment is generally 120 months.

Restricted Electives - courses or choices among a specified list of courses

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SAR – Student Aid Report

SAT I: Reasoning Test - a three-hour test typically taken as a junior or senior in high school. The multiple-choice questions are divided into math and verbal sections. It is scored up to 800 for each section. Scores are used for admissions purposes and in awarding scholarships.

SAT II: Subject Tests - one-hour tests given in specific subjects such as mathematics, science, English, or foreign languages. More selective postsecondary schools require two or three for freshman placement.

Savings Account – an account with a Bank, Thrift, or Credit Union that holds money deposited to accumulate and earn interest

Scholarships - gifts of money to students from state, federal, or private sources. While state and federal grant programs are based on financial need, scholarships may be based on a variety of factors, including need, academic excellence, leadership qualities, heritage, or extracurricular interests. 

Secondary Market - state or private agency that purchases the loan from the original lender. This provides money for the lender to make more education loans. 

Servicer - state or private agency that processes the borrower's payments, forbearances, and deferments, answers the borrower's questions, and helps the borrower find options to help with repayment

Spousal Consolidation - spouses can combine eligible federal education loans. Spouses are co-makers and are jointly and severally liable for the total debt. 

Stafford Loans - loans made to undergraduate and graduate students under the FFEL and Direct Loan programs. Borrowers can receive FFEL or Direct Stafford Loans regardless of financial need. The interest rate is variable but does not exceed 8.25 percent. 

Statewide Transfer Framework - allows a block of credits to transfer to any other public bachelor's degree program offered in Kentucky

Student Aid Report (SAR) - a document produced from information provided on the Free Application for Federal Student Aid (FAFSA) and sent to the student. The SAR reports the student's eligibility for aid and Expected Family Contribution (EFC).

Subsidized Stafford Loan – low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college or trade/career/technical center

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Technical Colleges - public institutions that offer certificates, diplomas or associate’s degrees. In Kentucky, the Community Colleges and Technical Colleges are part of one system: KCTCS (Kentucky Community and Technical Colleges System). 

Term - number of months the borrower has to pay back the loan, not including months of deferment or forbearance

Thrifts and Banks – institutions that make loans, pay checks, accept deposits, and provide other financial services

Trade Schools privately-owned schools that provide a wide range of courses of study, such as cosmetology, business, and broadcasting. Programs range from 2 to 24 months and lead to certificates or diplomas in a variety of subjects. The preferred term is Proprietary School.

Transcript - an academic record that lists the courses taken, grades received, and credits or credit hours received

TRIO Programs - educational programs funded through the U.S. Department of Education to assist youth and adults in entering postsecondary education. Programs in TRIO include: Educational Talent Search (serves middle and high school students), Educational Opportunity Centers (serves adults), Upward Bound (serves high school students, Ronald McNair Postbaccalaureate Achievement Program (serves graduate students); Student Support Services Program (serves students enrolled in postsecondary institutions). 

Tuition - the amount schools charge for instruction and for the use of certain school facilities such as libraries

Two-year Colleges/Community Colleges - two-year public institutions that lead to an associate’s degree. Most have programs designed to transfer earned credits to four-year institutions for completion of a bachelor’s degree. 

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Undergraduate Student a college student who has not yet earned a degree

Unsubsidized Stafford Loan – low-interest loan for students enrolled at least half time in an eligible postsecondary program. The borrower owes interest as soon as the loan is made. 

U.S. Department of Education - the agency that makes rules for education loans based on laws enacted by Congress

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Variable Interest Rate - the interest rate changes periodically

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Waiver - an arrangement under which a school does not charge specific costs if a student meets certain qualifications

Withdrawal – take money out of your account at a Bank, Thrift, or Credit Union

Work-Study - employment which lets students earn money to help pay the costs of higher education