• Federal Direct Student Loan Program (FDSLP) - The program name for loans that are both guaranteed and funded by the federal government. If you study at a "Direct Lending School", your Stafford Loan is administered by the Federal Direct Student Loan Program (FDSLP). The U.S. government provides funds for "direct loans" directly to students and their parents through their schools. You can obtain applications from your school. Guarantee agencies and banks are not involved in the process.
• Federal Family Education Loan Program (FFELP) - The collective name for the Federal Stafford and PLUS Loan programs. Private lenders fund FFELP loans.
• Federal Methodology Expected Family Contribution (FM EFC) - It is a specific EFC calculated by the federal government based on information submitted on the FAFSA. Each year the FM EFC calculation is set by the U.S. Department of Education and determines eligibility for federal aid programs.
• Federal Student Loan Consolidation - It is the process of taking multiple federal student loans and combining them into one lower monthly payment.
• Federal Supplemental Education Opportunity Grant (FSEOG) - A need-based financial aid program funded by the federal government. An annual allocation of FSEOG is received by colleges, which within certain guidelines develop an awarding policy for this fund.
• Federal Work Study (FWS) - Federally funded program that allows colleges and universities to create campus based employment programs for financial aid recipients.
• Financial Need - The difference between a student's Cost of Attendance and Expected Family Contribution. Financial need is the amount of financial aid the student needs to afford attendance at a particular college.
• Fixed Interest - Refers to loan interest rates that will not change throughout the entire lifecycle of the loan.
• Forbearance - Act of temporary postponing payments, including extending the time needed for making payments. It can also refer to the acceptance of smaller payments than originally scheduled. Lenders grant forbearance to reduce the incidence of defaulted loans and simplify the administration of the loan programs.
• Free Application for Federal Student Aid (FAFSA) - The FAFSA is the official application form for all federal financial aid programs.
• Grace Period - The time period between a student's graduation (or termination) and the beginning of loan repayment. Grace period usually lasts six to nine months.
• Graduated Repayment Plan - This option is available for federal loans, and even some alternative loan providers offer graduated repayment. Under graduated repayment, payments are low (usually just enough to cover the loan's accruing interest) when the borrower first enters repayment. Periodically, the payments increase to pay off the loan in the standard 10 year repayment term. The idea of graduated repayment is to have low payments while a borrower is first entering the working world. Then, as income increases, the student loan payments also increase.
• Grants - A type of financial aid award that does not have to be repaid. Grants are often made based on an applicant's financial need or EFC.
• Guaranty Agency (Guarantor) - One of approximately forty companies throughout the country that financially guarantee that loans made by lenders under the FFELP will be repaid. Typically guaranty agencies retain a percentage of each student loan to maintain a fund to cover unpaid loans.
• Guarantee Fee - A type of fee a borrower pays to a lender. These fees are collected as a financial reserve to protect the loan program in cases of student default. The PLUS, Stafford and Federal Direct loan guarantee fee is a maximum of 1% of the loan's principal balance.
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