Accrued Interest: Interest added to a loan before repayment of principal begins.
Award letter: A summary of all scholarship, grant, loan and work assistance being offered to a student. Students must accept or reject any pending assistance each year before that assistance can be applied to their account.
Borrower: A student (or parent) who takes out a loan that must be repaid.
Capitalization: Interest that is computed and added to the principal to arrive at a new balance. Interest is now calculated on new balance.
Consolidation: The borrower's option to combine federal loans by selling or transferring all loans to one holder when repayment begins.
Cost of Attendance (Student Budget): A student's cost of attendance includes an allowance for actual tuition, actual fees, average books/supplies and average living expenses. The cost of attendance can be adjusted in certain instances when a student appeals to have other expenses included. Other allowable items include unreimbursed medical expenses, health insurance, daycare expenses for dependents, loan fees, a one-time per program allowance for a laptop or tablet, and up to two round-trip plane tickets per academic year to see family.
Default: The failure of a borrower to make a scheduled payment or to comply with other terms agreed upon for nine consecutive months. Defaults are recorded on a borrower's credit history.
Deferment: The option to postpone repayment of a loan during specific periods of time in accordance with other provisions of the loan terms. Interest on subsidized loans is waived during periods of authorized deferment.
Delinquency: Failure to make a loan payment or file a deferment/forbearance form when it is due.
Disadvantaged Background: An individual from a disadvantaged background is defined as someone who:
- comes from a family with an annual income below a level based on low-income thresholds according to family size, as published by the US Bureau of the Census (adjusted annually for changes in the Consumer Price Index). This amount corresponds to 200 percent of the poverty guidelines established for the calendar year in question; OR
- comes from an environment that has inhibited the individual from obtaining the knowledge, skill and abilities required to enroll in and graduate from a school. Rush University's Office of Student Financial Aid defines environmentally disadvantaged as:
- Person from high school with low average SAT/ACT scores or below the average State test results;
- Person from a school district where a lower percentage than the State average go to college;
- Person who has a diagnosed physical or mental impairment that substantially limits participation in educational experiences;
- Person whose first language is not English and for whom language is still a barrier to academic performance;
- Person who is first generation to attend college;
- Person from a high school where a higher percentage than the State average of enrolled students are eligible for free or reduced priced lunches
- Person who, for the majority of the time from birth to age 18, were raised in a single-parent household;
- Person comes from an area that is listed as a Health Professional Shortage Area by HRSA;
- Person who was living in a city with a population of less than 10,000 or a county with a population of less than 25,000 at the time they graduated high school; OR
- Person who comes from a family who receives public assistance
Disclosure Statement: A statement reflecting the total cost of a loan (including interest and any charges) that the borrower will be responsible to pay.
Estimated Family Contribution (EFC): A number calculated when a student completes the Free Application for Federal Student Aid (FAFSA). It is defined as the amount of money a student (and their family, as applicable) can reasonably be expected to contribute toward their educational costs for that academic year. Students are able to cover their EFC with a non-need-based student loan, if needed.
Forbearance: The temporary cessation of payments (principal and/or interest) or lessening of payments for a specific period of time.
Grace Period: A specific period of time following graduation or when a student drops below at least half-time status during which no payment is due on an educational loan. Repayment begins after the grace period ends.
Institutional Funds: Grant and loan funds that are controlled and awarded from Rush University endowments, contributions from alumni and other sources, and are awarded based on institutionally defined criteria.
Loan Fee: An amount used to insure the lender against loss in the event that the borrower defaults. The fee is taken by the lender/guaranty agency from the loan proceeds before the funds arrive at Rush.
Need: A student's need is defined as the difference between their cost of attendance, Estimated Family Contribution (EFC), and any estimated financial assistance.
Need Analysis: The process of determining a student's expected family contribution from the assets and income of the student, parent(s) and spouse.
Prepayment: Making loan payments before they come due. This will decrease the amount of interest the borrower repays. Typically, there is no prepayment penalty on any educational loan.
Principal: The loan amount borrowed and the amount upon which interest accrues.
Promissory Note: The legal document a student signs when receiving any type of educational loan which he/she promises to repay. The document lists the conditions and terms the student must agree upon when accepting loan funds.
Secondary Market: An organization which purchases educational loans from lenders. This allows lenders to replenish capital to fund new loans.
Servicer: A company contracted by a lender to perform the administrative tasks that are associated with disbursement and collection of a loan.
Subsidized: Interest is paid while in-school and deferment (depending on terms of the loan note), and the borrower does not repay.
Title IV Funds: Federal financial aid programs including Federal Pell Grant, Federal Perkins Loan, Federal Supplemental Educational Opportunity Grant, Federal College Work-Study, Federal Subsidized Stafford Loan, Federal Unsubsidized Stafford Loans, Federal Graduate PLUS Loans and Parent Loans for Undergraduate Students.
Unsubsidized: Interest accrues from the time of loan disbursement, and the borrower is responsible for paying the amount either while in-school or when the loan goes into repayment (as determined by the loan note).