Glossary

54 plain-English definitions. Federal plan names and caps match dated rule files checked on November 12, 2026.

• Adjusted Gross Income (AGI)

  AGI is income from your federal tax return after certain adjustments. Federal repayment plans such as RAP use prior-year

• Administrative forbearance

  Administrative forbearance is a temporary federal pause or adjustment granted by the Department of Education or your ser

• Aggregate loan limit

  The aggregate limit is the total federal student loan amount you may borrow over your academic career in a given categor

• Annual loan limit

  The annual limit is the maximum federal student loan amount you can borrow in a single academic year. It depends on grad

• APR (Annual Percentage Rate)

  APR is the yearly cost of borrowing expressed as a percentage. For student loans it usually includes interest and certai

• Autopay

  Autopay is automatic monthly payment withdrawal from a bank account. Federal borrowers enrolled in auto pay starting Jul

• Capitalization

  Capitalization adds unpaid interest to your principal balance. After that, interest accrues on the larger balance. On fe

• Cosigner release

  Cosigner release is a private lender policy that may remove a cosigner from a student loan after the borrower meets cond

• Cost of Attendance (COA)

  Cost of attendance is your school's estimated total price for one academic period, including tuition, fees, room, board,

• Credit score

  A credit score is a number lenders use to predict repayment risk. Private student loan approval and pricing depend heavi

• Default

  Default is failure to repay a student loan according to the promissory note. For federal loans, default usually follows

• Deferment

  Deferment temporarily postpones federal student loan payments. On subsidized loans, the government may pay interest duri

• Delinquency

  Delinquency means a payment was due and not received by the due date. Federal loans become delinquent the day after a mi

• Direct Loan

  Direct Loans are federal student loans made by the U.S. Department of Education. Types include Direct Subsidized, Direct

• Direct Subsidized Loan

  A Direct Subsidized Loan is federal debt for eligible undergraduate students with financial need. The government pays in

• Direct Unsubsidized Loan

  A Direct Unsubsidized Loan is federal student debt for eligible students regardless of financial need. Interest accrues

• Discretionary income

  For federal income-driven plans such as IBR, discretionary income is usually your AGI minus 150 percent of the federal p

• Economic hardship deferment

  Economic hardship deferment may postpone federal payments for borrowers who meet eligibility tests such as receiving cer

• Employer Certification Form (PSLF)

  The PSLF Employer Certification Form documents that your employer qualifies for Public Service Loan Forgiveness and that

• Extended Repayment

  Extended Repayment stretches federal payments up to 25 years for eligible borrowers with higher balances. Payments may b

• FAFSA

  The Free Application for Federal Student Aid (FAFSA) is the form students and families submit to apply for federal grant

• Federal benefits warning

  The federal benefits warning is a disclosure that refinancing federal student loans into private loans removes access to

• Federal loan consolidation

  Federal consolidation combines eligible federal loans into one Direct Consolidation Loan with a weighted average interes

• FFEL Program loan

  Federal Family Education Loan (FFEL) loans were made by private lenders and guaranteed by the government. The FFEL progr

• Fixed interest rate

  A fixed rate stays the same for the life of the loan unless you consolidate or refinance into a new loan with a new rate

• Forbearance

  Forbearance temporarily reduces or pauses federal student loan payments. Interest usually continues to accrue on most lo

• Grace period

  The grace period is time after leaving school or dropping below half-time enrollment before federal student loan repayme

• Grad PLUS

  Grad PLUS was a federal Direct PLUS Loan for graduate and professional students. Starting July 1, 2026, new Grad PLUS is

• Graduated Repayment

  Graduated Repayment is a federal plan with payments that start lower and increase, typically every two years, over a 10-

• Half-time enrollment

  Half-time enrollment is the credit load your school defines as at least half of a full-time program. It affects in-schoo

• IDR recertification

  Income-driven borrowers must recertify income and family size each year, usually with tax data or alternative documentat

• In-school deferment

  In-school deferment pauses federal student loan payments while you are enrolled at least half time in an eligible progra

• Income-Based Repayment (IBR)

  IBR sets federal payments at 10 or 15 percent of discretionary income, depending on when you borrowed, never more than t

• Income-Contingent Repayment (ICR)

  ICR is the oldest federal income-driven plan. Payments are the lesser of 20 percent of discretionary income or a fixed p

• Income-Driven Repayment (IDR)

  Income-driven repayment plans set federal student loan payments from income and family size, then forgive any remaining

• Interest subsidy

  An interest subsidy means someone other than the borrower pays accruing interest for a period. Direct Subsidized Loans r

• Loan discharge

  Loan discharge cancels a borrower obligation for specific reasons such as total and permanent disability, death, closed

• Loan servicer

  A loan servicer is the company that bills you, processes payments, and helps with repayment plans for federal or private

• Master Promissory Note (MPN)

  The Master Promissory Note is the legal contract you sign to borrow federal student loans. It lists terms such as intere

• New borrower

  A new borrower is a federal student loan term used in plan eligibility rules. For IBR and PAYE, it generally means someo

• Origination fee

  An origination fee is money withheld when a loan is disbursed to cover the cost of issuing the loan. Federal Direct Loan

• Parent PLUS

  Parent PLUS is a federal Direct PLUS Loan taken by a parent for a dependent undergraduate. Credit check applies. Unless

• Pay As You Earn (PAYE)

  PAYE is a federal income-driven plan for eligible Direct Loan borrowers who meet new borrower rules. Payments are 10 per

• PLUS credit check

  Direct PLUS Loans require a federal credit check. Adverse credit history may require an endorser or documented extenuati

• Principal match (RAP)

  On the Repayment Assistance Plan, if your required payment does not reduce principal by at least 50 dollars in a month,

• Private refinance

  Private refinance replaces existing student loans with a new private loan, often to change rate or lender. Refinancing f

• Public Service Loan Forgiveness (PSLF)

  PSLF forgives remaining federal Direct Loan balance after 120 qualifying monthly payments while working full time for a

• Qualifying payment (PSLF)

  A qualifying payment for Public Service Loan Forgiveness is a full, on-time payment made on an eligible federal Direct L

• Repayment Assistance Plan (RAP)

  RAP is a federal income-driven plan that uses a sliding percentage of prior-year adjusted gross income (AGI), with a mon

• SAVE Plan

  The Saving on a Valuable Education (SAVE) Plan was a federal income-driven repayment plan. A court order ended SAVE in M

• Standard Repayment

  Standard Repayment is the default federal plan with fixed payments over 10 years for most Direct Loans. It usually pays

• Taxability of forgiveness

  Forgiven student loan debt may have tax consequences. Federal Student Aid states that income-driven discharge on or afte

• Tiered Standard Plan

  The Tiered Standard Plan is a fixed-payment federal plan tied to total Direct Loan principal. Terms run from 10 to 25 ye

• Variable interest rate

  A variable rate can change over time, usually tied to a market index plus a margin. Payments and total cost can rise or