University of Michigan - Flint

Academic Year

The period during which school is in session. UM-Flint has four separate enrollment periods and for financial aid purposes, the academic year begins with Fall and runs through Summer.

Accrued interest

The interest that accumulates on the unpaid balance of a loan.

Alternative Loans

Loans that are established by private lenders to supplement the student and parent education loan programs available from federal and state governments.

Annual percentage rate (APR)

The interest associated with a loan, which can change or remain the same during the year and term of the loan.

Asset

An asset is defined as property owned by the student or the family and has an exchange value. There are four types of assets: cash, savings and checking accounts; investments; businesses; and investment farms.

Award Notice

An award notice is an official email or letter sent to the student informing them of their financial aid package. Students will also receive and email notice whenever their packaged undergoes a revision.

Bankruptcy

When a person is declared bankrupt, he is found to be legally insolvent and his property is distributed among his creditors or otherwise administered to satisfy the interests of his creditors. Federal student loans, however, cannot normally be discharged through bankruptcy

Borrower

The person who is responsible for repaying a loan and who has signed and agreed to the terms in the promissory note.

Budget

See cost of attendance

Cancellation

Some loan programs provide for release of borrowers from their obligations to repay their loans. Borrowers must meet certain requirements to be eligible for cancellations such as death or permanent disability of the borrower. Some of the Federal student loan programs have additional cancellation provisions.

Capitalization

Adding unpaid accumulated interest to the loan principal.

Citizen/Eligible Non-Citizen

To receive financial aid, a student must be a U.S. Citizen, U.S. National, or an eligible non-citizen. Generally, a student is an eligible non-citizen if they are:

• A U.S. Permanent resident and have an Alien Registration Receipt Card (I-551);
• A conditional permanent resident (I-551C) or
• An other eligible non-citizen with an arrival departure record (I-94) from the U.S. Immigration and Naturalization Service showing any one of the following designations: “Refugee”, “Asylum Granted”, “Indefinite Parole”, “Humanitarian Parole” or “Cuban-Haitian Entrant”.

Students on only an F1 or F2 student visa, a J1 or J2 exchange visitor visa or a G services visa, are neither a citizen nor eligible non-citizen.

Collection Costs

Costs the lender or servicer incurs when collecting a delinquent or defaulted loan. These costs are charged to the borrower.

Consolidation

Form of refinancing and a way to simplify the repayment of federal loans. The process will move all individual federal loans with individual repayment amounts and create a new loan with one monthly payment.

Co-signer

A person who signs a credit agreement besides the borrower and is legally obligated to take responsibility for loan repayment if the borrower does not make payments.

Cost of Attendance

The cost of attendance (COA), also known as the budget, is an estimation of what it costs to go to school for a specific period of enrollment. The COA is calculated using an estimated cost of tuition & fees; room & board; books & supplies; personal/miscellaneous expenses; and transportation.

The COA is also based on: residency status for tuition purposes (in-state or out-of state); class level (undergraduate or graduate); housing preference (off-campus or living-at-home); and enrollment status (terms/sessions and full time, part time enrollment). The estimations are based upon averages for each category and are not reflective of actual or projected costs. Actual tuition & fees are published each year (generally after July 1) and are subject to Board of Regents approval. Additional tuition, fee, dependent care, study abroad or other educational expenses may be considered..

Default

Failure to repay a loan according to the terms and agreements. Defaulting on a loan may result in legal action to recover the money, including garnishing wages and withholding income tax refunds. Defaulting on a government loan will make you ineligible for future federal financial aid, unless a satisfactory repayment is arranged. Defaulting adversely affects your credit rating.

Deferment

Deferment occurs when a borrower is allowed to temporarily postpone repaying the loan. If you have a subsidized loan, the federal government pays the interest charges during the deferment period. If you have an unsubsidized loan, you are responsible for the interest that accrues during the deferment period. You can still postpone paying the interest charges by capitalizing the interest, which increases the size of the loan. Most federal loan programs allow students to defer their loans while they are in school at least half-time. If you don't qualify for a deferment, you may be able to get forbearance. You can't get a deferment if your loan is in default.

Dependency Status

An independent student is one who is at least 24 years old as of January 1 of the upcoming academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or were a ward of the court until age 18). All other students are considered dependent.

If you are unable to obtain parental information due to untenable or unusual circumstances, contact a financial aid officer. You do not qualify for independent status if your parents have decided to not claim you as an exemption on their tax returns or are refusing to provide support for your college education.

Delinquency

When payments from a loan are late or missed, as specified in the terms of the promissory note and the selected repayment plan.

Direct Loan Servicing Center

The U. S. Department of Education’s agent contracted to collect Direct Loan payments and handled deferments, repayment options and consolidation.

Disbursement

Disbursement is the release of financial aid towards school account for payment of tuition, fees, and other school charges.

Discharge

Loans that have been canceled because of bankruptcy, total and permanent disability, death of borrower or school closure. (See cancellation)

Disclosure Statement

The disclosure statement is sent by the lender 30 calendar days before the first anticipated disbursement and provides the borrower with information about their loan types, anticipated loan disbursement amounts, loan fee rate, amount of loan fee, anticipated disbursement dates, and anticipated net disbursements.

>Eligible Non-Citizen

Someone who is not a US citizen but is nevertheless eligible for Federal student aid. Eligible non-citizens include US permanent residents who are holders of valid green cards, US nationals, holders of form I-94 who have been granted refugee or asylum status, and certain other non-citizens. Non-citizens who hold a student visa or an exchange visitor visa are not eligible for Federal student aid

Enrollment Status

An indication of whether a student is full-time, ¾ time, ½ time, or less-than-half-time.

Entrance Counseling

A session during which new borrowers who are borrowing federal loans for the first time receive important information about their rights and responsibilities as a loan borrower.

Exit Counseling

A session during which borrowers who are leaving school or dropping below half time enrollment receive important information about their repayment obligations and update information about themselves.

Expected Family Contribution

The Expected Family Contribution (EFC) is the amount of money that the family is expected to be able to contribute to the student's education, as determined by the Federal Methodology need analysis formula approved by Congress.

Federal Methodology

The Federal Methodology (FM) is the need analysis formula used to determine the EFC. The Federal Methodology takes family size, the number of family members in college, taxable and nontaxable income, and assets into account.

Federal Processor

The Federal Processor is the U.S. Department of Education’s agent that processes the information submitted on the Free Application for Federal Student Aid (FAFSA) to compute eligibility for federal student aid.

Financial Aid

Money provided to the student and the family to help them pay for the student's education. Major forms of financial aid include gift aid (grants and scholarships) and self help aid (loans and work study).

Financial Aid Officer

A Financial Aid Officer is a University of Michigan - Flint professional employee who assists students and families in finding options to fund your college education.

Financial Aid Package

The financial aid package is the complete collection of grants, scholarships, loans, and work-study employment from all sources (federal, state, institutional, and private) offered to a student to enable them to attend the college or university.

First-Time Borrower

A first-time borrower is a student at UM-Flint who has not borrowed a federal loan. First time borrowers are required to complete entrance counseling and sign a master promissory note.

Fixed Interest Rate

A rate that remains the same from the day of the loan to the last repayment.

Forbearance

An arrangement to postpone or reduce a borrower’s monthly payment amount for a limited and specified period or to extend the repayment period. Borrowers are charged interest during forbearance and must continue paying the interest charges during the forbearance period. Forbearance is granted at the lender's discretion, usually in cases of extreme financial hardship or other unusual circumstances when the borrower does not qualify for a deferment. Borrowers can't receive forbearance if their loan is in default.

Free Application for Federal Student Aid (FAFSA)

The Free Application for Federal Student Aid (FAFSA) is used to apply for all federal aid including the Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (SEOG), Federal College Work Study (FCWS), Federal Direct Student Loans (FDS/FDU), Federal Direct Parent Loan (PLUS) and all other need-based aid.

Students need to re-apply each year they want to be considered for aid.

Gift Aid

Gift aid is financial aid, such as grants and scholarships, which does not need to be repaid.

Grace Period

The grace period is a short time period after graduation during which the borrower is not required to begin repaying his or her student loans. The grace period starts the day after a borrower ceases to be enrolled at least half time. Depending on the type of loan, students will have a grace period of six months (Direct Loans) or nine months (Perkins Loans) before they must start making payments on their student loans. The PLUS Loans do not have a grace period. During the grace period for Federal Direct Unsubsidized loans, interest must be paid or it will be capitalized.

Graduate PLUS Loan

A federally financed loan made to graduate students who will be enrolled in college who meet specific eligibility requirements. Students may borrow up to the cost of attendance minus any other financial aid received. A credit check will occur to determine if the student is eligible to borrow funds. The federal government charges interest from the date of the first disbursement is made until the loan is paid in full. Payments of principal and interest begin 60 days after the initial disbursement.

Graduate Student

A student who is enrolled to receive a masters, specialist or doctoral degree.

Grant

Type of gift aid that does not need to be repaid.

Gross Income

This is income before taxes, deductions, and allowances have been subtracted.

Income

Income is the amount of money received from employment (salary, wages, tips), profit from financial instruments (interest, dividends, capital gains), or other sources (welfare, disability, child support, Social Security, and pensions).

Interest

Interest is an amount charged to the borrower for the privilege of using the lender's money. Interest is calculated as a percentage of the principal balance of the loan.

Legal Dependent
(other than children or spouse)

Student must provide more than half of their support and they must live with you for the upcoming or current academic year.

Lender

A lender is a bank, credit union, savings & loan association, government or other financial institution that provides funds to the student or parent for an educational loan.

Loan Fee

An expense of borrowing deducted from each loan disbursement.

Loan Forgiveness

(See cancellation)

Merit-Based

Financial aid that is merit-based depends academic, artistic, or athletic merit, or some other criteria, and does not depend on the existence of financial need. Merit-based awards use grades, test scores, hobbies, and special talents to determine eligibility for scholarships.

Michigan Resident

An in-state student has met the legal residency requirements for the state, and is eligible for Michigan residency in-state student tuition at UM-Flint.

Need

The difference between the COA and the EFC is the student's financial need - the gap between the cost of attending the school and the student's resources. The financial aid package is based on the amount of financial need. The process of determining a student's need is known as need analysis.

Need-Based

Financial aid that is need-based depends on your financial situation. Some forms of need based federal aid are: Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (SEOG), Federal College Work Study (FWS), and Federal Direct Subsidized Student Loans.

Non-Michigan Resident

An out-of-state student has not met the legal residency requirements for the state, and is charged as a non-Michigan resident tuition rate.

Non-Need-Based

Financial aid that is non need-based does not depend on your financial situation. Non-need-based aid eligibility is based on the difference between the cost of attendance and the resources awarded. Some forms of non-need-based federal aid are: Federal Direct Unsubsidized Student Loan, and the Federal Direct Parent Loan (PLUS).

Net Income

This is income after taxes, deductions, and allowances have been subtracted.

Origination Fee

The origination fee is paid to the bank to compensate them for the cost of administering the loan. The origination fees are charged as the loan is disbursed. A portion of this fee is paid to federal government to offset the administrative costs of the loan.

Outside Resource

An outside resource is aid received that is not based on submitting a FAFSA such as private donor scholarships, prepaid tuition plans, graduate assistantships, and VA educational benefits.

Overawards

When a student receives more financial aid than their eligibility based on their gross need, cost of attendance or the individual program award requirements.

Overpayment

An overpayment is created whenever a student received federal aid that exceeded his or her eligibility based on a student error, failure to report information, or an obligation to return funds. A student is not eligible for additional funds until the debt is repaid in full or satisfactory repayment arrangement is made.

Packaging

Packaging is the process of assembling financial aid funds to assist in covering a student’s cost of attendance.

Parent Contribution

The Parent Contribution (PC) is an estimate of the portion of educational expenses that the federal methodology calculation determines your parents can contribute. It is based on their income, the number of parents earning income, assets, family size, the number of family members currently attending a university, and other relevant factors. Students who qualify as independent are not expected to have a parent contribution.

Parent Loan (PLUS)

A federally financed parent loan made to parents of students who will be enrolled in college who meet specific eligibility requirements. Parents may borrow up to the cost of attendance minus any other financial aid received. A credit check will occur to determine if the parent is eligible to borrow funds. The federal government charges interest from the date of the first disbursement is made until the loan is paid in full. Payments of principal and interest begin 60 days after the initial disbursement.

Pell Grant

Federal grant program for undergraduate students who demonstrate financial need and have not yet completed a baccalaureate degree.

Perkins Loan

The Federal Perkins Loan is a low-interest (5%) loan for students with financial need. The school is your lender and the loan is made with federal government funds. You must repay the loan to your school.

Principal

The principal is the amount of money borrowed or remaining unpaid amount on a loan.

Prepayment

Any amount paid on a loan by the borrower before it is required to be paid under the terms of the promissory note. There is never a penalty for prepaying principal or interest on federal loans.

Private Loans

(see Alternative Loans)

Promissory Note

The promissory note is a legal binding contract between the borrower and the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy, and cancellations. The borrower should keep this document until the loan has been repaid.

Re-evaluation

Re-evaluation is a formal request to have a financial aid officer review your aid eligibility and possibly use professional judgment to adjust the figures. For example, if you believe the financial information on your financial aid application does not reflect your family's current ability to pay (e.g., because of death of a parent, unemployment, or other unusual circumstances), you should definitely make an appeal. The financial aid officer may require documentation of the special circumstances or of other information listed on your financial aid application.

Repayment Schedule

The statement provided by the lender indicating the amount borrowed, the amount of monthly payments and the date payments are due.

Satisfactory Academic Progress

You must be making Satisfactory Academic Progress (SAP) in order to continue receiving federal aid. If a student fails to maintain standing consistent with the school's SAP policy it will result in the loss of aid eligibility. SAP monitors overall attempted and completed rate of all coursework as well as 150% maximum time to complete a degree.

Selective Service

Selective Service is registration for the military draft. Male students who are US citizens and have reached the age of 18 must be registered with Selective Service to be eligible for federal financial aid.

Servicer

A servicer is an organization that collects payments on a loan and performs other administrative tasks associated with maintaining a loan portfolio. Loan servicers disburse loans funds, monitor loans while the borrowers are in school, collect payments, process deferments and forbearances, respond to borrower inquiries, and ensure that the loans are administered in compliance with federal regulations and guarantee agency requirements.

Student Aid Report

The Student Aid Report (SAR) summarizes the information included in the FAFSA. The SAR will also indicate the amount of Pell Grant eligibility, if any, and the Expected Family Contribution (EFC).

Student Contribution

The Student Contribution (SC) is the amount of money the Federal Methodology calculation determines the student can contribute; the SC depends on the student’s income, assets, and other factors.

Subsidized loan

A loan for which the federal government pays the interest while the student is in school, and during grace and deferment periods.

Supplemental Educational Opportunity Grant (SEOG)

The Supplemental Educational Opportunity Grant (SEOG) is a federal grant program that does not have to be repaid. The SEOG is awarded to undergraduate students with exceptional need and priority is given to students who received Federal Pell Grant.

Unmet Need

The difference between a student’s EFC and the cost of education. Due to funding constraints the office may provide the student with less than the student's need. This gap is known as the unmet need.

Unsubsidized loan

A loan for which the student is responsible for paying all interest at all times. Interest accrues on the loan from the date of first disbursement until the loan is paid in full. To avoid capitalization of the interest, the interest can be paid before the loan repayment is scheduled to begin.

Untaxed Income

Contributions to IRAs, Keoghs, tax-sheltered annuities, and 401k plans, as well as worker's compensation and welfare benefits.

Variable Interest

Rate of interest on a federal direct loan that is tied to a stated index and changes annually, every July 1, as the index changes.

Verification

Verification is a review process in which the financial aid office determines the accuracy of the information provided on the student's FAFSA. During the verification process the student and parent will be required to submit documentation for the amounts listed (or not listed) on the financial aid application. Such documentation may include signed copies of the most recent Federal income tax returns for you, your spouse (if any) and your parents, copies of Social Security benefit statements and W2 and 1099 forms, among other things.

If any discrepancies are uncovered during verification, the financial aid office may require additional information to clear up the discrepancies. Such discrepancies may cause your final financial aid package to change.

If the documentation is not submitted, the financial aid package will be cancelled and no aid awarded.

Veteran

For Federal financial aid purposes such as determining dependency status, a veteran is a former member of the US Armed Forces (Army, Navy, Air Force, Marines, or Coast Guard) who served on active duty and was discharged other than dishonorably (i.e., received an honorable or medical discharge). You are a veteran even if you serve just one day on active duty - not active duty for training - before receiving your DD-214 and formal discharge papers.

A person who was discharged other than dishonorably from one of the military service academies (the U.S. Military Academy at West Point, the Naval Academy at Annapolis, the Air Force Academy at Colorado Springs, or the Coast Guard Academy at New London) is considered a veteran for financial aid purposes. Cadets and midshipmen who are still enrolled in one of the military service academies, however, are not considered veterans. ROTC students, members of the National Guard, and most reservists are not considered veterans.

W2 Form

Employers are required by the IRS to issue a W2 (Wage and Tax statement) for each employee. The W2 form lists the employee's wages and tax withheld

Ward of the Court

A ward of the court is someone who is currently or was until age 18 under the protection of the courts. Often a minor becomes a ward of the court when the court determines the child was subject to abuse or neglect. If the court appoints a legal guardian, the parental legal rights have been severed and then they are considered to be a ward of the court. Neither emancipation nor incarceration is considered as wards of the court.

Work Study

A program that provides undergraduate and graduate students with part-time employment during the school year. The federal or state government pays a portion of the student's salary. Eligibility for work study is based on need. Money earned from a work study job is not counted as income for the subsequent year's FAFSA process.