Common Terms Used With Student Loan Issues
- Borrower: Individual who applies for and receives money from a lender
- Lender: Bank, agency, or school that loans money to a borrower
- Default: When the borrower fails to pay the loan as promised to the lender
- Servicer: Whoever is currently receiving the borrower’s loan payments
- Origination Date: The date on which the borrower gets the money
- Delinquency: When a borrower does not make a loan payment when payment is due
Types of Loans
Direct Loan Program (Stafford Loans)
Subsidized loans are given to students with financial need. The U.S. Department of Education pays the interest on the loan while you are in school at least half-time, for the first six months after you leave school, and during a deferment period (see below for deferment information)
Unsubsidized loans are available to students regardless of financial need. If you borrow an unsubsidized loan, you are responsible for paying all the interest. The loan will generate interest while you are still in school. If you do not pay the interest, it will be capitalized, which means that when your loan becomes due, the interest will be added to the amount of your loan.
PLUS loans are available to parents of dependent undergraduate students and to graduate or professional students. PLUS loans require that the student or parent have financial need and have no adverse credit history.
Perkins Loan Program
The Perkins Loan Program provides money for students with exceptional financial need. This program is offered only to students whose schools participate. If you are not sure if your school participates, check with your financial aid office.
Old Federal Loan Programs
You may have a loan that is not listed here. The Federal Government has ended certain loan programs and/or transferred older programs into one of the above programs. For example, Federal Family Education Loans, or “FFELs” are no longer available. If you have an FFEL, note that these loans have the same loan limits and deferment and cancellation provisions as Direct Loans. Perkins Loans used to be called National Direct Student Loans or National Defense Student Loans.
Private loans are not part of the Federal Student Aid program and have their own conditions set by the private lender. These loans typically have harsher conditions and fewer options for fair repayment.
What kind of loan(s) do I have?
If you have the PIN number you used to fill out your FAFSA, log on to www.nslds.ed.gov. FAFSA is the Free Application for Federal Student Aid. This is used by the U.S. Department of Education to calculate your Expected Family Contribution (ECF). Colleges and universities look at the FAFSA application to determine if you’re eligible for financial aid. Near the bottom of the page, click on ‘financial aid review.’ You will be asked to enter your social security number, your birth date, the first two letters of your last name, and your PIN number.
If you do not know your PIN number, you can:
Apply for a PIN. If you have never had a PIN before, go to www.pin.ed.gov and select ‘Apply for a PIN.’ You will need to provide your name, social security number, birth date, address, and a security question of your choice. It will take several days to receive a PIN.
Find your PIN. If you can’t remember your PIN, go to www.pin.ed.gov and select ‘Request a Duplicate PIN’ from the left side of the page. You will be asked for your social security number, the first two letters of your last name, and your date of birth. Then you will be asked for the answer to the security question you selected when you first got your PIN.
If you cannot remember the answer to your security question, you can enter the wrong answer three times, which will disable your PIN. Then you can apply for a new PIN.