Student Loans Glossary


Award Letter	A letter that is sent from the Office of Student Financial Aid which details the University's analysis of your financial need and lists all of the financial aid which has been awarded to you.
Campus-based Student Loans	Loans repayable directly to the University of Washington such as: Perkins Health Profession Nursing Institutional Long- and Short-term loans

Cancellation	Cancels a certain percentage of the principal loan amount for borrowers who meet specific eligibility requirements.

Capitalization of Interest	Adds unpaid interest onto the principal balance of a loan.

Consolidation Loan	Allows you to combine several federal student loans into one. This generally lowers monthly payments and simplifies and extends the terms of repayment.

Default	Failure to repay a loan according to the agreed terms, for six months. If you default on a loan, the federal government can take action to obtain the funds by garnishing your wages, litigation, credit bureau notification and withholding of income tax refunds. In addition, defaulting on a loan will affect your ability to receive Title IV student aid in the future.

Deferment	Official postponement of loan payment while you are engaged in an eligible activity or if you are experiencing a period of economic hardship.


Delinquency	Occurs when loan payments are not paid according to the terms of the promissory note. Late fees are often assessed on delinquent accounts. Serious delinquency may result in default.

Disclosure Statement	Document which includes: total loan amount borrowed interest rate amount of payments and how often they are due any fees that will be assessed if a late payment is made or any collection action becomes necessary explanation of prepayment


Forbearance	Postponement of payments for six months to one year due to economic hardship. A forbearance period may be renewed annually for up to three years. Interest accrues regardless of whether the loan is subsidized or unsubsidized and is added to the loan balance at the end of the forbearance period.

Grace Period	Period of time, beginning one day after your separation date, during which no payments are due and no interest is accrued.

Hold	A hold will stop you from either registering or getting a copy of your transcript or both. A Registration or Transcript Hold is placed on your student record if you have an outstanding financial obligation to the University of Washington.


Origination Fee	Amount charged for borrowing money. This fee is a percentage of the amount borrowed.

Personal Data Sheet	Form containing your contact information which can be used in the future, if necessary, while your loan is in repayment.

Promissory Note	A promissory note is the binding legal document that you sign when you get a student loan. It lists the conditions under which you are borrowing and the terms under which you agree to repay the loan. It will include information about the interest rate and about deferment and cancellation provisions. It is very important to read and save this document because you will need to refer to it when you begin repaying your loan(s).

Separation Date	Perkins and Institutional Loans: the last date of at least half-time enrollment. Health Profession and Nursing Loans: the first day of the month nearest the date you cease to be a full-time student pursuing and eligible course of study.


Servicer	Organization that monitors and collects a loan on behalf of the holder. The servicer maintains the borrower's account records and collects the loan according to the guidelines set by the Federal Government. The lender may also service its own loans.

Statement of Rights and Responsibilities	Form to be signed, confirming that you understand your rights and responsibilities in regards to the repayment of your student loan.

Title IV	A section of the Higher Education Act of 1965, as amended, that authorizes federal loan, work study and grant assistance programs for students pursuing post-secondary education.

Finances Student Loans