Notes & Important Terms

Default: Failure to repay a loan according to the terms agreed to when you signed a promissory note.* In many cases, default may be avoided by submitting a request for a deferment or cancellation and by providing the required documentation prior to reaching the point in which you will considered in default. The consequences of default are
severe. For more information, see page 28.

Eligible Program: A course of study that leads to a degree or certificate and meets the U.S. Department of Education's requirements for an eligible program. To get federal financial aid, you must be enrolled in an eligible program, with two exceptions:

• If a school has told you that you must take certain coursework to qualify for admission into one of its eligible programs, you can get a Direct Loan or a FFEL for up to 12 consecutive months while you're completing that coursework. You must be enrolled at least half time,* and you must meet the usual student aid eligibility requirements.
• If you're enrolled at least half time* in a program to obtain a professional credential or certification required by a state for employment as an elementary or secondary school teacher, you can get a Federal Perkins Loan, Federal Work-Study, a Direct or FFEL Stafford loan (or your parents can get a PLUS Loan) while you're enrolled in that program.

Expected Family Contribution (EFC): The formula used to calculate your EFC is established by law and is used to measure your family's financial strength on the basis of your family's income and assets. The EFC is used to determine your eligibility for federal student aid.

Financial Aid Package: The total amount of financial aid
(federal and nonfederal) a student receives.

General Education Development (GED) Certificate: A certificate students receive if they've passed a specific, approved high school equivalency test. Students who don't have a high school diploma but who have a GED may still qualify for federal student aid. A school that admits students without a high school diploma must make a GED program in the vicinity of the school available to these students and
must inform them about the program. Students who pass an approved ability-to-benefit (ATB) test may also be qualified. An applicant without a high school diploma or its recognized equivalent can be eligible for funds if he or she

1) passes an independently administered ATB test approved by the Department of Education and used for determining the student's ability to benefit from postsecondary education or 2) enrolls in a school that participates in a process that has been both prescribed by the state in which the school is located and approved by the Department.

Guaranty Agency: The organization that administers the FFEL Program in your state. This agency is the best source of information on FFELs. To find out the name, address, and telephone number of the agency serving your state you can contact the Federal Student Aid Information Center at the address or phone number listed on page 12. A directory of guaranty agencies is available on the Department of
Education's Web site at www.ed.gov/Programs/bastmp/SGA.htm

Half time: At schools measuring progress in credit hours and semesters, trimesters, or quarters, half time enrollment is at least six semester hours or quarter hours per term. At schools measuring progress by credit hours but not using semesters, trimesters, or quarters, half time enrollment is at least 12 semester hours or 18 quarter hours per year. At schools measuring progress by clock hours, half time enrollment is at least 12 hours per week. Note that schools
may choose to set higher minimums than these. You must be attending school at least half time to be eligible to receive a Direct Loan or FFEL. Half time enrollment is not a requirement to receive aid from the Federal Pell Grant, FSEOG, Federal Work-Study, or
Federal Perkins Loan programs.

Promissory Note: The binding legal document you sign when you get a student loan. It lists the conditions under which you're borrowing and the terms under which you agree to pay back the loan. It will include information on how interest is calculated and about deferment and cancellation provisions. It's very important to read and save this document because you'll need to refer to it later when you begin repaying your loan.

Regular Student: One who is enrolled in an institution to obtain a degree or certificate. Generally, to receive aid from the programs discussed in this booklet, you must be a regular student. (For some programs, there are exceptions to this requirement. See the definition of eligible program.)

Satisfactory Academic Progress: To be eligible to receive federal student aid, you must maintain satisfactory academic progress toward a degree or certificate. You must meet your school's written standard of satisfactory progress. Check with your school to find out about its standard.

Selective Service Registration: If required by law, you must register, or arrange to register, with the Selective Service to receive federal student aid. The requirement to register applies to males who were born on or after January 1, 1960, are at least 18 years old, and are not currently on active duty in the U.S. Armed Forces. (Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau are exempt from registering.)


Go on to Responsibilities Page 31 - Borrower Responsibilities Page 32 - Tracking Your Loan Page 33 - Notes Page 34