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Accrued Interest:
The amount of interest, calculated daily, that has accumulated on the unpaid amount of your loan.

Adjusted Gross Income:
Taxable income from all sources (see your Federal Income Tax Form 1040 EZ, line 3, or Form 1040, line 31).

The reduction of loan balance by your monthly payments.

Items of financial worth which may include your home, business, savings and checking accounts, stock, bonds, real estate, trust funds, etc.

The person to whom a loan is made and who agrees to repay it. The borrower signs a promissory note, which serves as the formal promise to repay the loan.

A process of adding unpaid interest to the principal balance of your loan. This will increase the loan amount balance due and may increase monthly payments.

A signer of a promissory note who agrees to pay the loan if the borrower defaults.

Cost of Attendance (COA):
The total amount a student must pay to attend school for one academic year, including tuition, room and board, books, supplies, transportation, and personal expenses. A college’s Financial Aid Office determines this figure.

Failure to pay your loan according to the terms disclosed in your promissory note. You are in default if your payments are past due or if you fail to comply with the other terms of the loan.

A period of time during repayment in which the borrower, after meeting certain criteria, is not required to make their regular monthly payments. Note: interest payments may or may not be postponed depending on the type of loan.

If a payment is not received by the due date, it is considered delinquent. Delinquencies greater than 30 days are generally reported to national credit bureaus.

Disbursement Notification:
A letter that is sent to you acknowledging that your loan is approved and letting you know when the money will be sent to your school, as well as the loan amount and any fees (origination). This marks the successful completion of the loan application process.

Disclosure Statement:
A notification of the actual cost and terms of a loan, which includes the interest rate and any additional finance charges.

EFT (Electronic Funds Transfer):
The process whereby a lender sends the loan proceeds electronically to the school.

Eligible Citizen:
A United States citizen, U.S. national, or resident of certain U.S. territories who qualify to borrow under the Federal Direct student lending program.

Eligible Non-Citizen:
A permanent resident of the United States who is able to present evidence from the Immigration and Naturalization Service that he or she is in the U.S. for other than a temporary purpose with the intention of becoming a citizen or permanent resident.

Expected Family Contribution (EFC):
This amount is determined via the FAFSA process by a need analysis formula established by the federal government and can be found on your Student Aid Report (SAR).

The Free Application for Federal Student Aid (FAFSA) is a standard federal form used to determine your eligibility for most types of federal financial aid. The FAFSA is typically completed early in the year and it requires income, asset, and tax information from the students.

Financial Aid:
The total amount of monetary assistance available to the student including all scholarships and loans available from school, state and federal programs, as listed in a college’s financial aid award notice. Typically, a Stern financial aid package will include a combination of scholarships (where applicable), federal loans and private student loans (private loans are available to domestic and international students), never exceeding the cost of attendance.

A temporary postponement of principal and interest payments during which the borrower may only pay the interest on the loan. If the borrower chooses not to pay the interest, it will be capitalized at the end of the period.

Good thru Date for Payoff:
The date your payoff amount should arrive at the lender or servicing agent.

Grace Period:
An amount of time allowed before principal repayment of a loan must begin after a student graduates, leaves school or drops below half-time status. No payments on your student loans are required during this time. Details of your grace period are specified in your promissory note and are not available for all loans.

Gross Income:
Your income before taxes and deductions.

A loan expense charged for the use of borrowed money. Interest may be fixed (set rate for the lifetime of the loan), or variable (changes periodically). 

Late Fee:
An administrative charge that a lender may assess if a student loan payment is not received within 15 days after its due date.

Lifetime Learning Tax Credit:
The Lifetime Learning Tax Credit may be available to eligible students enrolled in undergraduate studies, graduate students, or working U.S. citizens taking classes to improve or upgrade their job skills. More information can be found at

A sum of money borrowed (principal) usually for a specific reason (e.g., to obtain an education, buy a car, etc.). The entity lending the money (e.g. a bank) usually charges interest for use of the money. The amount of money borrowed is typically repaid with interest over a period of time.

Master Promissory Note (MPN):
A Master Promissory Note is a legally binding agreement the borrower signs, in which the borrower promises to pay the loan with interest in periodic installments. Under a MPN the borrower may receive loans for either a single period or multiple periods of enrollment. If used as a multi-year note, most borrowers will sign the MPN once and the note remains valid for a 10 year period.

Multiple Disbursements:
Loan proceeds that are paid in more than one check or electronic transaction. For example, a portion of a loan may go towards the first semester of school and the balance for the second semester.

Origination Fee:
A sum charged by the Federal Government on federal loans to offset the cost of processing the loan. The amount of the fee is deducted from the dollar amount of your loan by the lender and paid to the U.S. Department of Education.

Payment Schedule:
A summary of the terms of a loan, which includes the total principal amount, the date payment begins and the interest rate.

Payoff Balance:
This is the total amount you would owe if you were to pay off your entire loan. It includes the outstanding principal plus any unpaid accrued interest.

The dollar amount of the loan that must be repaid upon maturity, and upon which interest will be charged.

Principal Balance:
The outstanding amount you owe, excluding accrued but unpaid interest.

Private Loans:
Loans that are made to you based on your credit worthiness as opposed to Federal Direct Unsubsidized Loans and grants which are determined through a need analysis process based mostly on the cost of education.

Promissory Note:
The binding document a borrower signs to obtain a loan. The note includes all the terms and conditions of the loan and the borrower’s promise to repay the loan with interest.

Repayment Period:
This is the amount of time during which you repay the money borrowed plus interest.

Scholarships are a form of financial aid that do not have to be repaid. These are available from many sources including community groups, schools and private corporations. Scholarships can be awarded based on a variety of criteria including scholastic achievement, professional experience, etc.

Indicates the condition of your student loan. Examples would include "in school" and "repayment."

Student Aid Report (SAR):
A report sent to a student by the government typically within 2-3 weeks after submitting a FAFSA. The report informs the student of the Expected Family Contribution (EFC). College financial aid offices use the report information to build a financial aid package for a student.

Student Loan Interest Deduction:
Eligible taxpayers may deduct on their federal income tax return the amount of interest they have paid during the tax year on any qualified education loan for the period of time as defined by law. More information can be found at

Title IV Code:
This is a federal school code and is to be included on your Free Application for Federal Student Aid (FAFSA). For New York University, the Title IV code is 002785. There is no separate code for Stern.

Unsubsidized Loan:
A loan on which the borrower is responsible for paying the interest while in-school and during deferment, forbearance and grace periods.

This is an IRS form which taxpayers use to certify that loans meet the definition of qualifying education debt and which allows lenders to report to the IRS the amount of interest paid on student loans as interest which qualifies for possible tax deductions.