Financial Aid

Important Student Loan Terms

Disbursement

Handing over the loan proceeds to the borrower. In federal programs the money for Federal PLUS loans will be sent to the university, but the student (or parent) must sign for it.

Origination Fee

A fee charged by the US Department of Education to offset the cost of the federal student loan program. The fee is usually deducted from the loan proceeds.

Default Fee

A "default insurance" fee charged for federally-backed student loans. It is usually deducted from the loan proceeds.

Consolidation

When multiple loans have been borrowed, sometimes the payments can be lessened when all of the loans are combined and one single payment can be made instead of multiple ones. This can reduce the amount of interest that has accrued on the loans. The Default Prevention Coordinator, Malik Gladden (magladden@nsu.edu ), can assist the student with the consolidation process.

Forbearance

A loan that is in forbearance continues to accrue interest although the payment may not be due.

Loan Period

The covered timeframe for the current loan application. If the covered time frame is an academic year, the loan period would be from the start of the year (August) until the end of the year (May). If the loan is for fall only, the loan period would be August - December. If the loan is for spring only, the loan period would be January - May. If the loan is for summer only, the loan period would be May - June.

Master Promissory Note

A legally binding contract between the borrower and the lender whereby the completing and signing of the Note, the borrower has agreed to the terms and conditions of the loan.

Deferment

A deferred loan does not accrue interest during the deferment period.

Notice of Loan Disclosure Statement

A document specifying the interest rate, when your loan will be disbursed, how much the net proceeds of the loan will be, and the amount of origination and guarantee fees that will be deducted from the gross amount of the loan.