Glossary of Terms


The interest that accumulates on the unpaid principal balance of a loan.

Anticipated Completion (Graduation) Date

The date on which the student is expected to complete an academic program. This date is provided by a school official on the borrower's loan application and in subsequent enrollment status updates.

Automatic Payment
Student loan payments paid automatically to the lender or servicer by electronic transfer from a checking or savings account.
Capitalized Interest
The accrued interest added to the borrower's outstanding principal. Subsequent interest accrues on the new total principal balance, which includes any capitalized interest.

Borrowers may obtain a federal consolidation loan to combine several types of federal student loans with varying repayment terms into a single, new loan even if current student loans are held by more than one lender.

The failure of the borrower (or endorser, if any) to make payments when due or to meet other terms of the Promissory Note. By law, default occurs at day 270 of delinquency for Federal Stafford, PLUS, SLS, and consolidation loans.

A period of time during repayment in which the federal student loan borrower, upon meeting certain conditions, is not required to make loan payments. For subsidized loans, the federal government pays the interest during a deferment.
For others, the interest accrues and is capitalized and the borrower is responsible for paying it.


A period that begins on the day after the due date of a payment when the borrower fails to make the equivalent of one full payment.
Electronic Funds Transfer (EFT)

The electronic transfer of Federal Stafford or PLUS loan proceeds from the lender to an account at the school or the school's financial institution.

Federal Direct Loan Program (FDLP or Direct Lending)
The Federal Direct Loan Program offers Direct Stafford (subsidized and unsubsidized), PLUS (Parent and Graduate/Professional), and consolidation loans. The funding comes directly from the U.S. Treasury rather than from private lending institutions.

Federal Family Education Loan Program(FFELP)

The Federal Family Education Loan Program offers Stafford (subsidized and unsubsidized), PLUS (Parent and Graduate/Professional), and consolidation loans. This loan program was funded by lenders, guaranteed by guarantors and reinsured by the federal government. As of July 1, 2010 no new loans can be processed through FFELP; rather, all federal student loans are processed through the Direct Lending program.

Federal Privacy Act Waiver

Written authorization from the borrower giving someone other than the borrower legal permission to obtain information on the loan.


A period of time during which the borrower is permitted to temporarily cease making  payments or reduce the amount of the payments. Forbearances are not automatically granted and are allowed solely on the lender's discretion.
Grace Period

The period that begins the day after a Federal Stafford loan borrower ceases to be enrolled at least half time at an eligible school, ends the day before the repayment period begins, and during which payments of principal are not required.
Graduated Repayment Schedule
A repayment schedule under which the amount of the borrower's installment payment is scheduled to change during the course of the repayment period.

Guarantor (or Guarantee Agency)
A guarantor is a person, company, or entity who agrees to assume responsibility for a debt in the event that the party actually responsible for that debt fails to pay it.

Income-Contingent Repayment Schedule
A repayment schedule for some FDLP loans under which the borrower's monthly payment amount is adjusted annually, based on the total amount of the borrower's direct loans, the borrower's family size, and the adjusted gross income reported on the borrower's most recent income tax return.

Income-Sensitive Repament Schedule
A repayment schedule for some FFELP loans under which the borrower's monthly payment amount is adjusted annually, based solely on the borrower's expected total monthly gross income received from employment and other sources during the course of the repayment period.

The charge made to a borrower for use of a lender's money.
Late Charges (fees)
A fee charged when a payment is not received on time. Some common bills which almost always have a late fee policy are student loan payments, credit card payments, mortgage/rent payments, and car loan payments.

A bank, credit union, or other financial institution from which a borrower obtains a private loan. In the case of the Federal Direct Lending Program, the federal government is the lender of Title IV loans.
Loan Term
The period of time for which a loan application is certified.
Master Promissory Note (MPN) A contract between a borrower and lender that legally obligates the borrower to repay a loan. It also includes loan details, including lender information, terms and conditions.
Principal Balance

The outstanding amount of the loan, on which the lender charges interest. As the loan is repaid, a portion of each payment is used to satisfy interest that has accrued, and the remainder of the payment is used to reduce the outstanding principal balance.

Promissory Note

A legally-binding agreement the borrower signs to obtain a loan, in which the borrower promises to repay the loan, with interest, in periodic installments.

Rehabilitation (of a defaulted loan)
A process by which a borrower may bring a federal loan out of default by adhering to specified repayment requirements.

Reinstatement (of borrower Title IV eligibility)
A process by which a borrower with a defaulted federal loan may regain eligibility for Title IV aid by adhering to strict repayment requirements.

Repayment Period
The period during which interest accrues on the borrower's loan and principal payments are required.

Repayment Schedule

The legal addendum to the Promissory Note stating the terms of loan repayment and fulfilling disclosure requirements. The repayment schedule is a plan that indicates the total principal and interest due, an installment amount, and the number of installments required to pay the loan in full. The schedule also contains the interest rate for the loan(s) included on the schedule, the due date of the first and subsequent installments, and the frequency of installments.

An entity that enters into a contract with a program participant to administer any aspect of its participation in a student loan program.
Standard Repayment Schedule

A repayment schedule under which the borrower pays the same amount for each installment payment throughout the entire repayment period or pays an amount that is adjusted to reflect annual changes in the loan's variable interest rate. The Standard Repayment Schedule cannot exceed 10 years, excluding in-school, grace, deferment, or forbearance periods.

A transfer in ownership of a defaulted FFELP loan from a guarantor to the Department of Education.
Subsidized Loan

A loan eligible for interest paid by the federal government. The federal government pays interest that accrues on subsidized loans during the student's in-school, grace, authorized deferment, and (if applicable) post-deferment grace periods, if the loan meets certain eligibility requirements.

Title IV

A section of the Higher Education Act of 1965, as amended, that authorizes federal loan, work, and grant education financial assistance programs.
Unsubsidized Loan

A non-need-based loan such as an unsubsidized Federal Stafford loan or PLUS loan. The borrower is responsible for paying the interest on an unsubsidized loan during in-school, grace, and deferment periods, in addition to the repayment periods.

Variable Interest Rate
An interest rate that changes, usually annually, according to prescribed methods.


Mission Statement


GCU's Financial Literacy Program has the core objective of providing financial awareness to current and previous students in order to educate and empower them to effectively manage their finances