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# 1098-T An Internal Revenue Service (IRS) form that all educational institutions, such as MIT, are required to complete at the end of the calendar year for each enrolled student who was billed and/or paid tuition.

A Academic year A period of time colleges and universities use to measure a quantity of study. The MIT Academic Calendar (http://web.mit.edu/registrar/calendar/) is available from the Registrar's Office.

Accrued interest

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Interest that accumulates on the unpaid principal balance of a loan.

Adjusted gross income An Internal Revenue Service (IRS) term referring to wages, salaries, interest, dividends, etc., minus certain deductions from income as reported on a federal income tax return.

Aggregate loan limit The total amount of money that can be borrowed from a loan program over a student’s period of study.

Annual loan limit The amount of money that can be borrowed from a loan program during one academic year.

Annual percentage rate (APR) A rate that reflects the total cost of borrowing money over the life of the loan, considering not only the interest rate but also the effect of other loan fees.

Assets When used as a financial term, assets mean tangible items of monetary value.

Authorized payer A person, most often a parent, who is designated by an MIT student as being allowed to view the student’s monthly online bill and make payments using MITPAY.

B

Borrower The person who, by signing a promissory note, agrees to the terms of a loan and therefore is legally responsible for its repayment.

Budget The estimated price to attend a college or university for one year. The budget is used to determine financial aid eligibility. It includes tuition, fees, room, board, books, supplies, personal and travel expenses.

Business/Farm Supplement A supplement to the CSS Financial Aid PROFILE application used to collect financial information from self-employed parents, or from parents who own any part of a business or farm.

C Campus Partners An outside billing service retained by MIT to handle the billing, accounting and data processing services for loans MIT holds, including Federal Perkins Loans and MIT Technology Loans.

Cancellation The release of borrower’s obligation to repay all or a designated portion of principal and interest on an education loan. Also called discharge or forgiveness of a loan.

Capitalization The addition of unpaid interest to the principal balance of a loan. Compounding is

The addition of unpaid interest to the principal balance of a loan. Compounding is another term used for capitalization.

Co-borrower A person other than the borrower who, by signing a loan promissory note as a backup, agrees to assume responsibility for repayment if the borrower fails to repay.

The term is generally used interchangeably with co-signer and endorser.

Collection costs Expenses charged to an individual whose account is in collection for failure to bring the account current.

College Scholarship Service (CSS) The division of the College Board, which is a national nonprofit association that offers services in the areas of college admissions, assessment, guidance, financial aid, and enrollment. The CSS provides the financial aid services, including the CSS PROFILE and the Institutional Documentation Service (IDOC).

Community service A service performed by an individual or organization to benefit the public and its institutions. While the term is often used as a synonym for volunteering, community service work can be paid or unpaid.

Consolidation The process of combining eligible education loans into a single new loan.

Credit balance The amount of credits in an account in excess of the charges.

Credit bureau An organization that tracks credit histories and issues credit reports. There are three main credit bureaus in the United States: Experian, Equifax and TransUnion.

Credit report A very detailed snapshot of an individual’s financial history.

Credit score A three-digit number ranging from 300 to 900 that reflects a statistical assessment of a person’s probable ability to repay a loan or debt. Sometimes called a FICO score.

Creditworthy A term used to describe an individual whose track record of timely repayments on debts indicates that he or she is likely to continue to manage future credit obligations well.

CSS PROFILE An online financial aid application produced by the College Board’s College Scholarship Service (CSS) and used by private institutions such as MIT to award their institutional financial aid.

D Default The failure of a borrower to repay according to the terms agreed to when the promissory note was signed.

Deferment A postponement of payment on an education loan that is allowed under certain conditions.

Delinquency The failure to make scheduled loan payments when due.

Dependent As a financial term this refers to an individual who relies on another person, usually parent(s), for financial support.

Direct deposit A secure electronic transfer of payment into a bank account.

Disbursement Payment of financial aid to a student’s account by a school.

Discharge The release of borrowers from their obligation to repay all or part of their loans. Also referred to as cancellation.

Disclosure statement A statement showing the terms and conditions of a loan.

E Entrance Counseling

Entrance Counseling A mandatory information session to explain a borrower’s rights and responsibilities, which takes place before a new borrower at a school receives a loan. The counseling can be in-person or online.

Exit Counseling A mandatory information session for a borrower who graduates, withdraws, or attends less than half-time to explain the borrower’s loan repayment responsibilities, including when repayment begins. The counseling can be in-person or online.

Expected family contribution (EFC) The amount that parents and students are expected to contribute toward the student’s college expenses.

F Family Educational Rights and Privacy Act (FERPA) A federal law that protects the privacy of student education records, including financial information. This law applies to all students who are at least 18 years old, and to schools that receive funds under an applicable program of the U.S. Department of Education.

Federal Direct Consolidation Loan A federal loan that combines several types of federal student loans into one loan with one monthly payment.

Federal Methodology (FM) The system used to determine a student’s eligibility for federal student financial aid.

The system used to determine a student’s eligibility for federal student financial aid.

Federal Student Aid PIN An electronic personal identification number that serves as an identifier to allow a federal student aid applicant to access personal information in various U.S. Department of Education systems. It also acts as the applicant’s digital signature on some online forms.

Federal Student Financial Aid Programs authorized under Title IV of the Higher Education Act that provide grants, loans, and work-study funds from the federal government to eligible students.

Detailed information about federal student aid programs is available at studentaid.ed.gov (https://studentaid.ed.gov/).

Federal student aid for MIT undergraduates includes: Federal Pell Grants Federal Supplemental Educational Opportunity Grants Iraq and Afghanistan Service Grants Teacher Education Assistance for College and Higher Education Grants Federal Perkins Loans Federal Direct Subsidized Stafford Loans Federal Direct Unsubsidized Stafford Loans Federal Direct PLUS Loans for Parents Federal Work-Study Federal student aid for MIT graduate students includes: Teacher Education Assistance for College and Higher Education Grants Federal Perkins Loans Federal Direct Unsubsidized Stafford Loans Federal Direct PLUS Loans for Graduate and Professional Degree Students Federal Work-Study

Federal Work-Study

Financial hold A notation on a student record resulting from a student account balance from a prior term, a past-due MIT loan, unpaid Institute charges, or a returned check. A financial hold prevents a student from registering or receiving a diploma, and may also cause MIT student services to be revoked.

Financial need The difference between the budget and the expected family contribution.

Forbearance A temporary suspension or reduction in monthly loan payments granted to borrowers who are willing but unable to make loan payments due to certain types of financial hardships.

Free Application for Federal Student Aid (FAFSA) The FAFSA is online application for all federal student aid, including grants, loans, and work-study. The FAFSA gathers the information required to determine need and eligibility according to the Federal Methodology.

G Grace period A payment-free period that follows the student’s graduation, withdrawal, or in some instances dropping below half-time enrollment status. Grace periods vary by loan program, but typically are six to nine months.

Graduated repayment plan

Graduated repayment plan A loan repayment plan with lower payments at first, increasing about every two years.

Grant A form of financial aid that does not need to be repaid and that is ordinarily awarded on the basis of financial need. Sometimes used interchangeably with the term scholarship, though scholarships are generally awarded on the basis of merit. At MIT, the MIT Scholarship is a need-based grant.

H Hope Scholarship and Lifetime Learning Educational Credits An Internal Revenue Service (IRS) education tax credit. Detailed information can be found on this IRS website.

I I-9 (Employment Eligibility Verification Form) A U.S. Citizenship and Immigration Services form that all U.S. employers are required to collect once from all employees, including U.S. citizens, no later than the first day of work. The employee must substantiate the information on the form through an original document that establishes their eligibility for employment in the United States.

Income-driven repayment plan A loan repayment plan with the monthly payment adjusted each year based on the borrower’s (and spouse’s) annual income.

borrower’s (and spouse’s) annual income.

Independent As a financial term this refers to an individual who does not rely on another person, usually parent(s), for financial support.

Institutional Documentation Service (IDOC) A service offered by the College Board that allows families applying for financial aid to submit documents such as federal tax returns and W2 forms to the College Scholarship Service to be securely displayed online for participating schools.

Institutional Methodology (IM) Formula used by many colleges, universities, graduate and professional schools, and private scholarship programs, including MIT, to determine an applicant’s need and eligibility for private, nonfederal student aid funds.

Interest A charge for a loan, usually a percentage of the amount loaned.

Interest rate The percentage at which interest is charged on a loan. A fixed interest rate is a constant rate of the amount borrowed; a variable interest rate is subject to change, anywhere from monthly to annually. It is normally tied to an index such as the U.S. prime rate, which is the interest rate banks charge to large corporations for shortterm loans; U.S. treasury bills; or the London Interbank Offering Rate, or LIBOR.

L Late charge

Late charge A charge assessed to students for failure to pay the minimum amount due on their student account by the deadline, or for failing to make a timely student loan repayment.

Light load registration A term used at MIT to refer to registering for fewer than 32 units.

Loan Financial aid that is borrowed and must be repaid.

Loan fee A fee charged to a borrower by the lender and deducted from the loan proceeds before disbursement. Ordinarily loan fees are deducted proportionately from each loan disbursement.

Loan holder The organization that holds the loan promissory note and has the right to collect from the borrower. Many banks sell their loans, so the initial lender and the current loan holder could be different.

Loan repayment options Special repayment features offered at the discretion of the lender. Some education loan programs have loan repayment options either to make payment more convenient and less expensive and/or to reward timely payment.

Loan servicer The agency employed by a lender to service student loans. Servicing can include billing, collecting and posting payments, processing requests for deferment,

billing, collecting and posting payments, processing requests for deferment, forbearance and cancellation, and responding to general borrower inquiries.

M M-4 The Massachusetts Employee’s Withholding Exemption Certificate, which that allows employees to exempt themselves from having Massachusetts state tax withheld from their paychecks based on certain criteria.

Master promissory note (MPN) A binding legal document which a borrower signs that contains a feature allowing the borrower to sign once to receive multiple loans under the same program in different academic years. The MPN lists the terms and conditions under which money is borrowed and explains the borrower’s rights and responsibilities.

Merit-based aid Financial aid that is awarded based on a student’s academic, athletic or artistic merit, or some other criteria, and does not depend on financial need.

Military scholarships Reserve Office Training Corps (ROTC) scholarships available from the U.S. Army, U.S. Navy and U.S. Air Force for students who are attending participating schools, including MIT. These scholarships often cover tuition, fees, books and supplies, and pay a subsistence allowance.

MIT Monthly Payment Plan A low-interest financing plan offered by MIT, through Tuition Management Services (TMS), allowing students and their authorized payer(s) to pay the balance due on

(TMS), allowing students and their authorized payer(s) to pay the balance due on the student account in regular monthly installments.

MIT Scholarship MIT scholarships are need-based grants that come from a variety of sources including endowment funds, gifts from alumni and friends, and general tuition revenues.

MIT Technology Loan (Tech Loan) A low-interest loan for international undergraduates. Tech Loans require a creditworthy co-signer and are awarded by, and repaid to, MIT.

MITPAY The electronic method by which MIT notifies students and any authorized payers each month of any amounts owing on the student account and allows optional electronic payments.

N Need analysis The process that determines a student’s financial need by analyzing the biographical and financial information provided by the student and parents (or by a student and spouse).

Need-based aid Financial aid that is awarded based solely on a student’s financial circumstances.

Need-based aid can be awarded as grant or scholarship, student loans, or work opportunities.

Need-blind admissions An admissions policy that excludes any consideration of a student’s financial circumstances, including the amount of financial aid for which he or she might qualify.

Negative amortization A situation that can occur in loan repayment if the fixed repayment amount is less than the interest accruing each month.

Net price An estimate of the actual price the student and family will pay in a given year based by subtracting any grants or scholarships awarded to that student from the budget.

Noncustodial parent A term used in connection with separated and divorced parents to refer to the parent who does not have custody of the child, meaning the child does not live with this parent.

NSLDS (National Student Loan Data System) A Database for federal student financial aid where federal aid recipients can locate information about the aid they've received. Students access NSDLS at www.nslds.ed.gov (http://www.nslds.ed.gov) by using their federal student aid PIN.

O Off-campus employment A term used most often in connection with student employment, which refers to

A term used most often in connection with student employment, which refers to working for any employer other than MIT.

On-campus employment A term used most often in connection with student employment, which refers to working for MIT.

Outside awards Any financial aid awarded to a student from a source other than MIT, such as community groups, high schools, corporations, foundations, or a parent’s employer.

Overaward The amount of financial aid awarded to a student that exceeds that student's financial need.

P Parent contribution The amount, as determined by need analysis and a review of individual circumstances as provided by the family, that a dependent student’s parents can reasonably be expected to contribute toward that student’s education.

Past due The amount that was scheduled to be paid in previous month(s), but was not. The past-due amount may also called the delinquent or default amount.

Principal The sum of money borrower plus any interest that is capitalized.

Private loan An non-federal education loan from a lender such as a bank, credit union, or state agency.

PROFILE The CSS PROFILE is an online financial aid application produced by the College Board’s College Scholarship Service (CSS) and used by private institutions such as MIT to award their institutional financial aid.

Promissory note A binding legal document a borrower signs each time they receive a loan. The promissory note lists the terms and conditions under which money is borrowed and explains the borrower’s rights and responsibilities.

R Rehabilitation The process of bringing a loan out of default and removing the default notation on a borrower’s credit report.

Repayment schedule A description of the borrower’s monthly payment, due dates, interest rate, total repayment amount and length of time for repaying the loan.

Research Assistant A person who is a member of a research group in a laboratory or on a project, whose principal duty is to contribute, under supervision, to a program of

whose principal duty is to contribute, under supervision, to a program of departmental or interdepartmental research.

S Satisfactory academic progress An acceptable rate of student academic course completion using qualitative and quantitative measures.

Scholarship A form of financial aid that does not need to be repaid and that is ordinarily awarded on the basis of merit. Sometimes used interchangeably with grant, though grants are generally awarded on the basis of financial need. The MIT Scholarship is a need-based grant that does not need to be repaid.

Self-help The combination of student loans and term-time work that MIT offers to undergraduates as part their financial aid package. It is called self-help because these types of financial aid – loans and work – require the student to assume responsibility for meeting part of their financial need.

Social Security number (SSN) A nine-digit number assigned by the Social Security Administration (SSA) that is often used as a form of identification. Everyone who works in the United States must have a Social Security number.

Standard repayment plan A loan repayment plan that requires a fixed monthly payment over a fixed period of time .

time .

Student account An exact record of a student’s financial transactions, including charges and credits; similar to a bank account. Charges include tuition, fees, housing, dining, TechCASH, the student extended insurance plan, medical charges, library fines, etc. Credits include family payments, scholarships, grants and loans.

Student Aid Report (SAR) A summary of the information a federal student aid applicant submits on the FAFSA. The SAR includes an EFC, which is a number that is used to determine eligibility for federal student aid, but not aid from MIT.

Student contribution The amount, as determined by need analysis and a review of individual circumstances provided by the family, that a student can reasonably be expected to contribute toward his or her own educational expenses. For undergraduates the student contribution is the summer earnings expectation unless the student has significant prior year income and assets.

Student Information Review Form (SIRF) An MIT form that undergraduates offered an MIT scholarship are required to complete to determine if their scholarships will be funded from a particular donor’s fund or general funds.

Subsidized loan A loan in which there is monetary assistance granted to the borrower to assist with the interest expense.

Summer earnings expectation The minimum amount an undergraduate is expected to earn and save during the summer.

T Teaching Assistant A person who assists a faculty member in grading undergraduate quizzes and homework, instructing in the classroom and/or laboratory, preparing apparatus for demonstrations, posting web-based materials and conducting tutorials.

TechCASH A declining-balance spending program for MIT students, employees and affiliates.

Participants deposit money into their TechCASH account and then use their MIT ID card to make purchases on campus and with a few off-campus vendors. The TechCASH account includes all transactions, including deposits and debits.

Truth in Lending statement A document provided to loan recipients that explains the interest rate and other information regarding the loan the student has received. The statement is required by the Consumer Credit Protection Act.

U Unsubsidized loan A loan in which there is no monetary assistance granted to the borrower to assist with the interest expense. The borrower may either pay the accruing interest monthly or allow the interest to be capitalized.

monthly or allow the interest to be capitalized.

V Verification A procedure whereby the school checks the information that the student reported on the financial aid application, usually by requiring a copy of the tax returns or other documents filed by the student and/or parent(s).

W W-4 The Employee’s Allowance Withholding Certificate, a federal form that allows employers to withhold the correct amount of federal income tax from employees’ paychecks.

WebSIS MIT’s web-based system that provides secure access only to enrolled students for viewing their academic, financial and biographical records.

Work Financial aid that the student earns with a job. This is considered one of the three types of financial aid along with money you do not need to pay back (grants or scholarships) and money you do pay back (loans).