Financial Literacy


Student Loan Industry Glossary

The following are general terms related to student loans and some are specific to your account serviced by MOHELA. They are adapted from the 2017 Common Manual.

Academic Attendance: Is synonymous with "attendance at an academically-related activity." See the separate glossary definition of "attendance at an academically-related activity".

Academic Period: A measured period of enrollment (e.g., a semester, trimester, quarter, or clock hours).

Academic Year: For the purposes of determining a borrower’s Title IV aid eligibility, a period during which an undergraduate, full-time student is expected to complete either of the following:

  • At least 30 weeks of instructional time and 24 semester or trimester hours, or 36 quarter hours in an educational program that measures program length in credit hours.
  • At least 26 weeks of instructional time and 900 clock hours in an educational program that measures program length in clock hours.

Upon written request from a school, the Department may reduce the minimum number of weeks in an academic year to between 26 and 29 weeks of instructional time for a credit-hour program that leads to an associate degree or a bachelor’s degree.

For a graduate or professional program, an academic year is a period of at least 30 weeks of instructional time. There is no statutory minimum number of hours that a student must complete within the academic year for a graduate or professional program.

Accredited School: Any school that meets standards established by a nationally recognized accrediting agency, and for which that agency has provided documented acknowledgment of the school’s compliance. (See also Preaccredited School.)

Accrediting Agency: An agency that sets educational standards for schools, evaluates schools, and certifies that schools have met these standards. A "nationally recognized accrediting agency" is one that the U.S. Department of Education has recognized to accredit or preaccredit a particular category of school or educational program according to 34 CFR Parts §602 and §603. The agency grants accreditation status to schools.

The Department publishes a list of nationally recognized accrediting agencies that the Department has determined to be reliable authorities as to the quality of education or training offered. If the Department determines that there is no nationally recognized accrediting agency qualified to accredit schools in a particular category, the Secretary of Education will appoint an advisory committee, composed of persons specially qualified to evaluate training provided by schools in such category, to prescribe the standards a school must meet in order to participate in the Title IV programs and to determine whether an individual school meets those standards.

Act, the: The Higher Education Act of 1965, as amended. Title IV, Part B of the Act addresses FFELP loans.

Actual Interest Rate: The annual interest rate a lender charges on a loan, which may be equal to or less than the "applicable"—or statutory—interest rate on that loan.

Additional Unsubsidized Stafford Loan: The amount of a student’s eligibility for an unsubsidized Stafford loan that is in addition to the student’s base Stafford loan eligibility.

Administrative Forbearance: A temporary suspension of, a reduction of, or an extension of time for making principal and/or interest payments on a Stafford, SLS, PLUS, or Consolidation loan that is granted by the holder or lender, upon notice to the borrower or endorser, and that does not require a written request from the borrower or an agreement signed by the borrower before the forbearance is granted.

Administrative Wage Garnishment: Process by which a guarantor, under federal law, may intercept a portion of the wages of a borrower with a defaulted FFELP loan.

Agent: An officer or employee of a school or an institution-affiliated organization. This definition is applicable to the disclosure and reporting requirements for schools, institution-affiliated organizations, and lenders that issue, recommend, promote, endorse, or provide information relating to FFELP and private education loans.

Aggregate Loan Limit: The borrower’s maximum allowable unpaid principal amount throughout the student’s academic career. Principal outstanding is calculated by adding the total outstanding amount guaranteed, after subtracting any refunds, payments to comply with the requirements for the return of Title IV funds, prepayments, payments, cancellations, funds discharged, or any other reductions to the principal. Capitalized interest or any collection costs that may have been added to the principal balance are not included in the borrower’s aggregate loan limit.

Agreement: Any written contract, agreement, or letter of understanding between the guarantor and another entity that specifies the rights and duties of each party with respect to participation in the guarantor’s programs and/or utilization of the guarantor’s services.

ALAS: See Auxiliary Loans to Assist Students (ALAS)

AmeriCorps: A national and community service program created by the National and Community Service Trust Act of 1993 and administered by the Corporation for National Service. For each year of full-time service in the program, participants will receive education awards to help finance their postsecondary education or pay back their student loans.

Annual Loan Limit: The maximum Stafford loan amount a student may borrow for each academic year of study.

Anticipated Graduation Date: The date on which a student is expected to complete an academic program. This date is provided by a school official when certifying the borrower’s loan, and in subsequent enrollment status updates.

Application: The form the borrower uses to apply for a Stafford, PLUS, or Consolidation loan.

Applicable Interest Rate: The maximum annual interest rate (under the Higher Education Act of 1965, as amended) that a lender may charge on a loan. Sometimes referred to as the Statutory Interest Rate.

Assignment: Language placed on or attached to the promissory note indicating a change or transfer of loan ownership.

Assignment of a Loan: Any change in the ownership interest of a loan, including a pledge of such an ownership interest as security.

Attendance at an Academically-Related Activity: Attendance at an academically-related activity includes, but is not limited to:

  • Physically attending a class.
  • Submitting an academic assignment.
  • Taking an exam.
  • Participating in an interactive tutorial.
  • Engaging in computer-assisted instruction.
  • Attending a student group that is assigned by the school.
  • Participating in an online discussion about academic matters.
  • Initiating contact with a faculty member to ask a question about the academic subject studied in the course.

Attendance at an academically-related activity does not include an activity in which a student may be present but not academically engaged, including, but not limited to:

  • Living in school housing.
  • Participating in the school's meal plans.
  • Logging into an online class without active participation.
  • Participating in academic counseling or advisement. [§668.22(l)(7)(i)(B)]

Authority: Any private nonprofit or public entity that may issue tax-exempt obligations to obtain funds to be used for the making or purchasing of FFELP loans. "Authority" also includes any agency, including a state postsecondary institution or any other instrumentality of a state or local government unit, regardless of the designation or primary purpose of that agency, that may issue tax-exempt obligations, any party authorized to issue those obligations on behalf of a governmental agency, and any nonprofit organization authorized by law to issue tax-exempt obligations.

Auxiliary Loans to Assist Students (ALAS): A previous name for what became the SLS loan. The Omnibus Reconciliation Act of 1981 extended the Parent Loans for Undergraduate Students (PLUS) program to include loans for independent undergraduate students and graduate and professional students. These loans were called Auxiliary Loans to Assist Students or ALAS. The Higher Education Amendments of 1986 repealed the ALAS program and authorized two separate loan programs in its place— Supplemental Loans for Students, or SLS loans, for graduate students, professional students, and independent undergraduates, and PLUS loans for parents of dependent students.

Award Year: The period from July 1 of a given calendar year to June 30 of the following calendar year.