(Unit 2) College & Personal Finances Vocab Flashcards
Common Application
An undergraduate college
admission application to more than 900 member colleges and universities in the U.S., Canada, China, Japan, and many European countries.
Deferment
A type of payment where you purchase something and
pay for it later.
Forbearance
A type of loan for a temporary suspension of principal payments or to reduce your monthly payment amount for up to 12 months.
- Happens if you do NOT qualify for deferment.
Grace Period
A period of time after a deadline where financial obligation (e.g.: late fee or payment) may be met without penalty or cancellation.
Grants
Financial aid that is given based on financial need.
- does NOT need to be repaid
Scholarships
Financial aid that is given based on merit.
- does NOT need to be repaid
What’s the difference between a scholarship
and a grant?
Scholarships are merit-based and grants are
need-based.
Student Loans
Loans that are given in order to pay for education expenses
and must be paid back at a later time.
Subsidized Loans
Loans that do not accumulate interest while a student is enrolled in
school.
- The interest is paid by the government.
Unsubsidized Loans
Loans that accumulate interest while a student is enrolled in
school. The interest is NOT paid by the government.
Interest Rates
The percentage amount that a lender charges a borrower each year in order to borrow money.
- Price you pay for borrowing money
Private Loan
Loans that are offered by banks and credit unions—NOT the government.
- Private student loans can help you pay for college after you’ve explored scholarships and grants.
- Private loans are credit-based.
Award Letter
A document (“letters”) sent by a college or university providing information on the cost of attendance at a college for an academic year and any grants, scholarships, work-study opportunities, and loans the student is eligible to receive.
Financial Aid
Money that helps pay for education.
- NOTE: Grants, work-study, loans, and scholarships help make educational opportunities (college, career school, etc.) more affordable.
Tuition
The cost of taking classes at your school; your school charges you for the actual instruction.
Graduated Repayment Plan
A federal student loan repayment program for those who expect their incomes to rise over time and want to start by repaying with lower payments.
- Payments start off low and increase every 2 years or so.
Income-based Repayment Plan (IBR)
A federal student loan repayment program that adjusts the amount you owe every month based on your income and family size.
Types of Grants: Federal Pell Grant
A type of federal grant typically awarded to undergraduate students who display exceptional financial need.
- Students have to have earned a bachelor’s, graduate, or professional degree.
- Max. $5775 per year (Amount changes based on the year (For 2023-24: $6,895))
Types of Grants: Federal Supplemental Educational Opportunity Grant
A type of federal grant typically awarded to the most high needs students.
Types of Grants: TEACH grant
A type of federal grant for students who plan on going to teach after college.
Types of Grants: Work Study
A type of federal grant for students who work a part-time job on campus in return for paying off college expenses.
Types of Grants: California Grant (Cal Grant)
A type of financial aid specifically for students attending a UC, CSU, CA community college, or other qualifying schools in California.
Types of Loans: Stafford Loans
A type of low-interest loan with an interest rate range of around 3.86-5.41%.
- Maximum $5.5k per year.
1) Subsidized: The govt. pays the interest rate on your loan while you’re still in school.
2) Unsubsidized: The govt. does NOT pay the interest rate on your loan (Therefore, it will add up)
Types of Loans: Perkins Loans
A type of subsidized loan with a maximum of around $5.5 per year and about a 5% interest rate.
