Education.
Paying for school, financial aid, and student loans. Plain definitions for the FAFSA, repayment plans, and the rules that decide what college actually costs.
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529-to-Roth rollover
A 529-to-Roth rollover lets you move leftover college-savings money from a 529 plan into a Roth IRA without taxes or penalties, within limits.
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Capitalized interest
Capitalized interest is unpaid interest that gets added to your loan balance, so you start paying interest on your interest.
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Certificate program costs
Certificate program costs are the full price of a short, career-focused credential, including tuition, fees, supplies, and lost wages while you study.
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Coverdell ESA
A Coverdell ESA is a tax-advantaged savings account for education, where investments grow tax-free and qualified-school withdrawals are not taxed.
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Federal vs private student loans
Federal student loans come from the government with fixed rates and protections; private loans come from banks, with terms set by your credit.
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Forbearance
Forbearance is an approved pause or reduction in your federal student loan payments, during which interest keeps building on all loan types.
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In-state vs out-of-state tuition
In-state vs out-of-state tuition is the gap public colleges charge based on whether you legally live in the state that funds the school.
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Income-driven repayment
Income-driven repayment (IDR) sets your monthly federal student loan payment based on what you earn, not on your balance.
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Cost of attendance
Cost of attendance (COA) is a school's full yearly estimate of what college costs,…
FAFSA
The Free Application for Federal Student Aid, the free form you file to qualify for…
Need-based aid
Need-based aid is college money awarded based on your family's finances, not your grades,…
Loan servicer
A loan servicer is the company that manages your student loan: it takes your payments,…
Student loan default
Student loan default is the stage after months of missed federal loan payments, when the…
All education terms, A to Z
C 8 terms
Capitalized interest★
Capitalized interest is unpaid interest that gets added to your loan balance, so you start paying interest on your interest.
Certificate program costs★
Certificate program costs are the full price of a short, career-focused credential, including tuition, fees, supplies, and lost wages while you study.
Cohort default rate
The share of a school's borrowers who default on federal student loans within a set window, used as a rough measure of student outcomes.
Consolidation vs. refinancing student loans
Consolidation combines federal loans while keeping federal protections; refinancing swaps loans for a new private one, giving up those protections.
Cosigner release
Cosigner release is when a private lender removes the cosigner from a loan, leaving the main borrower solely responsible for the debt.
Cost of attendance
Cost of attendance (COA) is a school's full yearly estimate of what college costs, including tuition, housing, books, and living expenses.
Coverdell ESA★
A Coverdell ESA is a tax-advantaged savings account for education, where investments grow tax-free and qualified-school withdrawals are not taxed.
CSS Profile
A separate, more detailed financial aid form some colleges require to award their own institutional aid, in addition to the FAFSA.
D 4 terms
Deferment
Deferment is an approved pause on your federal student loan payments for a qualifying reason like school, unemployment, or military service.
Deferment vs. forbearance
Two ways to pause federal student loan payments. The main difference is who covers the interest during the pause on certain loans.
Dependency status
Dependency status is the FAFSA rule that decides whether you report only your own income or your parents' income too when applying for student aid.
Dual enrollment
When a high school student takes college courses for credit, often cutting the time and cost of a later degree.
E 2 terms
Entrance and exit counseling
Entrance and exit counseling are required online sessions that explain your federal student loans before you borrow and again before you leave school.
Expected Family Contribution (EFC)
The former name for the FAFSA-derived number measuring what a family could contribute, now replaced by the Student Aid Index (SAI).
F 5 terms
FAFSA
The Free Application for Federal Student Aid, the free form you file to qualify for federal grants, loans, and work-study for college.
FAFSA verification
FAFSA verification is a check where your school asks you to prove the income and details you reported on your student aid application were correct.
Federal vs private student loans★
Federal student loans come from the government with fixed rates and protections; private loans come from banks, with terms set by your credit.
Financial aid award letter
A college's offer laying out the grants, loans, and work-study it will provide, which families must read carefully to find the real net cost.
Forbearance★
Forbearance is an approved pause or reduction in your federal student loan payments, during which interest keeps building on all loan types.
G 2 terms
GI Bill benefits
GI Bill benefits are education payments earned through military service that help cover tuition, housing, and supplies for school or training.
Gift aid vs. self-help aid
Gift aid is money you do not repay, like grants and scholarships. Self-help aid is loans and work-study, which cost you repayment or effort.
I 3 terms
In-state vs out-of-state tuition★
In-state vs out-of-state tuition is the gap public colleges charge based on whether you legally live in the state that funds the school.
Income share agreement (ISA)
A way to pay for school where you promise a percentage of future income for a set time instead of taking a fixed-balance loan.
Income-driven repayment★
Income-driven repayment (IDR) sets your monthly federal student loan payment based on what you earn, not on your balance.
L 3 terms
Loan disbursement
Loan disbursement is when your student loan money is actually paid out, usually sent to your school first to cover tuition and fees.
Loan rehabilitation
Loan rehabilitation is a one-time program that takes a defaulted federal student loan out of default after a set of agreed monthly payments.
Loan servicer
A loan servicer is the company that manages your student loan: it takes your payments, tracks your balance, and answers your questions.
M 2 terms
Master promissory note
A master promissory note (MPN) is the legal contract you sign promising to repay your federal student loans and any interest and fees.
Merit aid
Merit aid is college money awarded for achievement, like grades, test scores, or talent, regardless of financial need.
N 2 terms
Need-based aid
Need-based aid is college money awarded based on your family's finances, not your grades, to cover what you can't afford to pay.
Net price vs sticker price★
Sticker price is a college's full published cost; net price is what you actually pay after grants and scholarships are subtracted.
P 4 terms
Pell Grant
A Pell Grant is federal need-based college money for low-income undergraduates that usually does not have to be repaid.
Prepaid tuition plan
A prepaid tuition plan lets you buy future college credits at today's prices, locking in tuition before it rises.
Private loan cosigner risk★
Private loan cosigner risk is the chance that, as a cosigner, you become fully responsible for someone else's student loan if they miss payments.
Professional judgment (financial aid)
Professional judgment is a financial aid officer's legal power to adjust your aid when your real situation differs from what your FAFSA shows.
R 4 terms
Refinancing student loans★
Refinancing student loans means a private lender pays off your existing loans and replaces them with one new private loan, ideally at a lower rate.
Repayment Assistance Plan (RAP)★
The Repayment Assistance Plan (RAP) is a new income-driven federal student loan plan that launches July 1, 2026, with payments scaled to your income.
Return of Title IV funds
Return of Title IV funds is the rule that decides how much federal aid you keep, or must pay back, if you withdraw from school early.
Room and board
Room and board is the cost of housing and food while you are in college, counted as part of your total cost of attendance.
S 9 terms
Satisfactory academic progress
Satisfactory academic progress (SAP) is the grade and pace standard you must meet to keep getting federal financial aid.
Scholarship vs grant
Scholarships and grants are both money for college you do not repay; scholarships usually reward merit, while grants are usually based on financial need.
Standard repayment plan★
The standard repayment plan is the default federal student loan plan with fixed monthly payments designed to pay the loan off in a set number of years.
Student Aid Index
The Student Aid Index (SAI) is a number from your FAFSA that schools use to measure how much aid you can receive.
Student loan default
Student loan default is the stage after months of missed federal loan payments, when the full balance comes due and stronger collection tools kick in.
Student loan delinquency vs default
Delinquency starts the day a student loan payment is late; default is the more serious stage after a long stretch of missed payments.
Student loan grace period
A student loan grace period is the set stretch of time after you leave school before your first federal loan payment is due.
Subsidized vs unsubsidized loans★
Two kinds of federal student loans: subsidized loans don't charge interest while you're in school, unsubsidized loans do.
Summer aid
Summer aid is financial aid you can use for summer classes, drawn from the same yearly limits as your fall and spring aid.
T 6 terms
Teacher loan forgiveness
Teacher loan forgiveness cancels part of your federal student loans after five full years teaching at a qualifying low-income school.
Tiered standard plan★
The tiered standard plan is the new fixed-payment federal repayment option where your payoff length is set by how much you owe.
Treasury offset
Treasury offset is when the government keeps your federal tax refund or certain federal payments to cover a defaulted federal student loan.
Tuition installment plan
A tuition installment plan lets you split one term's tuition bill into several smaller monthly payments instead of paying it all at once.
Tuition reimbursement
Tuition reimbursement is an employer benefit that pays you back for approved schooling costs, often after you pass the class.
Tuition vs. fees
Tuition is the charge for instruction; fees are the extra mandatory charges on top, which can add up to a real share of the bill.
W 2 terms
Wage garnishment (student loans)
When a defaulted federal student loan lets the government take part of your paycheck directly, without first suing you.
Work-study
Federal Work-Study is a financial aid program that gives eligible students a part-time job, usually on campus, to help pay for college.