Glossary of Student Loan Related Terms

Illinois Student Assistance Commission (ISAC)

A guarantor of federal loans in Illinois.

IM

Institutional Methodology

In Service

A display showing the loan type and name of the servicer where the loan currently resides. Loans are placed in service at the time of disbursement. Current information on disbursed loans is at the servicer.

In-School Interest Rate

Rate at which interest accrues on Federal Stafford Loans while students are enrolled at least half-time in school. The in-school rate is typically lower than the rate at which interest accrues when the loan is in repayment.

In-State Student

A student who has met the legal residency requirements for the state, and is eligible for reduced in-state student tuition at public colleges and universities in the state.

Income

The amount of money received from employment (salary, wages, tips), profit from financial instruments (interest, dividends, capital gains), or other sources (welfare, disability, child support, Social Security and pensions).

Income Contingent Repayment

Under an income contingent repayment schedule, the size of the monthly payments depends on the income earned by the borrower. As the borrower's income increases, so do the payments. The income contingent repayment plan is not available for PLUS Loans.

Income-Sensitive Repayment 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.

Incomplete Loan

A loan application submitted where some or all of the necessary information or backup paperwork is missing or unacceptable, therefore an approval or denial decision cannot be made.

Independent

An independent student is at least 24 years old as of January 1 of the academic year, is married, is a graduate or professional student, has a legal dependent other than a spouse, is a veteran of the US Armed Forces, or is an orphan or ward of the court (or was a ward of the court until age 18). A parent refusing to provide support of their child's education is not sufficient for the child to be declared independent.

Independent Status

A student is considered Independent if he or she: is 24 years or older (as of 12/31 of the award year), is a graduate or professional student, is married, has legal Dependents, is an orphan or ward of the court; or is a veteran of the U.S. Armed Forces.

Independent Student

A student who meets one or more of the following criteria: 1. An individual who is at least 24 years old by December 31 of the award year. 2. An orphan or ward of the court. 3. A veteran of the U.S. Armed Forces. 4. A graduate or professional student. 5. A married person. 6. An individual with legal dependents other than a spouse. 7. A student for whom the school's financial aid administrator determines and documents the student's independent student status based on the administrator's professional judgment of the student's unusual circumstances.

Index

An index is a money market rate such as the Prime Rate or a Treasury Bill that lenders use to determine interest rates for the loans they offer to customers. An index is used almost exclusively for variable rate loans.

Individual Retirement Account (IRA)

One of several popular types of retirement funds. It is not legal to borrow money from your IRA to help pay for your children's education.

Ineligible Loan

A loan or loan application that does not meet Federal guidelines or lender requirements.

Installment Loan

A consumer loan in which the principal and interest are repaid on a regular (usually monthly) schedule. The payments are called "installments" and are all for the same amount.

Institutional Methodology (IM)

If a college or university uses its own formula to determine financial need for allocation of the school's own financial aid funds, the formula is referred to as the Institutional Methodology.

Institutional Student Information Report (ISIR)

The electronic version of SARs delivered to schools by EDExpress.

Insurance Fee

Fee passed on by the lender to the federal government as insurance against default. Insurance fees are charged as the loan is disbursed and typically run to 1% of the amount disbursed.

Interest

Amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal balance of the loan. The percentage rate may be fixed for the life of the loan or it may be variable, depending on the terms of the loan. All federal loan issued since October 1992 use variable interest rates that are pegged to the cost of US Treasury bills.

Interest period

The contractual period of time during which interest accrues or is charged.

Interest Rate

The actual rate of simple interest paid by the borrower. Different types include: 1. Variable: Will adjust according to economic and market conditions. This could be monthly, or annually. 2. Fixed: The interest rate will remain the same for the entire term of the loan.

Interim Period

The period of time from the date a loan is disbursed until the loan enters repayment. The interim period may range from six months to seven years, depending on the type of loan and the student’s educational program.

Internal Revenue Service (IRS)

Federal agency responsible for enforcing US tax laws and collecting taxes.

Internship

Part-time job during the academic year or the summer months in which a student receives supervised practical training in their field. Internships are often very closely related to the student's academic and career goals and may serve as a precursor to professional employment. Some internships provide very close supervision by a mentor in an apprenticeship-like relationship. Some internships provide the student with a stipend, and some don't.

IRA?

Individual Retirement Account

IRS

Internal Revenue Service

ISIR

Institutional Student Information Report

ISLLC

Iowa Student Loan Liquidity Corporation