Glossary of Student Loan Related Terms

Packaging

The process of assembling a financial aid package.

Parent Contribution (PC)

An estimate of the portion of your educational expenses that the federal government believes your parents can afford. It is based on their income, the number of parents earning income, assets, family size, the number of family members currently attending a university, and other relevant factors. Students who qualify as independent are not expected to have a parent contribution.

Parent Loans For Undergraduate Students (PLUS)

Federal loans available to parents of dependent undergraduate students to help finance the child's education. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received. PLUS loans may be used to pay the EFC. There is a minimal credit check required for the PLUS loan, so a good credit history is required. Check with your local bank to see if they participate in the PLUS loan program. If your application for a PLUS loan is turned down, your child may be eligible to borrow additional money under the Unsubsidized Stafford Loan Program.

Parental Contribution

An estimate of a parent's ability to contribute to a student's educational expenses.

Partial Cancellation

Cancellation of a disbursement or a portion of a disbursement rather than of an entire loan.

Partially Disbursed

The transfer of some but not all of the designated installments of the loan proceeds from the lender to the recipient.

PC

Parent Contribution

PCL

Primary Care Loan

Pell Grant

A federal grant that provides funds of up to $2,340 based on the student's financial need.

Pending

The status assigned to a loan application that has not completed the origination process and for which an approval or denial decision has not yet been made.

Pending Certification

The status assigned to a loan application that has not yet been certified by the school's financial aid officer.

Pennsylvania Higher Education Assistance Agency (PHEAA)

A guarantor of federal loans in Pennsylvania and West Virginia.

Perkins Loan

Formerly the National Direct Student Loan Program, the Perkins Loan allows students to borrow up to $3,000/year (5 year maximum) for undergraduate school and $5,000/year for graduate school (6 year maximum). The Perkins Loan has one of the lowest interest rates and is awarded by the financial aid administrator to students with exceptional financial need. The student must have applied for a Pell grant to be eligible. The interest on the Perkins Loan is subsidized while the student is in school.

PhD

One of several degrees granted by graduate schools.

PHEAA

Pennsylvania Higher Education Assistance Agency

PJ

Professional Judgment

PLAN

A test taken in the fall of the sophomore year in high school as practice for the ACT.

PLUS

Parent Loan for Undergraduate Students

PLUS Loan (Parent Loan for Undergraduate Students)

A federal loan made available to parents of Dependent undergraduate students. The parent may borrow up to the cost of education less the student's financial aid package to cover the student's total educational expenses.

Portable Funding

College funding that can be used at any college or university regardless of whether a student transfers or remains at his or her original school.

Pre-Approval (Prequalification)

The application process by which a potential PLUS or Private loan borrower can seek faster credit approval results.

Preliminary Scholastic Assessment Test (PSAT/NMSQT)

The PSAT is taken during the junior year as practice for the SAT. Scores on the PSAT are used to select semi-finalists for the National Merit Scholarship program.

Prepaid Tuition Plan

A college savings plan that is guaranteed to rise in value at the same rate as college tuition. For example, if a family purchases shares that are worth half a year's tuition at a state college, they will always be worth a half year's tuition, even 10 years later when tuition rates will have doubled.

Prepayment

Paying off all or part of a loan before it is due.

Primary Care Loan (PCL)

A low interest loan administered by the US Department of Health and Human Services (HHS). It is available to medical students pursuing medicine, osteopathy, dentistry, veterinary medicine, optometry, and podiatry. Undergraduate pharmacology students are also eligible. To be eligible for this loan, you must commit to working in the field of primary care. It was formerly known as the Health Professions Student Loan (HPSL).

Prime Rate

The rate at which banks borrow money from each other. Prime rate is an index used by variable-rate loan programs.

Principal

The amount of money borrowed or remaining unpaid on a loan. Interest is charged as a percentage of the principal. Insurance and origination fees will be deducted from this amount before disbursement.

Principal Balance

The outstanding amount of the loan on which the lender charges interest. As the loan is repaid, a portion of each payment is used to satisfy interest that has accrued, and the remainder of the payment is used to reduce the outstanding principal balance.

Private Loans

Education loan programs established by private lenders to supplement the student and parent education loan programs available from federal and state governments.

Professional Degree

A degree in a field like law, education, medicine, pharmacy or dentistry.

Professional Judgment (PJ)

For need-based federal aid programs, the financial aid administrator can adjust the EFC, adjust the COA, or change the dependency status (with documentation) when extenuating circumstances exist. For example, if a parent becomes unemployed, disabled or deceased, the FAA can decide to use estimated income information for the award year instead of the actual income figures from the base year. This delegation of authority from the federal government to the financial aid administrator is called Professional Judgment (PJ).

Professional Student?

A student pursuing advanced study in law or medicine.

Promissory Note

The binding legal document that must be signed by the student borrower before loan funds are disbursed by the lender. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy and cancellations. The student should keep this document until the loan has been repaid.

PSAT

Preliminary Scholastic Assessment Test