Glossary of Student Loan Related Terms

Safety School

A school that will almost certainly admit the student. The college admissions process is not predictable. Even "sure admits" are sometimes rejected. Some students are admitted to all the schools to which they apply; others are rejected by all the schools. To protect yourself against the latter scenario, you should apply to at least one safety school.

Sallie Mae

(Formerly known as SLMA or the Student Loan Marketing Association) The nation's largest secondary market. Sallie Mae holds approximately one third of all educational loans.

SAP

Satisfactory Academic Progress

SAR

Student Aid Report

SAT

Scholastic Assessment Test

Satisfactory Academic Progress (SAP)

A student must make this in order to continue receiving federal aid. If a student fails to maintain an academic standing consistent with the school's SAP policy, they are unlikely to meet the school's graduation requirements.

SC

Student Contribution

Scholarship

A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships are a form of gift aid and do not have to be repaid. Many scholarships are restricted to students in specific courses of study or with academic, athletic, or artistic talent.

Scholarship Search Service

A service that charges a fee to compare the student's profile against a database of scholarship programs. Few students who use a scholarship search service actually win a scholarship.

Scholastic Assessment Test (SAT)

One of two national standardized college entrance examinations used in the US. The other is the ACT. The SAT (previously known as the Scholastic Aptitude Test) is administered by the Educational Testing Service (ETS). Most universities require either the ACT or the SAT as part of an application for admission.

Secondary Market

An organization that buys loans from lenders, thereby providing the lender with the capital to issue new loans. Selling loans is a common practice among lenders, so the bank you make your payment to may change during the life of the loan. The terms and conditions of your loan do not change when it is sold to another holder. Sallie Mae is the nation's largest secondary market and holds approximately one third of all educational loans.

Secured Loan

A loan backed by collateral. If you fail to repay the loan, the lender may seize the collateral and sell it to repay the loan. Auto loans and home mortgages are examples of secured loans. Educational loans are generally not secured.

Selective Service

Registration for the military draft. Male students who are US citizens, have reached the age of 18 and were born after December 31, 1959 must be registered with Selective Service to be eligible for federal financial aid. If the student did not register and is past the age of doing so (18-25), and the school determines that the failure to register was knowing and willful, the student is ineligible for all federal student financial aid programs. The school's decision as to whether the failure to register was willful is not subject to appeal. Students needing help resolving problems concerning their Selective Service registration should call 1-847-688-6888.

Self Help Aid

Financial aid in the form of loans and student employment. If every financial aid package is required to include a minimum amount of self-help aid before any gift aid is granted, that level is known as the self-help level. 

SEOG

Supplemental Educational Opportunity Grant

Service Academy

The US Air Force Academy, US Coast Guard Academy, US merchant Marine Academy, US Military Academy, and US Naval Academy. Admissions are highly selective, as students must be nominated by their Congressional Representative in order to apply.

Servicer

An organization that collects payments on a loan and performs other administrative tasks associated with maintaining a loan portfolio. Loan servicers disburse loan funds, monitor loans while the borrowers are in school, collect payments, process deferments and forbearances, respond to borrower inquiries, and ensure that the loans are administered in compliance with federal regulations and guarantee agency requirements.

SFA

Student Financial Assistance

Simple Interest

Interest that is paid only on the principal balance of the loan and not on any accrued interest. Most federal student loan programs offer simple interest. Note, however, that capitalizing that interest on an unsubsidized Stafford loan is a form of compounded interest.

Simplified Needs Test

If the parents have an adjusted gross income of less than $50,000 and every family member was eligible to file an IRS Form 104A or 1040EZ (or wasn't required to file a federal income tax return), the Federal Methodology ignores assets when computing the EFC. If you filed a 1040 but weren't required to do so, you may be eligible for the simplified needs test. 

SLMA

Student Loan Marketing Association (aka Sallie Mae)

SLRA

Student Loan Reform Act (8-10-93)

SLS

Supplemental Loan for Students (previous loan type)

SLSA

Student Loan Servicing Alliance

SSIG

State Student Incentive Grants (now LEAP)

Stafford Loan Program

A federal education loan program that allows eligible undergraduate and graduate students attending approved educational institutions to borrow guaranteed loans at below-market rates. There is a subsidized and an unsubsidized version of this loan.

Stafford Loans

Federal loans that come in two forms: subsidized and unsubsidized. Subsidized loans are based on need; unsubsidized loans aren't. The interest on the subsidized Stafford Loan is paid by the federal government while the student is in school and during the six month grace period. The subsidized Stafford Loan was formerly known as the Guaranteed Student Loan (GSL). The unsubsidized Stafford Loan may be used to pay the EFC.

Standard Repayment Plan

A repayment schedule under which the borrower pays the same amount for each installment payment throughout the entire repayment period or pays an amount that is adjusted to reflect annual changes in the loan's variable interest rate. For FFELP loans, the Standard Repayment Schedule cannot exceed 10 years, excluding in-school, grace, deferment, or forbearance periods. Private loans may have a shorter or longer repayment term, depending on the loan program.

State Student Incentive Grants (SSIG)

A state-run financial aid program for state residents. The states receive matching funds from the federal government to help them fund the program.

Statement of Educational Purpose

A legal document in which the student agrees to use the financial aid for educational expenses only. The student must sign this document before receiving federal need-based aid.

Status

The position of the loan or loan application in the processing cycle. Status changes occur throughout the life of the loan, from application receipt to full repayment or cancellation of the loan.

Status Date

The date on which the last activity occurred which determined the loan's status.

Stipend

Fixed or regular pay; salary often awarded to the student with a fellowship, scholarship, or grant.

Student Aid Report (SAR)

Report that summarizes the information included in the FAFSA and must be provided to your school's financial aid office. The SAR will also indicate the amount of Pell Grant eligibility, if any and the Expected Family Contribution (EFC).

Student Contribution

The amount of money the federal government expects the student to contribute to his or her education, which is included as part of the EFC.  Student contribution depends on the student's income and assets, but can vary from school to school. Usually a student is expected to contribute about 35% of his or her savings and approximately one-half of his or her summer earnings above $1,750.

Student Loan Marketing Association (SLMA)

The old name for Sallie Mae. See Sallie Mae in this glossary for more information.

Subsidized Loan

With a subsidized loan, such as the Perkins Loan or the subsidized Stafford Loan, the government pays the interest on the loan while the student is in school, during the six month grace period, and during any deferment periods. Subsidized loans are awarded based on financial need and may not e used to finance the family contribution. See also Unsubsidized Loan.

Subsidized Stafford

A long-term, low-interest federal loan designed to provide students with additional funds for college. Subsidized means the interest on the loan is paid by the government while the student is in school and during periods of grace or deferment.

Supplemental Education Opportunity Grant

Federal grant program for undergraduate students with exceptional need. SEOG grants are awarded by the school's financial aid office and provide up to $4,000 per year. To qualify, a student must also be a recipient of a Pell Grant.

Supplemental Loan for Students

Federal loans for financially independent students. This program was eliminated in 1994 with the creation of the unsubsidized Stafford Loan program.