Skip to content. | Skip to navigation

Personal tools
Log in


You are here: Home / Glossary / Words Starting with E-H

Words Starting with E-H

Expected Family Contribution (EFC) and Financial Need

Your EFC is a calculated figure that is used to estimate your family's ability to contribute towards your education. This figure is derived from a formula established by Congress and federal law and is based on the information you submit on the FAFSA. For more information, visit our Expected Family Contribution and Financial Need Explained page.

FAFSA (Free Application for Federal Student Aid)

The FAFSA is the federal application that a student must complete to receive federal, state, or institutional aid. For more information, visit our How to Apply for Financial Aid section. This application must be completed each year.

Fixed Interest Rate

A fixed interest rate is locked in at the origination of the loan and does not change during the term of the loan. See also variable interest rate.


Forbearance is a temporary postponement of loan payments for a period of time. Unlike deferment, interest accrues on your loans (whether they are subsidized or unsubsidized) during forbearance. If this interest is not paid off within the period of forbearance, it will be added to the principal, thereby increasing the total amount owed.

To determine whether or not you are eligible for a deferment or forbearance, contact your lender or loan servicer.

  • Federal Perkins Loans: contact the Penn State Student Financial Services at 814-865-0461 for specific information on repayment, deferment, and forbearance
  • Federal Direct Subsidized and Unsubsidized Loans (formerly Stafford Loans): contact the U.S. Department of Education at 800-848-0979 or your loan servicer for specific information on repayment, deferment, and forbearance
  • Federal Direct Parent PLUS Loan: Parents may contact the U.S. Department of Education at 800-848-0979

See also deferment.


Loan forgiveness occurs when the federal government cancels all or part of an educational loan because the borrower meets certain criteria, e.g., is performing military or volunteer service. See also cancellation. (Note: You may lose these privileges if you consolidate.)


Your FSA ID is the unique username and password combination created by you and used to securely access online resources and applications relating to student aid. The FSA ID has replaced the Federal Student Aid PIN.

If you are a dependent student, your parents should also apply for an FSA ID so they can access your financial aid applications online.


Certain aid programs require full-time enrollment. For undergraduate students, full-time enrollment is at least 12 credits; for graduate students, full-time enrollment is at least 9 graduate credits. Also see half-time.

Garnishment of Wages

Garnishment is the practice of withholding a portion of a defaulted borrower's wages to repay his or her loan, without consent.

Grace Period

In most cases, student loans offer a grace period, a period of time immediately following separation from school during which the borrower is not required to begin repayment. This period allows the borrower to find a job and establish a budget before repayment begins. Federal Direct Loans offer a six-month grace period. Federal Perkins Loans and University Loans offer nine-month grace periods.


The term gross refers to an overall total, excluding deductions. Your gross income, for example, is your total income without taxes or other items deducted from it.

The gross amount of your Subsidized and Unsubsidized Loan or Federal Direct PLUS Loan is the full amount you borrow, not including loan processing fees (1 to 3 percent). Once these fees are deducted, the net amount of your loan will be disbursed into your Bursar account to cover University charges, and any excess will be available as a refund. Also see net.

Guarantor/Guaranty Agency

The loan guarantor is the agency or institution that insures up-to-permissible limits against loss to lenders in the event of a default. The loan guarantor often reviews and approves the loan on a lender's behalf, where such arrangements have been made between the guarantor and the lender. See also loan servicer.


When federal loans are guaranteed by the guaranty agency, the agency is affixing federal protection to the loan. This protection ensures that the lender is repaid in the case of a default. The guaranty agency assumes responsibility for the defaulted loan and attempts to correct it.


To be eligible for most federal student aid, a student must be enrolled at least half-time. For undergraduate students, half-time enrollment is at least 6 credits; for graduate students, half-time enrollment is at least 5 graduate credits. Also see full-time.


In the event that a student does not complete specific University-related requirements, a hold may be placed on the student's University record(s), which prevents certain student actions or requests from occurring, such as future registration or the release of transcripts.


Action Steps to Aid










Aid Calculator


Money Manager


Loan Repayment