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Words Starting with I-L

Independent

An independent student submits only student income information on the FAFSA (Free Application for Federal Student Aid) and is not required to include parent information. The criteria for determining that a student is independent have been determined by the federal government and are as follows:

  • The student is or will be 24 years old during the academic year
  • The student is enrolled in a master's or doctoral program
  • The student is married when he or she completes the FAFSA
  • The student has a child or other dependent who receives more than half of his or her support from the student
  • The student is an orphan or ward of the court
  • The student is a an active member (for purposes other than training), or veteran of the U.S. Armed Forces

If one or more of these criteria apply to a particular student, that student will be considered independent and will not be required to include parent information on the FAFSA. The student will also be able to borrow a larger Federal Direct Stafford Loan. Also see dependent.

Interest

Interest on loans is a fee the lender charges for borrowing money. Interest is charged on loans from the time you sign a promissory note until the time you completely repay the loan. See interest rate information for Federal Direct Subsidized and Unsubsidized Loans, Direct PLUS, Perkins, and University loans.

Interest Rate

The interest rate is the annual percentage of the loan or credit card amount that is charged for its use. For Federal Direct Stafford Subsidized and Unsubsidized Loans, and Federal Direct PLUS Loan interest rates, please see interest rates on loans.

Judgment

A court order to pay a party a certain amount of money.

Lender

A lender is the financial institution that provides the money to be borrowed through a student loan program. The lender approves the loan and applies for the loan guarantor. See also loan servicer. Credit card companies are also lenders in that they extend credit to borrowers who agree to repay the balance for items charged or cash advances on a credit card.

Lien

The right to take and hold or sell the property of a debtor as security or payment for a debt or duty.

Loan

A loan is money borrowed that must be repaid.

Loan Fee

A loan fee is the expense of borrowing. This fee is deducted from each loan disbursement. Not all loans have fees.

Loan Origination

Loan origination is the process by which a lender brings a loan into existence and involves certification of the loan, guaranty, and completion of the master promissory note (MPN).

Loan Servicer

A loan servicer is a company hired by your lender to process loan repayments. See also loan guarantor.

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