{"id":26834,"date":"2023-05-11T07:00:41","date_gmt":"2023-05-11T12:00:41","guid":{"rendered":"https:\/\/www.escoffier.edu\/?p=26834"},"modified":"2024-07-09T11:25:45","modified_gmt":"2024-07-09T16:25:45","slug":"financial-aid-glossary-terms-you-should-know-before-culinary-school","status":"publish","type":"post","link":"https:\/\/www.escoffier.edu\/blog\/financing-your-education\/financial-aid-glossary-terms-you-should-know-before-culinary-school\/","title":{"rendered":"Financial Aid Glossary: 36 Terms You Should Know Before Culinary School"},"content":{"rendered":"

Let\u2019s talk about creating a financial plan for culinary school. At first, the financial aid process<\/a> might seem slightly intimidating, with myriad financial aid terms to digest. What\u2019s the real difference between a \u201cDirect PLUS Loan,\u201d and a \u201cDirect Subsidized Loan”? How does an income-based repayment plan really work\u2026in simple terms?<\/p>\n

To grasp the essential information you need to know, we\u2019ve compiled a glossary so you can easily make sense of it all. Keep reading to understand the top financial aid terms that may help you plan for your future!<\/p>\n

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Table of Contents<\/div>\n
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A-E<\/h2>\n

Academic Year<\/h3>\n

An academic year is considered one full school year, completed at the same school. In the case of a \u201cyear-round\u201d program, nine months is typically one complete academic year.<\/p>\n

Aid for Military Family Service<\/h3>\n

For veterans, future military personnel, and active duty<\/a>, the federal government and certain nonprofit organizations may offer funding benefits for college.<\/p>\n

Capitalization<\/h3>\n

This is the addition of unpaid accrued interest to the outstanding balance of a loan, which could increase your monthly payment.<\/p>\n

Cost of Attendance<\/h3>\n

The overall cost of attendance to attend school can usually include tuition, room, board, educational supplies, loan fees, and sometimes, other additional expenses.<\/p>\n

Default<\/h3>\n

When you fail to repay most federal loans as outlined in the terms of your promissory note, a loan will go into default. This usually transpires if you haven\u2019t made a loan payment in 270 days<\/a>, which could lead to legal ramifications.<\/p>\n

Deferment<\/h3>\n

Under special circumstances, loans may enter a deferment period, which is a temporary postponement. Usually, interest will not accrue on certain subsidized loans.<\/p>\n

Direct Consolidation Loan<\/h3>\n

This type of loan replaces one or more existing federal education loans with one single loan\u2014requiring one monthly payment.<\/p>\n

Direct PLUS Loan<\/h3>\n

Usually two categories qualify for a Direct PLUS Loan: parents of dependent undergraduate students and graduate or professional students.<\/p>\n

Direct Subsidized Loan<\/h3>\n

With a Direct Subsidized Loan, students are not responsible for paying interest while in school, grace, or deferment periods, and interest won\u2019t accumulate while the student is in school either. This type of loan usually allows the borrower a \u201cdeferred grace period,\u201d of six months after the last date of attendance or if a student falls below half time.<\/p>\n

Direct Unsubsidized Loan<\/h3>\n

With a Direct Unsubsidized Loan, the borrower must pay interest, which does<\/em> accumulate while the student is in school, regardless of the status. This type of loan also allows the borrower a \u201cdeferred grace period,\u201d of six months after the last date of attendance or if a student falls below half time.<\/p>\n

Discretionary Income<\/h3>\n

Discretionary income may determine the borrower\u2019s eligibility for specific repayment plans and\/or loan rehabilitation. This type of calculation examines the borrower’s annual income, plus a percentage of the poverty guidelines for the borrower\u2019s family size and state of residence.<\/p>\n

Eligible Program<\/h3>\n

This type of organized instruction or study usually leads to an academic, professional, vocational certificate, or other recognized education credential.<\/p>\n

Endorser<\/h3>\n

If a Direct PLUS Loan borrower suddenly becomes unable to make payments on a loan, the endorser or loan co-signer is someone who agrees to pay the loan.<\/p>\n

F-L<\/h2>\n

Federal Pell Grant Program<\/h3>\n

This is the largest federal grant program, specifically for undergraduates from low-income households. Usually, it doesn\u2019t need to be repaid, unless a student withdraws and owes a refund.<\/p>\n

Federal Student Aid<\/h3>\n

This type of student aid is a culmination of grants, loans, and work-study programs designed to help students pay for college or career school from the government.<\/p>\n

Federal Supplemental Educational Opportunity Grant<\/h3>\n

This opportunity grant is available for undergraduate students who demonstrate a financial need\u2014usually ranging from $100 to $4,000. This usually doesn\u2019t need to be repaid.<\/p>\n

Federal Work-Study (FWS) Program<\/h3>\n

The FWS program<\/a> offers part-time jobs for undergraduate and graduate students who demonstrate financial need. This type of program is facilitated through your school\u2019s financial aid office, which can help you secure a qualified opportunity. This is typically completed through a school, nonprofit organization, or private company.<\/p>\n

Forbearance<\/h3>\n

Forbearance is a period of time that allows you to temporarily reduce monthly payments or stop them entirely. While this period might be necessary under certain circumstances, interest does continue to accrue during forbearance periods.<\/p>\n

Graduated Repayment Plan<\/h3>\n

This specific plan begins with lower monthly payments that increase every two years (usually with your earned income). Generally, you have 10 years to pay everything off or, up to 30 years, if you apply for a consolidated loan. If you are unable to repay in that time frame, you may contact the Department of Education<\/a> to discuss possible solutions.<\/p>\n

Grant<\/h3>\n

A grant is a monetary gift for those obtaining a higher education and is usually based on financial need. Usually, it doesn\u2019t need to be repaid, unless you withdraw from a program early.<\/p>\n

Interest<\/h3>\n

Interest is an expense charged from borrowing money and is usually paid to a lender. Usually, this is a percentage of the unpaid principal loan.<\/p>\n

Lender<\/h3>\n

A lender is an organization that allows students to borrow funds\u2014such as a school, credit union, or bank.<\/p>\n

Loan Discharge<\/h3>\n

Under loan discharge, borrowers no longer need to repay a loan under certain circumstances such as death, disability, fraud, bankruptcy, and identity theft.<\/p>\n

Loan Forgiveness<\/h3>\n

Under loan forgiveness, a student loan may be fully or partially forgiven for a specific amount of years at a qualified job.<\/p>\n

M-Q<\/h2>\n

Master Promissory Note (MPN)<\/h3>\n

A Master Promissory Note is a master legal document that defines the terms of your loan. It entails the borrower\u2019s rights and repayment obligations.<\/p>\n

Merit-Based<\/h3>\n

Merit-based scholarships or funds are usually awarded based on a student\u2019s grades or skill set.<\/p>\n

PLUS Credit Counseling<\/h3>\n

PLUS credit counseling offers 1:1 guidance to graduate\/professional students and parents\u2014specifically around taking on student loan debt and borrowing a PLUS loan.<\/p>\n

Principal<\/h3>\n

Principal is the amount of money borrowed or that\u2019s remaining on a loan, on which interest is paid.<\/p>\n

Public Service Loan Forgiveness Program<\/h3>\n

After you\u2019ve made 120 qualifying monthly payments under a qualified repayment plan, The PSLF Program<\/a> forgives the remaining balance on your Direct Loans. You must be working full-time for a qualifying employer.<\/p>\n

R-Z<\/h2>\n

Rehabilitated Loan<\/h3>\n

This is one method to get your student loan out of default mode. You must contact your loan holder to begin this process.<\/p>\n

Revised Pay As You Earn (REPAYE) Program<\/h3>\n

This type of repayment plan usually involves monthly payments that equate to 10% of your discretionary income.<\/p>\n

Satisfactory Academic Progress<\/h3>\n

Each school usually instills a \u201ctracking process\u201d to ensure students will graduate in their respective programs \u201con time.\u201d On top of this, usually students are required to maintain a certain level of academic progress to remain eligible for federal student aid.<\/p>\n

Scholarships<\/h3>\n

Scholarships<\/a> are academic-based gifts that support students who are pursuing an undergraduate degree and don\u2019t need to be repaid. These types of rewards usually span a variety of categories, including merit, academic, need, and diversity.<\/p>\n

Student Loan Debt Burden<\/h3>\n

This is usually a specific percentage of a borrower\u2019s monthly income that is allocated toward student loan payments.<\/p>\n

Total and Permanent Disability (TPD) Discharge<\/h3>\n

This type of discharge relieves borrowers from repaying federal student loan(s) and\/or completing the Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.<\/p>\n

Unsubsidized Loan<\/h3>\n

This type of loan offers students a low, fixed interest rate and various repayment options, which are not based on financial need.<\/p>\n

Get a Financial Aid Plan in Place<\/h3>\n

Ready to take the next step toward your culinary career goals, but need to get a financial aid plan<\/a> in place? Contact us today<\/a> and allow our team to help guide your financial decisions when it comes to culinary school!<\/p>\n

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