Adversary Proceeding

You may file suit against one or more of your creditors to determine whether or not a debt, such as a student loan, is eligible to be discharged. An adversary proceeding can be filed in conjunction with a bankruptcy filing.



Paying off debt on a consistent repayment schedule through repeating installments over a length of time.


Area of Study

An area of study, often referred to as a “major”, is the primary subject you choose to study in school.


Associate’s Degree

An Associate’s degree is awarded upon completion of a college or university program that typically takes two years of full-time enrollment to complete. There are different varieties of Associate’s degrees, including Associate of Arts (A.A.), Associate of Science (A.S.), Associate of Applied Arts (A.A.A.), and Associate of Applied Science (A.A.S).


Bachelor’s Degree

A Bachelor’s degree is awarded upon completion of a college or university program that typically takes four years of full-time enrollment to complete. There are two types of Bachelor’s degrees: Bachelor of Arts (B.A.), and Bachelor of Science (B.S.).


Campus-Based Aid

Your college or university may offer financial aid from any or all of these three elective federal campus-based aid programs: Federal Supplemental Educational Opportunity Grant (FSEOG), Perkins Loans, and Federal Work-Study.


Certificate Program

A certificate program is a program of study (usually at a trade or technical school) that officially certifies you to perform certain job tasks upon completion.


Chapter 7 Bankruptcy

In Chapter 7, your assets are aggregated and sold, creditors receive payment from the sale, and then your remaining debt is discharged.


Chapter 13 Bankruptcy

Chapter 13 allows you to keep your assets and repay all or a portion of your debt in a court-approved repayment plan. This is also known as a Wage Earner’s Plan.


Clock Hour

If your institution uses clock hours, you earn academic credit based on the measured amount of time you spend attending class or doing coursework. You must complete a specified amount of clock hours before you obtain a certificate or degree.


Compounded or Capitalized Interest

The interest added based on the principal balance of a loan plus any prior interest accrued. “Capitalized” usually refers to interest you owe in debt, while “compounded” usually refers interest you earn on investments.


Coverdell Education Savings Account

An account set up by an adult for a minor for educational expenses. You must appoint an account beneficiary at the time you open the account. Total annual contributions to any beneficiary cannot exceed $2,000 per year, must be made in cash, and are not tax deductible. As long as the money in the Coverdell ESA does not exceed the beneficiary’s qualified educational expenses, it is not taxed.


Credit Hour

If your institution uses credit hours, each course is assigned a number of credit hours based on the length of each class period and the length of the entire course. You must obtain a specified amount of credit hours before you can obtain a degree.


Credit Score

National Consumer Reporting Agencies (TransUnion, Experian, Equifax) will assign you a number between 300 and 850 based on your financial behaviors, which is intended to predict your capacity to repay debt. Your financial activity can cause your credit score to increase or decrease. The higher your score, the more financially trustworthy lenders consider you.



Your health insurance company will likely require you to pay for a certain amount of expenses in addition to your premium before it begins to pay for your healthcare needs.


Dependent Care

Dependent care is the cost associated with meeting the needs of a child or other individuals for whom you are responsible.


Expected Family Contribution

An index number (not a dollar amount) based on a calculation created by the Department of Education. It helps your college or university determine the amount of federal financial aid you may be eligible to receive based on your household income and assets. The only way to obtain an EFC is by completing the Free Application for Federal Student Aid (FAFSA).


Financial Need

The portion of your school costs that you are unable to pay for out-of-pocket make up your financial need. Financial need is calculated by subtracting your Expected Family Contribution (EFC) from your Cost of Attendance (COA). You must demonstrate financial need in order to be eligible for some financial aid programs.


Graduate Degree

Graduate degrees, which include Master’s and Doctorate degrees, require you to complete academic program(s) of study beyond your Bachelor’s degree.


Hours of Enrollment

The amount of classes or clock hours you choose to take constitutes your hours of enrollment. This can include full-time, half-time, or part-time, which is defined by the total amount of time the institution determines your program of study should take to complete.


Institutional Aid

Your college or university may offer grants or scholarships from their own budget. These funds often come from endowments or alumni donations. These may be awarded based on merit, area of study, or financial need.


Out of Pocket Health & Wellness Costs

Your health insurance plan will likely not cover 100% of your health and wellness expenses. You may be responsible for some out-of-pocket costs, such as personal care items (like prescription lenses), co-pays (fees charged for visiting a doctor or filling a prescription), and deductibles.



An insurance premium is the amount you pay on a fixed schedule to keep your insurance policy active.



Generally, the sum of money you borrow in a loan, not including interest and fees. Principal can also refer to the initial sum of money you deposit into an account or investment.


Private College or University

Private colleges and universities are owned and operated by non-governmental entities and can be either for-profit or not-for-profit.


Private, For-Profit College or University

If a college or university operates with the intention to generate revenue for stakeholders, it is considered a for-profit (proprietary) institution.


Private, Not-For-Profit College or University

Private, not-for-profit colleges and universities operate without the intention to generate profit.


Professional Degree

Professional degrees require you to complete occupation-centered program(s) of study beyond your Bachelor’s degree. For example, you must obtain a Medical Doctorate (M.D.) before you can practice medicine.


Professional Judgment

If the information you were asked to provide on the FAFSA does not accurately reflect your financial reality, you may ask the financial aid office at your college or university to review your situation through the process of professional judgement. Your access to financial aid could be adjusted through this process.


Public College or University

Public colleges and universities are government-supported and operated and exist without the intention to generate profit.



The legal acknowledgement that you live in a certain state. Residency is assigned at birth and can be changed if you move and meet criteria established by your new state. At many colleges and universities, non-resident students are required to pay higher tuition rates than residents. Your institution will have specific criteria you must meet to obtain eligibility for in-state tuition.


Satisfactory Academic Progress (SAP/SAT)

Satisfactory Academic Progress (sometimes referred to as “SAP” or “SAT”) is a measurement that ensures you are successfully completing your coursework in a timely manner in order to maintain eligibility for financial aid.


Simple Interest

The interest added based only on the principal of a loan.



Any type of investment, account, or plan that provides tax-deferred or tax-free benefits.


Title I

Title I is a federally funded program that provides billions of dollars annually to school systems across the country for students at risk of failure and living at or near poverty.


Title I School

Schools with a student body comprised of at least 40% low-income students may apply for Title I funds.


Title IV

The part of the Higher Education Act of 1965 that provides guidelines about the United States federal financial aid program.


Trade or Technical School

Trade and technical schools offer degree and certificate programs that are shorter in length than undergraduate programs and teach competency-based career and technical skills.


Undergraduate Degree

Undergraduate degrees are awarded by colleges and universities and include Associate’s degrees and Bachelor’s degrees. They usually take two or four years to complete (respectively), depending on your enrollment status.


Undue Hardship

Paying back a loan presents long-term significant difficulty to maintain a minimal standard of living.


Wage Garnishment

If you fail to make payments according to the terms of your debt, your lender could make arrangements with your employer to seize a portion of your wages.