Financial Terms for a Student

Before you apply for a student loan, it's utmost necessary that you must be well-known to some financial terms. These terms give a better understanding about a specific loan as well help differentiate between different available loans.

A list of financial terms:

Financial aid: It is also known as a student financial aid that is granted by governmental and non-governmental organisations to help students pay educational fees and other expenses.

Grant: It is a type of funding that is mainly offered by the government department, corporation, foundation and trust as a form of financial assistance to the students. This type of monetary help is a bit different from a student loan. One big advantage is that the students don't have to repay.

FFEL: It stands for Federal Family Education Loan, a kind of monetary policy that relates to the United States higher education programs. In this program, private lenders offer federally guaranteed student loans to students and their parents. Commercial lenders also provide student loans by using their private capital. However, they receive financial backing (or subsidies) form the federal government.

Credit rating: It helps calculate the credit value of a financial institute, firm and individual for particular types of debt. It relates to the history of borrowing and repayment. It is calculated by the credit rating agencies.

EFC: It stands for Expected Family Contribution that signifies how much you and your family can spend on education expenses. It depends on the financial condition of a family. EPC shows financial information such as income, assets and other family details.

FAFSA: It stands for Free Application for Federal Student Aid. It is a forum that decides the Expected Family Contribution (EFC). The application containing financial information is analysed by the federal processor. The final outcome is send to the financial aid offices. This application is essential for determining the eligibility for federal, state and college-sponsored financial aid. It covers other financial areas such as grants, educational loans and work-study programs.

Bankruptcy: It is also termed as insolvency that is a legal state of an organization, a firm or an individual unable to repay the debts. The state of insolvency is known as a bankrupt.