Glossary of Loan Terms for UCI Students

Loan Lingo: A Definition of Terms

acceleration	A clause inserted in the borrower's promissory note by a lending institution that allows the loan to be accelerated when it becomes past due. This means that the entire balance plus all interest accrued on the loan to date become immediately due and payable. This option is generally exercised at the time the loan is placed with a collection agency or assigned to internal collections staff as a problem account.
accrued interest	Interest which accumulates on the unpaid balance of loan principal.
amortization	The reduction and retirement of a debt through periodic payments of interest and principal.
amount lent	The principal or initial amount of the loan, on which the interest is calculated.
assignment (of a loan)	An institution may submit a defaulted loan to the Education Secretary for assignment to the United States Department of Education if, the institution has been unable to collect on the loan, when the loan is accelerated, and the amount of the borrower's account is $25 or greater.
bankruptcy	A petition for liquidation of debts under Chapter 7, 11, or 13 of the U.S. Bankruptcy Code. This means that a borrower has filed a petition for relief in bankruptcy from the payment of debt. When an institution receives a Notice of Meeting of Creditors, the campus must suspend billing for the debts included in the bankruptcy until further notification from the court.
borrower	The recipient of money in the form of a loan from a lending institution, who signs and legally agrees to the terms in the promissory note.
California Student Aid Commission (CSAC)	The state's agency which insures Federal Family Educational Loans against default for lenders and helps administer the FFEL Program for the federal government. CSAC administers state scholarships and grants such as Cal A, B and C. For more information, check out CSAC's web page.
Campus Billing Services	UCI's Accounts Receivable Office and ZOTBill information headquarters.
campus-based loans	Loan funds administered and collected by an institution and made available to eligible students who have demonstrated financial need.
cancellation	The removal of an obligation to repay the principal and interest on a loan, upon the fulfillment of specific requirements by the borrower. Refer to your promissory note for details.
capitalization of interest	The process of adding to the principal balance the unpaid accrued interest of an educational loan, thereby increasing the principal balance upon which future interest accrues, and increasing the total amount of the loan to be repaid.
capitalize	To add interest accrued on a loan to the principal balance. The accrued interest then increases and becomes part of the principal balance.
certification/ certified form	For Primary Care Loan (PCL) recipients an annual form used to certify your compliance with the terms of the PCL service obligation that ensures more favorable repayment terms. Contact the UCI Loan Services staff for assistance.
charges, late	A fee assessed on a borrower's account(s) when payments become past due by a certain number of days. The current late charge assessment is $2 per month.
charges, penalty	A fee assessed to a Perkins or National Direct Student Loan borrower's account when loan payments exceed a certain number of days past due. The current penalty charge assessment is $2 per month.
collection agency	An agency contracted for the direct collection recovery of certain delinquent campus accounts receivable or student loan accounts. In order to clear the debt the borrower must pay the principal balance, all accrued interest, late charges and other fees due, including the collection costs charged by the agency.
consolidation of a loan	Refinancing multiple education loans into one new, larger loan with a new repayment term and interest rate.
co-signer	Someone other than the borrower who assumes legal responsibility for repayment of a loan in the event the borrower does not pay. The co-signer must sign the loan documents along with the borrower.
costs, collection	"Reasonable costs" incurred by the use of an agency or commercial skip-tracing agency in an attempt to recover delinquent accounts receivable or student loan accounts. A borrower is responsible for paying all collection costs, attorney's fees, or court costs.
costs, court	A filing fee associated with having the defendant served in a small claims court. A borrower is responsible for all attorney fees and court costs if sued by a campus representative or a collection agency.
costs, litigation	Fees charged to reimburse the attorney or collection agency representing the university for their professional services, lawsuit service and court costs. The borrower pays litigation costs.
credit bureau	An agency that compiles, maintains and provides credit and other personal information to creditors. This information may include your paying habits, credit account references and balances, and place of employment.
credit check	A lender or credit grantor's inquiry to a credit reporting bureau to determine whether a potential customer seeking credit is likely to repay, based on the way other credit or loan obligations have been paid in the past.
credit report	A historical document that may include payment habits, number of credit or loan accounts, balance of those accounts, place and length of employment, and records of financial transactions. Note: You have both the right and the responsibility to examine your credit report and explain or correct the information in your report. A report fee may be charged, unless you were recently denied credit based upon information on your credit report.
credit-worthy	A determination made by lenders using a credit report as a scoring or evaluation tool to decide whether to extend credit or a loan.
debt	A legal obligation to repay moneys lent.
default	The failure of a borrower to make timely installment payments, or to comply with other terms of the promissory note or written repayment agreement.
deferment	A period during which a borrower who meets certain criteria may suspend loan payments. During an approved period of deferment, the borrower may or may not be required to pay interest on the loan. Refer to your promissory note for deferment eligibility.
delinquency	Failure to make one or more installment payments by the due date(s).
direct debit	The electronic transfer of a charge to a student's ZOTAccount.
direct deposit	The electronic transfer of funds credit to a student's banking or savings account. See EFT.
disbursement	Loan funds issued by the lender to the borrower. The actual amount received by a borrower, after the deduction of applicable fees and origination costs.
disbursement	The process of paying loan proceeds to the loan recipient by the lending institution.
disclosure statement	A statement of the total amount and cost of a loan, including the principal loan amount, interest rate and any additional finance charges or loan fees.
documentation	Written proof of eligibility for a specific loan benefit.
economic deferment	A suspension of a borrower's obligation to repay principal, during which interest may not accrue, for any period not to exceed three years, while the borrower is suffering economic hardship.
electronic funds transfer (EFT)	The electronic transmission of credits through the Accounts Payable unit of Accounting & Fiscal Services as a deposit to an employee's or student's checking or savings account.
eligible/eligibility	Relative to borrowing via a student loan, eligibility is based on financial need, as determined by federal regulations.
exit interview	A requirement of certain loan programs. May refer either to a loan repayment and debt management counseling session for recipients of student loans, or to a packet of information provided (online, by mail, or in person) to inform the loan borrower of grace periods, interest rates, loan rights and obligations, credit bureau reporting, cancellations, deferments and loan consolidation. Students must complete an online exit interview for campus-based loans through Loan Services' web page.
Federal Register	The government publication of regulations, regulatory amendments, notices, and proposed regulatory changes for all federal executive agencies. The Department of Education monitors educational institutions that participate in Title IV programs. Title IV funds include Pell, SEOG, Federal Perkins, and College Work Study programs. Each educational institution must follow the guidelines in the Federal Registrar to maintain eligibility to receive Title IV funds.
fee payment	A cash, e-check, financial aid, or graduate aid credit posted to a student's ZOTAccount.
finance charges	A set percentage charged to the borrower by a lender.
Financial Aid	The office charged with processing applications and awarding grants, scholarships and student loans to cover educational expenses. This office reports to the Vice Chancellor, Student Affairs.
Financial Services	NOT Financial Aid! Includes Campus Billing, Central Cashier, and Loan Services. This office reports to the Vice Chancellor, Administrative & Business Services.
forbearance	A temporary adjustment to a loan repayment schedule for a limited and specific time. In most cases, interest will accrue during a forbearance period. Refer to your promissory note to learn about qualifying for this kind of deferment.
forgiveness	In reference to student loans, the cancellation of a loan balance granted under certain circumstances, such as permanent and total disability or death of a borrower.
grace deferment	Deferment granted when a borrower returns to school and submits student deferment documents before the original grace period has expired.
grace period	Under most loan programs, a specified period of time beginning at the date the borrower graduates, withdraws or leaves school, during which interest does not accrue, and payments on interest or principal are not required. For Federal Direct Unsubsidized and Plus Loans, interest continues to accrue and borrowers must repay that interest (but not the principal) during the grace period.
guaranty agency	See CSAC.
hold - see also, record/account	A notation and code "flag" in a student's file which prevents registration, or release of records like transcripts, diploma etc.
holder of the note	The institution or agency which owns the loan.
interest (rate), adjustable	A fee charged for the use of borrowed money, which is tied to a fluctuating index such as the cost of Treasury Bills. As the index increases or decreases, so does the interest rate charged on the loan.
interest (rate), fixed	A fee charged for the use of borrowed money, based upon a set percentage rate.
interest-only payments	A payment which covers only the interest due on a loan and none of the principal balance.
interest subsidy	A government contribution that is provided to borrowers in certain loan programs to pay loan interest while the student is in school.
interest, borrower-paid	Interest which the borrower is required to pay during all periods of the loan.
interest, capitalized	Interest accrued (accumulated) on a loan that is added to the principal balance. The accrued interest then becomes part of, and increases, the principal balance used in calculating future interest.
interest, compounded	The frequency with which interest is computed and added to the principal balance. If the promissory note indicates that interest will be compounded, the lender will, at stated intervals, capitalize the accrued interest, increasing the principal balance.
interest, periodic	The frequency at which interest will accrue. For example, annual, quarterly, monthly or daily accrual.
interest, simple	A flat rate of interest that is not compounded, generally expressed as an annual rate. One day of simple interest is calculated by: loan balance x interest rate = daily amount of interest 365 (days in a year).
judgment	A court decision on a case. The entry of a judgment is a formal legal process for creating a public record of the court's decision. Judgments will appear on your credit bureau report and can affect your ability to receive future loans or credit, or to transfer property.
lender	The institution or agency that provides the money or funds when a loan is made. Lenders may be an educational institution, the Department of Education (Direct Loans), a commercial bank, or state agency (FFELP).
lender- (loan originator)	The school, bank, savings and loan, credit union, or other approved entity from which the borrower obtains a student loan.
litigation	A law suit, or the act of suing in a court of law. A borrower may be sued in a U.S. Court for non-payment of his/her loan obligation. If the court finds the borrower to be in default, he/she is held responsible for paying all costs associated with the suit.
loan	Borrowed money that must be repaid to the lender.
loan program	The term used to refer to either a general or specific type of loan, encompassing the requirements, regulations, guidelines and procedures that govern such a loan. Federal Perkins and University Loans are two loan programs. Loan limits, minimum payments and interest rates are often governed by federal regulations or institutional endowments and requirements.
obligation	A borrower's legal liability and responsibility for the terms of a loan.
origination fee	A processing fee calculated on the amount borrowed that is charged by a lender for making a loan, and deducted from the loan proceeds (the amount that the borrower receives). Under the FFELP and Direct Loan programs, this fee is paid to the federal government to offset the cost of the subsidy to borrowers.
PACE Plan	An optional registration fee payment plan that provides for three installments, the first to be paid by the quarterly registration fee payment deadline. A participation fee is charged in the amount of $25 for California residents, and $60 for non-residents.
part-time student	An undergraduate student enrolled in 10 units or less and a graduate student enrolled in 8 units or less.
payment	In general, money or something of value given in exchange for goods and/or services. Payments received on student loans are first applied to (collection) fees, then to accrued interest, and finally to the outstanding principal balance.
payment amount	In relation to student loans, the minimum amount established by an institution and periodically due according to a student's repayment plan.
payment cycle	The quarterly frequency at which a borrower is billed by EFG Technologies. The cycle is determined by the separation date of the borrower. For most June graduates, the payment cycle is every January, April, July and October.
payment frequency	The set time interval that dictates how often you will make your loan payments. The two options are monthly or quarterly statements from EFG Technologies.
payment schedule	An itemized list of payments in a loan repayment plan, showing payment frequency, payment due date, and number of payments; governed by regulations and discussed in the promissory note.
payment, accelerated	A condition brought about by default or non-payment of a loan, that renders the entire balance of outstanding fees, interest and principal immediately due and payable.
payment, advance	A payment designated for application toward future installments after all current and past due amounts are cleared.
payment, interest-only	A payment which covers only the interest due on a loan and none of the principal balance. If eligible under certain deferment benefits, the borrower may pay interest only, and defer the payment of principal until a later date.
payment, minimum	The smallest allowable amount established in a repayment plan, at a set amount of principal and interest to ensure the loan is repaid within 10 years.
penalty, (PCL service obligation)	A fee assessed to Primary Care Loan (PCL) recipients, for failure to fulfill the primary health care service obligation. The original amount of the PCL loan is recomputed at an interest rate of 12 percent from the date of issuance, compounded annually. For example: If $48,000 was borrowed, and the borrower defaulted on the service obligation three years after graduation, he/she would owe $65,000 after the penalties were enforced. He/she would be required to repay that amount within 3 years, at $2,200 per month. Refer to your promissory note for further details.
QuickSearch	Financial Services system which combines records from Accounts Receivable and Collections (ARC) with ZOTAccount information, for convenient access to student accounts.
principal	The amount borrowed, or the amount on which you pay interest and must pay back, which may increase as a result of capitalization of interest.
principal balance	The portion of the original loan, plus capitalized interest, which the borrower has not yet satisfied through payment or cancellation.
promissory note	A contract or legal document between a borrower and a lender that states all the terms and conditions under which a borrower promises to repay the loan. By signing the promissory note, the borrower agrees to be bound by the terms and conditions of the loan.
record/account hold	A notation and code "flag" in a student's file which prevents registration or release of records like transcripts, diploma etc. Holds may be placed on registration by academic departments or the Registrar for not declaring a major within the prescribed time frame, not maintaining a minimum 2/0 GPA, or for failure to fulfil certain requirements. Financial Account holds may be placed by campus departments for returned checks or past due debts.
referral	The process by which educational institutions turn over delinquent student loans to at least two outside collection agencies, according to campus policies, or as required by federal regulations. If the loan is a Federal Perkins or Federal Direct loan, these delinquent loans may be assigned to the US Department of Education for recovery.
registration	A process in which you enroll in classes and complete fee payment.
registration fees	A combination of applicable fees charged to the general student population, which at UCI may include an education fee, registration fee, Bren Center fee, associated student organization fee, professional fee, health insurance premium, UCI Student Center fee, and nonresident tuition.
renegotiating	The process of reaching a new repayment agreement within the maximum repayment period for a loan.
repayment	The act of paying back a debt.
repayment period	The timeframe during which full repayment must be made, prescribed for each type of loan. For most loan types, the maximum repayment period is 10 years, although the average loan is paid off in less time. Program benefits like deferments may extend the original repayment period.
repayment plan	A timetable which sets forth the principal and interest due in each installment, the number of payments required to pay the loan in full, the interest rate, and the due dates of the first and subsequent payments.
revolving fund	Funds allocated to educational institutions, either through endowment or from the U.S. Department of Education, to finance education. A student's prompt repayment of those loans allows the institution to recycle those payments to eligible financial aid recipients in the form of additional loans. Failure to repay student loans means that the loan fund is decreased and there will be less "low interest" money to lend. Subsequent students would then have to borrower less attractive "high interest" loans or pay higher fees associated with borrowing money.
rights and responsibilities	Provisions of a loan program, preserving certain options for the borrower, or specifying his obligations. Some examples of borrower rights include: The right to prepay all or part of the loan amount without penalty; A borrower is entitled to the return of the original promissory note(s) upon repayment of the entire loan balance; The borrower is entitled to be notified if his/her loan is transferred to a servicer or sold to a secondary market; If the borrower is unable to make payments, he/she may request a period of reduced or postponed payments (forbearance deferment). Examples of borrowers' responsibilities include: Providing proper documentation on or before an installment is due, or to request a deferment or forbearance; The borrower's need to learn about laws, regulations and/or policies governing his/her student loan; The obligation of a borrower to repay his/her loan(s) in accordance with the repayment schedule established by the lender. Even if he/she does not receive notification that a payment is due, he/she is obligated to contact the lender(s) if the borrower is having difficulty repaying the loan; The requirement that the borrower must inform the lender(s) if he/she: changes his/her name, address, phone number or social security number; graduates, withdraws or transfers to another school; registers for, or drops below, half time enrollment.
SBS	Student Billing System for registration fees, and the system which generates your ZOTBill and ZOTAccount Online for the payment of your registration fees.
secondary market	The group of institutions or entities which buy student loans from the FFELP originating lenders, (for example, loans from Bank of America are commonly sold to AFSA) thus providing lenders with funds to provide new loans. Borrowers are notified of these transactions within 30 days of the purchase of their loan(s).
separation	A term used when a student departs from UCI and is no longer enrolled at least half-time.
separation date	The date of the borrower's anticipated graduation or the date the borrower leaves/left school.
servicer	The organization which administers and collects loans, either the lender (holder of your loan) or an agent acting on behalf of the holder. Many lenders and secondary markets hire companies that specialize in the administration of student loans, and to handle billing, deferments, payments, etc. EFG Technologies (acronym for Education Finance Group) is the contracted servicer for the Regents of the University of California.
StudentAccess	UCI Registrar's online system for changing addresses, displaying holds, and applying for graduation via the Internet.
tax offset	The provision that allows education institutions to petition the state for all or a portion of a taxpayer's state income tax refund, lottery winnings and or any other payments due to the taxpayer from the State. The funds are sent to the campus and applied to the delinquent student loan account. This program requires annual notification to delinquent borrowers of the seizure of their refunds or winnings.
terms and conditions	The specific requirements of a loan, including those governing receipt and repayment of a loan.
transcript	A document containing a student's grades and the number of units completed for classes attended.
waiver	Credit given to clear certain fees from having to be paid.
WebReg	UCI Registrar's system for online enrollment via the Internet.
withdrawal	A formal process by which a student officially cancels his quarterly enrollment; also, the document used for this purpose.
ZOTAccount Online	System which enables students to view registration fee and student billing account information via the Internet.
ZOTBill	A consolidated registration fee statement that shows the amount of your registration assessment and any credits toward your fees. Online information available through ZOTAccount Online.

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