Definitions

Acceleration
At 120 days past due, a loan may be accelerated at which time the entire principal, interest, and fees becomes due and payable. Upon acceleration the right to deferment and forbearance provisions is lost.

Cancellation
A benefit for the Perkins loan program that allows the borrower to have up to 100 percent of the original principal loan amount canceled if the borrower performs qualifying service. Qualifying service must be performed after receiving the loan. A deferment postpones payment during the period of service until certification of completed service is provided for cancellation. A maximum of one-year increments of service can be deferred and cancelled at a time.

Loans may also be cancelled for death and Total and Permanent Disability. Please contact SFS for additional information about the Total and Permanent Disability cancellation benefit and process.

Collection Agency
A company that is contracted by the original lender to collect past due and defaulted accounts.

Default
The failure of a borrower to make an installment payment when due or comply with the terms of the promissory note or written repayment agreement.

Deferment
The temporary cessation of payments upon the request of the borrower if you are enrolled in school half-time or greater, unemployed, or during periods of economic hardship. Deferment is also used for periods prior to cancellation for the Perkins loan program. Interest does not accrue during this period. Specific criteria must be met to be eligible for this benefit.

Forbearance
The temporary cessation of payments upon the request of the borrower due to financial trouble, health problems, or if the total of their Title IV loans exceeds 20 percent of his or her monthly income. Interest accrues during this period and can either be paid during the forbearance period or by lump sum at the end of the forbearance period when repayment continues.

Forgiveness
See Cancellation.

Guarantor
Guarantors are private not-for-profit or state agencies that guarantee Stafford, PLUS, and consolidation loans. This guarantee allows lenders to make loans to people without requiring credit checks or collateral securities.

Half-time Graduate Student
When an enrolled graduate or professional student who is carrying a half-time academic workload as determined by the institution according to its own standards and practices. At SPU, a half-time graduate course load is determined to be 3 credits per quarter.

Half-time Undergraduate Student
When an undergraduate student is enrolled for a t least six semester or six quarter hours for an institution using a standard semester, quarter, or trimester system. At SPU, a half-time undergraduate course load is determined to be 6 credits per quarter.

Initial Grace Period
That period which immediately follows a period of enrollment and immediately precedes the date of the first required repayment on a loan. This period is generally nine months for the Perkins and Nursing loan programs and six months for the SPU Institutional and other FFELP loans.

In-school Deferment
A benefit that will postpone repayment if enrolled at least half-time or greater. There are specific colleges, universities, and programs that are not eligible for deferment. Contact Campus Partners for eligibility. Deferment must be requested by the borrower and must include enrollment verification from the school of attendance. A grace period of six months will follow the last period of enrollment. SPU Institutional Loans provide In-school Deferment only during periods of half-time or greater enrollment at Seattle Pacific University.

Loan Consolidation
When multiple Title IV loans are combined into one loan for ease of payment. Payment in full is made to the original lenders and combined into one single loan. Minimum scheduled payment amounts are usually smaller compared to when the loans were separate. In most cases, the repayment term is extended and the interest rate is figured by a weighted average.

Post-deferment Grace Period
The period of six consecutive months, which immediately follows the end of certain periods of deferment and precedes the date on which the borrower is required to resume repayment on a loan.

Postponement
The deferment of payment prior to cancellation of a Perkins loan. The deferment will discontinue payments until the period of service has elapsed for certification and cancellation eligibility.

Promissory Note
A legal agreement that is signed by the borrower promising to repay the loan amount borrowed and agreeing to the terms and conditions of the loan made. The institution retains the original promissory note until the loan is paid in full. A copy of the Promissory Note may be requested during repayment and when the loan has been paid in full. When paid in full the Note will be marked “PAID”.

Rehabilitation
Stafford, Perkins, and SPU Institutional loan programs provide rehabilitation of defaulted loans. After receipt of monthly payments according to the payment schedule established with the loan holder, the negative information about the loan is removed from the borrower’s credit report and a new 10-year repayment period (including the rehabilitation period) is established for the loan; deferment and forbearance rights will be reinstated.  Rehabilitation may be completed for a loan only one time.