Glossary Terms explain meaning of terms used on this website and in the Financial Aid industry. If you know what you're looking for just scroll down to the terms that interests you. In case you are
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Date Created (Scheduled Payment)
The date when the scheduled payment was created.
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Date interest will capitalize
The accrued unpaid interest will capitalize at the end of the day that you have input for your calculation.
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Date Scheduled Payment to be Debited
The date when the scheduled payment will be debited from the bank account we have on record for you.
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Debt Collector
The most common use of this term applies to anyone who collects debts. However, under the federal Fair Debt Collection Practices Act (FDCPA), the term only applies to collection agencies and lawyers (or their employees) that are collecting debts for others. State laws may cover other types of collectors.
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Debtor
Any person who owes money to another.
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Debtor's Examination
This is normally a court ordered proceeding in which a debtor must appear in court or in an attorney's office to answer questions about current income and assets from which a judgment may be collected. In many states, failure to appear at a debtor's examination can result in an arrest warrant.
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Debt-to-Income Ratio
A debt-to-income ratio is the ratio of total debt to the borrower's income. It is generally a good ballpark measure of the borrower's ability to repay the debt. If the debt-to-income ratio is less than 1, the borrower should be able to afford to repay the debt. If the debt-to-income ratio is more than 2, the borrower will have significant difficult repaying the debt and may be at high risk of default. Borrowers with higher incomes, however, may be able to repay a debt despite a high debt-to-income ratio since more of their income is often disposable and not required to pay for basic necessities. Lenders these days are more likely to rely on the debt-service-to-income ratio, which is the ratio of the normal monthly payments on the borrower's loans to the borrower's gross monthly income. This measure takes into account the ability of a borrower to make a loan more affordable by increasing the loan term so that the monthly payments are lower.
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Default
Failure to pay a loan according to the terms agreed to in the promissory note. For FFEL and Direct Loans, default occurs if a borrower fails to make a payment for 270 days if the loan is repaid monthly.
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Default Aversion
The activities of a guaranty agency that are designed to prevent a default by a borrower who is at least 60 days delinquent and that are directly related to providing collection assistance to the lender.
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Default Fee
Synonymous with Guarantee Fee.
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Default Status
If you're claiming that your loan was not in default, and therefore, should not have been assigned to a guaranty agency or the Department, you must provide us with evidence that your loan should not be in default status. In most cases the loan was declared in default by some organization other than the guaranty agency or the Department. For National Direct Student Loans (NDSL)/Perkins Loans, you must contact the school, and, if the school determines the loan was not in default, the school may request that we return the loan to the school. For Federal Family Education Loan (FFEL) loans, the guaranty agency that paid the insurance claim on the loan determined that the loan was in default, so you must contact the agency and demonstrate that the loan was not properly placed in default.If the organization which declared the loan in default is now closed, you must provide specific evidence that you took timely and appropriate actions, such as notifying the lender, submitting appropriate forms for deferment, and that the organization defaulted the loan in error.
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Defendant
In a lawsuit, this is the person or business that is being sued.
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Defense
A legal reason why a court should not award any or all of what is requested in a lawsuit. For example, a statement that the money is not owed is a defense to a collection lawsuit.
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Deferment
A deferment means you may postpone making payments on your loan under certain specific conditions. On an unsubsidized loan, the interest is accrued, which means it's added to the principal of the loan. No interest will accrue during deferment on subsidized loans.
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Delinquency
Failure to make loan payments when due. Delinquency can lead to default.
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