Glossary of Terms


Some of these terms may appear in this packet, while other terms may be used on loan applications or federal materials. It is our attempt to make sure that the Federal Loan Program information is convenient to all. If you have further questions or concerns, please contact us at (973) 290-4445.

Federal Stafford Loan Program:

This loan is offered to students by a lender such as a bank, credit union or saving and loan association. These loans are approved by a guarantee agency. The amount listed on the Financial Aid Award Notice is the anticipated amount of the student’s eligibility. The guarantee agency determines the final approval.

Loan Deferment:

Deferment of loan proceeds from bill until loan funds are disbursed into the student’s account. Failure to comply with all loan procedures may result in a suspended deferment and an account balance.


Loan funds issued by your lender in check form (normally co-payable to you and the school) or electronic funds transfer (EFT).

Interest Rate:

A percentage of your outstanding principal loan amount charged for the use of borrowed money.

Master Promissory Note:

A legally binding contract between student and lender that contains all the conditions and terms under which you agree to repay your loan(s) with interest.

Subsidized Loan:

A loan on which interest is paid by the federal government during school, grace and other authorized deferment periods. A student must demonstrate financial need to qualify for this particular Stafford loan.

Unsubsidized Loan:

A loan which you are responsible for all interest payments during school, grace and other authorized deferment periods.


The loan amount you borrow without any interest.


Failure to repay your loan according to the terms agreed upon in the promissory note.

Origination Fee:

A fee charged to offset administrative costs of the Stafford Loan Program.


When unsubsidized loans are deferred, the interest that accrues is added to the principal loan amount, thus increasing your total loan debt.