Glossary - C

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Campus-Based Aid

Financial aid programs administered by the university. The federal government provides the university with a fixed annual allocation which is awarded by the financial aid administrator to deserving students. The Perkins Loan Program, Supplemental Education Opportunity Grant (SEOG), and Federal Work-Study are examples of campus-based aid.

Campus-Based Programs

The term applied to the majority of postsecondary education; Federal Perkins Loan Program, Federal Work-Study (FWS) Program, and, Federal Supplemental Educational Opportunity Grant (FSEOG) Program (See individual program names).


This occurs when a borrower meets specific requirements that permit nullifying the borrower's obligation to repay all or a designated portion of principal and interest on a student loan. It may also be referred to as "discharge."


The interest is added to the principal amount of your loan and additional interest will be based upon the higher amount.

Capitalizing Interest

A process in which interest that has accrued but not been paid is added to the loan principal for both the FFEL and Federal Direct Loan Programs. Capitalizing is a consequence of delaying interest payments; it increases the amount of the principal and, consequently, the total amount that must be repaid.


An award granted for the successful completion of a sub-baccalaureate program of studies, usually requiring less than 2 years of full-time postsecondary study.

Certification Verification

Verification that a student is enrolled on at least a half-time basis, making satisfactory academic progress, therefore qualifying them for federal and private loans. Certification must be made prior to disbursement of funds.


A student must be one of the following to receive federal student aid:


A person who signs the promissory note for a loan in addition to the borrower. The co-borrower becomes equally responsible for the debt. If the borrower does not pay, the co-borrower is responsible for payment of the debt.


Cost Of Attendance- The total cost of attending a post-secondary institution for one academic year. The student's budget usually includes tuition, fees, room, board, supplies, transportation, and personal expenses.


A group of individuals who have a statistical factor in common, for example, year of birth.


Property of a borrower that is pledged by the borrower to protect the interests of a lender. It may become property of the lender if the borrower fails to repay the associated loan. Collateral is the lender's security for loans made.


A postsecondary school that offers general or liberal arts education, usually leading to an associate's, bachelor's, master's, doctor's, or first-professional degree. Junior colleges and community colleges are included under this terminology.

Combined Elementary and Secondary School

A school that encompasses instruction at both the elementary and secondary levels. Examples of combined elementary and secondary school grade spans would be grades 1-12 or grades 5-12.

Commercial Bank

An institution whose primary function is making loans to businesses.

Compound Interest

Interest that is periodically added to a principal sum, resulting in a new principal balance, which then triggers a new interest assessment.


Combining several federal (and possibly private) loans from multiple lenders into a single loan to reduce the monthly payment amount and/or increase the repayment period.

Consolidation Loan

A consolidation loan combines several loans into one bigger loan. This sometimes results in a lower interest rate, as when a consumer loan is used to pay off credit card balances. Such loans often reduce the size of the monthly payment by extending the term of the loan. An extension of the term of the loan may also increase the overall cost of the loan. Consolidation loans also simplify the repayment process by allowing a single payment instead of several. Direct Consolidation Loans are available through the establishment of an Individual Education Account. A loan originated by the Student Loan Marketing Association (Sallie Mae) or other eligible lenders. The loan can combine multiple student loans made under Title IV programs, the Health Professions Student Loan (HPSL) Program, the Health Education Assistance Loan (HEAL) Program, and the recently included Nursing Student Loan Program (NSLP) into a single loan with one monthly payment. Delinquent or defaulted borrowers may be allowed to establish a repayment schedule through a consolidation loan. Compare FEDERAL DIRECT


A second creditworthy party who signs a promissory note with a borrower who does not have collateral or good credit history. The second party guarantees that the loan will be repaid if the borrower fails to make payments.

Cost of Attendance (COA)

Section 472 of the Higher Education Act sets forth specific statutory parameters for cost of attendance (COA) for Title IV aid programs.