Glossary of Financial Aid Terms

"C" Terms

Capitalization

When a lender accrues interest before the borrower starts repayment, then adds that amount to the principal. This is sometimes called "compounding." Capitalizing increases the total to be repaid and the size of the minimum monthly payment. Students can avoid capitalizing interest by paying interest as it accrues.. Lenders may capitalize no more often than quarterly; the more frequently interest is capitalized, the more quickly it increases.

Citizen/Eligible Non-Citizen

Students must be one of the following to receive federal student aid: U.S. citizen; U.S. national (includes natives of American Samoa or Swain's Island); U.S. permanent resident who has an I-151, I-551 or I-551C (Alien Registration Receipt Card).

College Board

A national membership association that supports educational transitions through programs and services in assessment, guidance, admission, placement, financial aid, and educational reform.

Commercial Lender

Generally, lenders are commercial banks, savings and loan associations, credit unions, stock savings banks, trust companies or mutual savings banks or state agencies created specifically for this purpose. Commercial lenders provide services offered through the Federal Family Education Loan Programs as well as a variety of other loan programs for both students and parents.

Consensus Approach to Determining Family Ability to Pay

Created by the 568 Presidents' Group, this reformulation of the institutional methodology is used at approximately 35 colleges and universities, including Duke University, to determine the ability of each student's family to support the annual costs of attendance.

Consolidation

Combining two or more loans into one new loan that has a longer repayment term and a single monthly payment that is smaller than the sum of previous monthly payments. By consolidating eligible federal student loans and extending the repayment term (up to 30 years, depending on the total loan amount), repayment can be easier. Note that while this may ease the borrower's cash flow, consolidation can add significantly to the amount of interest that is paid over time. As a general rule, Duke recommends against consolidation if the payment period is to be increased substantially.

Co-signer

A signer other than the borrower who agrees to assume responsibility for repayment in the event that the borrower fails to repay. Guaranty agencies or lenders may require co-signers, but federal regulations do not.

Cost of Attendance

(also known as Cost of Education or Student Budget)
The student's cost of attendance includes not only tuition and fees, but also a standard allocation designed to cover reasonable living expenses while attending school. The cost of attendance is determined by the school using guidelines established by federal regulations.