Glossary beginning with U

u
Unearned Income

Interest income, dividend income, and capital gains.

Unmet Need

The FAO may provide the student with less than the student's need (as determined by the FAO). This gap is known as the unmet need.

Unsecured Loan

An unsecured loan is not backed by collateral, and hence represents greater risk to the lender. The lender may require a co-signer on the loan to reduce their risk. If you default on the loan, the co-signer will be held responsible for repayment. Most educational loans are unsecured loans. In the case of federal student loans, the federal government guarantees repayment of the loans. Other examples of unsecured loans include credit card charges and personal lines of credit.

Unsubsidized Loan

An unsubsidized loan is a loan for which the government does not pay the interest. The borrower is responsible for the interest on an unsubsidized loan from the date the loan is disbursed, even while the student is still in school. Students may avoid paying the interest while they are in school by capitalizing the interest, which increases the loan amount. Unsubsidized loans are not based on financial need and may be used to finance the family contribution.

Untaxed Income

Contributions to IRAs, Keoghs, tax-sheltered annuities, and 401k plans, as well as worker's compensation and welfare benefits.

US Department of Education (ED)

The US Department of Education administers several federal student financial aid programs, including the Federal Pell Grant, the Federal Work-Study Program, the Federal Perkins Loans, the Federal Stafford Loans, and the Federal PLUS Loans.