Academic years vary from school to school. Amortization refers to loan repayment over a period of time. Periodic payments are made on principal and interest.
Compounded interest is interest paid on the loan's principal balance and on any unpaid interest.
Defaulted loans are reported to national credit bureaus, tax refunds may be confiscated, paychecks may be garnished, and eligibility for future Federal or State financial aid is forfeited. Student must apply for a deferment with lender or servicer. Delinquent loan payments are reported to credit agencies. After that, the student receives any excess funds by cash or check, or it is applied to the student's account. EFC depends on dependency status, family size, other family members in school, taxable and nontaxable income, access to parents' assets, and other factors.