The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. All new Federal Stafford and PLUS loans use variable interest rates that are tied to the rates for federal treasury bills. Lender The bank or lending institution that provides the money to the borrower for the loan. The origination fee is an up front charge deducted from the loan to pay part of the loan's administrative costs. Principal Principal is the amount of money borrowed under the loan.
Interest is charged as a percentage of the principal.
A promissory note is the binding legal document signed by the student borrower before the lender disburses loan funds. The promissory note states the terms and conditions of the loan, including repayment schedule, interest rate, deferment policy, and cancellations. The student should keep this document until the loan has been repaid. Parents may borrow up to the full cost of their children's education, less the amount of any other financial aid received. Typically the CCRI financial aid applicant will find other, more attractive loan methods to finance their education.