HESC mails out the promissory notes to students, and forwards them to the bank. Interest Interest is the amount charged to the borrower for the privilege of using the lender's money. Interest is usually calculated as a percentage of the principal balance of the loan. The percentage rate may be fixed for the life of the loan, or it may be variable, depending on the terms of the loan. The principal is the amount of money borrowed or remaining unpaid on a loan.
Interest is charged as a percentage of the principal amount.
Insurance and origination fees will be deducted from this amount before disbursement. The legal and binding contract signed between the lender and the borrower, which states that the borrower will repay the loan as agreed upon in the terms of the contract. Scholarship A scholarship is an award that does not usually have to be paid back, and is usually awarded to students who demonstrate or show promise of high achievement in an area such as academics, athletics, music, art or other disciplines. Servicer An organization that acts on behalf of the lender to administer their student loan portfolio and is paid a fee to do so. The SAR notifies the student of his eligibility for federal student aid.