The state or nonprofit agency that insures student loans for lenders and administers the student loan insurance program for the federal government. Holder The institution that holds the title to the loan. It can be the lender or a secondary market. A loan repayment plan designed so that loan payments increase with the borrower's income. The fee charged by the lender for use of the borrowed money.
Interest is calculated as a percentage of the amount borrowed.
Lender The institution that provides the loan to the borrower, such as a bank, savings and loan, or credit union. The amount of money borrowed from the lender. A fee charged of borrowers and passed along to the federal government to help reduce the government's cost of subsidizing low-interest student loans. Prepayment Paying back a portion or the entire amount of loan principal before it is due. This reduces interest charges.