SAP - See Satisfactory Academic Progress

SAR - See Student Aid Report

SAY - See Scheduled Academic Year

Satisfactory Academic Progress (SAP) - The level of academic progress required of a student by the Higher Education Act in order to receive Title IV aid, including Federal Stafford, PLUS, or SLS loans. Each school must establish a standard for evaluating a student's efforts to achieve an educational goal within a given period of time. In making this evaluation, the school must establish the normal time frame for completion of the course of study in which the student is enrolled, and a method, such as grades or work projects completed, to measure the quality of the student's performance. Students who exceed one and a half times the normal time required to complete their academic program are not eligible for additional Title IV assistance for that period that is in excess of 150% of the academic period normally required.

Satisfactory Repayment Arrangement - A specified number of consecutive, on-time, voluntary, reasonable and affordable full monthly payments made by a borrower to the holder of any loan or loans in default. The borrower may make three such payments to become eligible to consolidate a defaulted loan. The borrower must make six such payments to regain eligibility for Title IV financial aid programs, and may regain eligibility under reinstatement provisions only once. The borrower must make 12 such payments to rehabilitate a defaulted loan.

Scheduled Academic Year (SAY) - The "fixed" academic period, as advertised in a school's printed materials, that generally begins and ends at the same time each year according to an established schedule. The SAY is the academic period to which the statutory definition of an Academic Year must be applied. Non-term-based institutions may not use an SAY. The summer term may be treated as an add-on at the beginning (leader) or end (trailer) of the SAY. For further discussion, See "Principles to Determine the Frequency for Annual Loan Limits" in the appendix to chapter 10 of The Federal Student Financial Aid Handbook.

School - A term in this manual that is used interchangeably with "Institution."

School as Lender - A school, other than a correspondence school, that has been approved as a lender under the FFELP and has entered into a contract of guarantee with the Department of Education or a similar agreement with a guarantor.

Secondary Market - An entity that purchases education loans from eligible lenders in order to increase the amount of funds available for education loans. The secondary market obtains funds from investors and uses those funds to purchase existing education loans from lenders. The lenders then use the proceeds of those sales to make new education loans.

Secured Debt - A secured debt is secured by collateral that a lender can take from you if you do not pay. Car loans and mortgages are secure debts as they are secured by items themselves.

Separation Date - The date the student ceases to be enrolled on at least a half-time basis at an eligible school.

Servicer (or Third-Party Servicer) - An entity that enters into a contract with a program participant to administer any aspect of its participation in a Title IV program.

Shortage Area - See Teacher Shortage Area

Shortsale - Selling a property for less that what is owed on it is called a shortsale. The sale may also violate a prepayment penalty or other terms with the bank. Such a sale should only be made if the seller is in distress and the bank gives permission beforehand.

Skip Tracing - Diligent efforts to locate a borrower's telephone number or address when such information is unknown. See also Normal Commercial Skip Tracing.

SLS - Supplemental Loan for Students. This loan program ended in 1992.

Social Security Number (SSN) - The 9-digit number assigned to the borrower by the Social Security Administration. The SSN is used as an identifier for tracking the borrower's loan account(s), skip tracing, and reporting to the Department of Education. A borrower must have an SSN in order to apply for a FFELP loan.

Special Allowance - A percentage of the daily average unpaid principal balance, paid to a lender by the Department of Education on an eligible Stafford, PLUS, SLS, or Federal Consolidation loan. Special allowance payments act as an incentive for lenders to make education loans by, in effect, making up the difference between the interest rate charged to a FFELP borrower and market interest rates. The special allowance rate is set by statutory formula.

Special Occurrence - An event-such as the lender's receipt of a borrower's correct address and/or correct telephone number-that affects the lender's due diligence requirements but does not change the payment due date of the loan.

SSN - See Social Security Number.

Standard Repayment Schedule - A repayment schedule under which the borrower pays the same amount for each installment payment throughout the entire repayment period or pays an amount that is adjusted to reflect annual changes in the loan's variable interest rate. The Standard Repayment Schedule cannot exceed 10 years, excluding in-school, grace, deferment, or forbearance periods.

State - A state of the Union, the District of Columbia, the Commonwealth of Puerto Rico, American Samoa, Guam, the Trust Territory of the Pacific Islands, the Virgin Islands, and the Commonwealth of the Northern Mariana Islands.

State Lender - In any state, a single state agency or private not-for-profit agency designated by the state that has been approved as a lender and that has entered into a contract of guarantee with the Department of Education or a similar agreement with a guarantor.

Statement of Educational Purpose - The borrower's signed statement that any Title IV aid received will be used only for education-related expenses at the school at which the student is enrolled or accepted for enrollment.

Statute of Limitations - Most debts are subject to statute’s of limitations as designated by state laws. Once this statute has passed a collection agency can not sue you for the debt, though they can still call you. Debts such as student loans, child support, and tax liens are not subject to statues. There is also a statue of limitation for credit reporting, which for most items is 7 years. That is, after 7 years from the date of last activity, items should drop off of your credit report.

Statutory Interest Rate - The maximum annual interest rate (under the Higher Education Act) that a lender may charge on a loan.

Student Aid Report (SAR) - The student's need analysis report, which is generated by the Department of Education's central processing system or MDE processor. The SAR summarizes information that the student reported on the FAFSA. An electronic version sent to the school is called an ISIR (Institutional Student Information Record).

Subprime Loan - A “subprime” loan is a loan designated for the majority of people who don’t have perfect credit. Having unpaid collections or judgements will usually cause a buyer to utilize a subprime loan. Subprime loans typically have higher interest than “A paper” loans. To avoid having a subprime loan you should consider debt settlement to clear up unpaid debts.

Subrogation - A transfer in the ownership of a defaulted FFELP loan from a guarantor to the Department of Education. Loans to be subrogated must meet criteria established by the Department of Education. Subrogation criteria may be revised annually by the Department.

Subsidized Loan - A loan eligible for interest benefits paid by the federal government. The federal government pays the interest that accrues on subsidized loans during the student's in-school, grace, authorized deferment, and (if applicable) post-deferment grace periods, if the loan meets certain eligibility requirements.

Suspension - Suspension of the eligibility of a school, lender, or servicer to participate in a guarantor's programs for a specified period of time until specified requirements are met.