Federal Loan Program

students in class

Educational loans are designed to help students by providing loan funds at reasonable interest rates with extended repaymant plans. The Federal Loan Program at Chaminade University consists of the following different loans:

Federal Loan Interest Rates
Undergraduate Subsidized: 3.4%
Graduate Unsubsidized: 6.8%
Parent PLUS Loan: 7.9%
Grad PLUS Loan: 7.9%

Federal Direct Loans

These loans are insured by the federal government.  To be eligible for the Direct Loans, you must be a U.S. citizen or eligible non-citizen; have a high school diploma or its equivalent; and attend an eligible post secondary school at least half time.  The two types of Direct Loans are as follows:

Type Qualifications/Features
Subsidized
  • Based on financial need
  • The federal government pays the interest on the loan while the student is in school, during a six-month grace period, and during times when you qualify for an authorized deferment.
Unsubsidized
  • Non-need based loan for students who do not qualify for a subsidized loan or who do not qualify for the full annual limit of a subsidized loan.
  • The student is responsible for the interest that accumulates on the loan.
  • The student has the option to pay the interest while in school or to defer it, capitalizing on the principal of the loan.

Annual Federal Direct Loan Limits

Year in School No. of credits needed Dependent Student
Independent Student or PLUS Denial Students
Freshman  Up to 30 credits 5,500 9,500 only 3,500 can be subsidized
Sophomore  31-59 credits 6,500 10,500 only 4,500 can be subsidized
Junior  60-89 credits 7,500 12,500 only 5,500 can be subsidized
Senior/
Rise Program
90 or more credits 7,500 12,500 only 5,500 can be subsidized
Graduate n/a n/a 20,500 all unsubsidized

Lifetime Federal Direct Loan Limits

Type of Student Maximum Amount
Dependent Undergraduate   31,000 (No more than $23,000 of which may be subsidized)
Independent Undergraduate   57,500 (No more than $23,000 of which may be subsidized)
Graduate Student 138,500 (All unsubsidized)

Repayment of Federal Stafford Loans are required 6 months after a student withdraws, drops below half time status, or graduates from school (ceases to be enrolled or maintain continued enrollment).  The usual loan repayment and amortization is for 10 years, but can be consolidated or arranged for a longer period of time.

Federal Direct PLUS Loans

The Federal Direct PLUS Loan Program is a federally insured loan that a parent borrower may be eligible for if the student is a dependent undergraduate student; the student is enrolled in school at least half time; and the parent borrower and student are U.S. citizens or eligible non-citizens.

The parent borrower applying for the loan if responsible for repaying the loan 60 days after the last disbursement (fully disbursed) in an award year.  The repayment and amortization of the loan is usually for 10 years.  The PLUS loan is a non-need based loan and can be borrowed up to the cost of a students education minus other financial aid.  PLUS loans are credit worthy loans and require the parent borrower to qualify under credit check.

There are no annual or lifetime loan limits for a PLUS loan.

Federal Direct Grad PLUS Loans

Federal Graduate PLUS loans are available for graduate and professional students to borrow. Similar to the Parent PLUS loan for parents of dependent undergraduate students, the Graduate PLUS loan is an unsubsidized federally guaranteed education loan with no annual or aggregate limits. It has no grace period and it goes into repayment as soon as the funds are disbursed to the borrower. It has the same deferment and forbearance options as the federal direct loan program. As such, graduate and professional students can postpone repayment using in-school deferment while enrolled at least half-time in a degree or certificate program of study.

Interest rates on Federal PLUS loans are fixed at 7.9%. Many lenders offer borrower benefits to reduce this interest rate during repayment. During any period of deferment or forbearance, interest can accrue and be added to the principal loan balance (capitalized) at the end of the deferment or forbearance period if it is not paid by the borrower as it accrues. There is also a 3.0% origination fee attached to the loan that, due to regulations, cannot be paid by the lender on the borrower's behalf.

Eligibility for PLUS loans require the applicant to (1) be a U.S. citizen/national or eligible non-citizen with a valid Social Security number, (2) pass a credit review and not have adverse credit history as defined by regulation (see credit criteria below), and (3) not be in default on any federal education loan or owe a refund on a federal education grant.

To get a PLUS loan, the applicant cannot have adverse credit based on the review of at least one credit report from a national credit reporting agency. Lack of a credit history or insufficient credit history is not considered adverse credit. Current regulations define adverse credit as when at least one of the following applies to the applicant:

  • currently 90 days or more delinquent on repayment of any debt;
  • has had debt discharged in bankruptcy during the past five years; or
  • evidence of a default, foreclosure, tax lien, repossession, wage garnishment, or write-off of a Title IV debt during the past five years.

If the applicant has adverse credit, he or she can provide an endorser (cosigner) who does not have adverse credit to get a PLUS loan.

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