Educational loans are designed to help students by providing loan funds at reasonable interest rates with extended repayment plans. The Federal Loan Program at Chaminade University consists of the following different loans:
|Federal Direct Undergraduate Subsidized||4.99%|
|Federal Direct Undergraduate Unsubsidized||4.99%|
|Federal Direct Graduate Unsubsidized||6.54%|
|Federal Direct Parent PLUS Loan||7.54%|
|Federal Direct Grad PLUS Loan||7.54%|
The interest rates above are for loans disbursed between July 1, 2022 and June 30, 2023. The interest rate is fixed for the life of the loan.
Federal Direct Loans
Unlike grants and scholarships, student loans must be repaid. Federal direct student loans have a fixed interest rate and are administered by the U.S. Department of Education. They can be subsidized—which means you won’t pay interest right away—or unsubsidized. First-year and incoming transfer students should file the FAFSA to determine their eligibility for federal student loans. The two types of direct loans are as follows:
- Based on financial need
- The federal government pays the interest on the loan while the student is in school and when qualifying for an authorized deferment.
- 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 Status||Number of Credits Needed||Dependent Students||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||$7,500||$12,500 (only $5,500 can be subsidized)|
|Senior||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
Repayment of Federal Stafford Loans are required six months after a student withdraws, drops below half-time status, or graduates from school (ceases to be enrolled or to maintain continued enrollment). The usual loan repayment and amortization is for 10 years, but it can be consolidated or arranged for a longer period of time.
|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)|
Federal Direct PLUS Loans
Federal Direct PLUS Loan program can help parents cover the costs of college. PLUS loans have a fixed interest rate, and are administered by the U.S. Department of Education. They’re available to parents of undergraduate students who are dependents.
To qualify, a student must file a FAFSA and the parent borrower must undergo a credit check. Loans are not need-based, but amounts are based on a student’s cost of attendance. 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 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:
- is currently 90 days or more delinquent on repayment of any debt;
- has had debt discharged in bankruptcy during the past five years; or
- evidence exists 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.