Educational Loans

Educational loans require repayment, but the terms tend to be more favorable than for commercial loans. You (and your parents if you are a dependent student) have access to a variety of programs. Federal loans allow the deferment of at least principal payments until your enrollment status is less than half-time or ceases altogether.

Federal Perkins Loan (PERK)

A federal loan with an annual simple interest rate of 5%. Interest and repayment begins 9 months after student ceases to be enrolled for at least 6 credits. If you qualify, you will be notified about required documents.

State Higher Education Loan (SHEL)

Must be a bonafide resident of Hawai‘i. A state loan with an annual simple interest rate of 5%. Interest and repayment begins 9 months after the student ceases to be enrolled for at least 6 credits. If you qualify, you will be notified about required documents.

Subsidized Federal Direct Stafford Loan

A federal need-based student loan with the interest subsidized by the federal government while the student is enrolled in school at least half-time (6 or more credits) and during approved deferment periods. Repayment begins six months after the student ceases to be enrolled at least half-time. There is a time limit on the maximum period of time you can receive Federal Direct Subsidized Stafford loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the published length of your program. This is called your “maximum eligibility period”. If you continuously enroll and do not complete your program (or you transfer to a program of equal or less length) you can lose the interest subsidy on your Federal Direct Subsidized loan(s) for the remaining life of the loan(s).

Please refer to Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers on or after July 1, 2013 and visit the studentloans.gov site for detailed information.

The interest rate on the Federal Direct Subsidized Stafford loan is variable/fixed . Each year the interest rate will be calculated based on the 10-year US Treasury-Bill + 2.05% capped at 8.25%. Once calculated it will be fixed for the life of that loan.

To apply, students must file a FAFSA, complete Entrance Counseling and Master Promissory Note at the studentloans.gov site, and accept loans offered.

For more information, see “Federal Direct Stafford Loan Program”.

Unsubsidized Federal Direct Stafford Loan

A federal non-need based student loan with interest that is not subsidized by the federal government while the student is in school at least half-time. Interest starts accruing upon disbursement of the loan funds. Repayment begins six months after the student ceases to be enrolled at least half-time.
The interest rate on the Federal Direct Unsubsidized Stafford loans is variable/fixed . Each year the interest rate will be calculated based on the 10-year US Treasury-Bill + 2.05% capped at 8.25%. Once calculated it will be fixed for the life of that loan.

To apply, students must file a FAFSA, complete Entrance Counseling and Master Promissory Note at the studentloans.gov site, and accept loans offered.

For more information, see “Federal Direct Stafford Loan Program”.

Federal Direct PLUS Loan (PLUS)

A federal loan for parents of dependent students. Interest rate is variable/fixed rates. Each year the index rate is determined as the “high yield of the 10-year Treasury note” auctioned at the final auction held prior to the June 1 preceding the July 1 of the year for which the rate will be effective + 4.60% capped at 8.25%. Once calculated it will be fixed for the life of that loan. Example: Effective 07/01/2014 the index rate is 2.612% + 4.60% = 7.21% and it will be fixed. Any new loans may have a different interest rate and will be fixed for the life of that loan. Repayment begins 60 days after the loan is disbursed. The student must be enrolled for at least 6 credits.

For more information, see “Federal Direct PLUS Loan Program“.

Alternative Loans

Alternative or Private loans are another option to consider for financing education. Alternative/Private loans are designed to help students with educational expenses that exceed other financial aid such as grants, scholarships, work study and federal loans. FAFSA is not required. Alternative loans are credit based; therefore, a co-signer may be needed.

For detailed information regarding Alternative Student Loans, please contact your lender or financial institution directly.

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