Federal Direct Stafford Loan Program Information

Federal Direct Stafford loans are available to classified students who are enrolled at least half-time (6 credits) to help pay the cost of their educational expenses. Students may be eligible to receive subsidized and unsubsidized loans based on their financial need.

There are two types of Federal Direct Stafford loans


Awarded to students who demonstrate financial need as determined by the Financial Aid Office.  Interest is paid by the U.S. Department of Education while you are enrolled at least half-time, for the first six months after you leave school (grace period) and during any approved deferment periods.

Effective for first-time borrowers on or after July 1, 2013 there is a time limit on the maximum period of time (measured in academic years) you can receive Federal Direct Subsidized Stafford loans (the time limit does not apply to Direct Unsubsidized Loans or Direct PLUS 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) and you are no longer eligible to receive additional Direct Subsidized loans. However, you may continue to receive Direct Unsubsidized loans.

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

Be aware of this restriction and have an academic plan to ensure you meet your program requirements before you meet your maximum eligibility period. The highest degree Kapi‘olani CC offers is an Associate degree. If you plan to transfer to obtain your Bachelor’s degree you want to ensure you do it within this timeframe. Also, if you initially enroll in an Associate degree then change to a Certificate program (less than 2-year programs) you may lose interest subsidy and/or future Direct Subsidized loan eligibility.


Typically awarded to students who do not demonstrate financial need or may be used to supplement a Federal Direct Subsidized Stafford loan.  You are responsible for interest that accrues on the loan, which starts after the loan is disbursed. Although principal payments can be postponed; interest will be capitalized, meaning the servicer will add the accrued interest to the principal balance you owe.

Interest Rate

** Effective July 1, 2013 the interest rate on Federal Direct SUBSIDIZED and UNSUBSIDIZED Stafford Loans are variable/fixed rates. 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.

School Year (July 1 – June 30) Interest Rate
2019-20 4.53%
2018-19 5.05%
2017-18 4.45%

Loan Fees

There is a loan fee on all Direct Subsidized and Direct Unsubsidized Loans. The loan fee is a percentage of the loan amount and is proportionately deducted from each loan disbursement. The percentage varies depending on when the loan is first disbursed.

  • 1.059% deducted proportionately from each loan disbursement effective for loans first disbursed 10/01/19 – 09/30/20
  • 1.062% deducted proportionately from each loan disbursement effective for loans first disbursed 10/01/18 – 09/30/19

The fee goes to the government to help reduce the cost of the loans. Repayment begins six months from the date of graduation, withdrawal, or enrollment of less than half-time. There is no prepayment penalty.

The Master Promissory Note

If you accept a Federal Direct Stafford Loan, you must complete a Master Promissory Note (MPN) confirming that you will repay funds that you borrow under this loan program. The Master Promissory note can be completed at https://studentloans.gov.

The first year you borrow at Kapi‘olani CC, you will need to complete the MPN. The MPN covers all Federal Direct Stafford loans borrowed and continue to borrow. The MPN eliminates the need to complete a promissory note every year to receive additional loans (in most cases). You will confirm the amount of loan funds requested for each academic year through acceptance of the Federal Direct Stafford Loans within your Financial Aid Offer (https://myuh.hawaii.edu).

Entrance Counseling:

All students are required to know the terms of the Federal Direct Stafford Loan program. The entrance counseling requirement assists students in learning and understanding their rights, responsibilities, loan repayment, terms, etc. The Loan Counseling is required and can be completed at https://studentloans.gov.

Annual Loan Limits

Class Level Dependent Student Independent Student
Base Stafford Loan Eligibility
(Subsidized and Unsubsidized)
$ 3,500 $ 3,500
Additional Unsubsidized Stafford Loan Eligibility $ 2,000 $ 6,000
Maximum Freshmen Eligibility $ 5,500 $ 9,500
Base Stafford Loan Eligibility
(Subsidized and Unsubsidized)
$ 4,500 $ 4,500
Additional Unsubsidized Stafford Loan Eligibility $ 2,000 $ 6,000
Maximum Sophomore Eligibility $ 6,500 $ 10,500


Apply for a Federal Stafford Loan

If you are interested in borrowing a Federal Direct Stafford Loan, you will need to go online to complete the following steps:

  1. File the FAFSA at www.fafsa.gov
  2. Complete the Federal Direct Stafford Loan Entrance Counseling at StudentLoans.gov
  3. Complete the Federal Direct Stafford Loan Master Promissory Note at StudentLoans.gov
  4. Accept your loan(s) in your MYUH portal.

Kapi‘olani Community College x