4303 Diamond Head Road `Ilima 102
Honolulu, Hawai’i 96816-4421
Telephone: (808) 734-9537
Facsimile: (808) 734-9896
Email: kapfao@hawaii.edu
Website: www.kapiolani.hawaii.edu
04/2020 An Equal Opportunity/Affirmative Action Institution
Kekaulike Center
Financial Aid
SUMMER 2020
Federal Direct Stafford Loan Information
Federal Direct Stafford Loans are low-interest, long-term
loans, from the U.S. Department of Education created to
help pay for education.
This is a loan that must be repaid.
Visit: https://studentaid.gov
for loan details.
Repayment begins six (6) months (grace period) after
you cease to be enrolled at least half-time (less than 6
credits), graduate, completely withdraw, transfer, or stop
attending classes. Minimum monthly payment is $50 (or
more depending on your total loan indebtedness) and you
have up to 10 years to repay the loan.
Loan Charges: These loans are subject to a loan fee
not to exceed 1.059% of your loan, which will be
automatically deducted from each loan disbursement.
Disbursements: First-year freshmen with no prior
Federal Stafford Loans are required to complete 30 days
of their first semester of enrollment before receiving their
first loan disbursement.
Federal Direct Stafford Loans require at least two (2)
separate disbursements, one at the beginning of the loan
period and the second at least halfway through the loan
period. Summer loans will not be disbursed until at least
half-time attendance has started.
Interest Rate: 4.53% (effective to 07/01/2019 – 06/30/2020)
The interest rate is variable/fixed. Each year the interest
rate will be calculated using the 10-year U.S. Treasury Bill
+ 2.05% not to exceed 8.25%. The calculated interest
rate will then be fixed for the life of the loan.
The Master Promissory Note
All students must complete a Master Promissory Note
(MPN) at https://studentaid.gov confirming to the U.S.
Department of Education that you will repay the funds that
you borrow.
Required Entrance Counseling
All students must complete Entrance Counseling at
https://studentaid.gov. The Counseling will give you the
tools to be a responsible loan borrower.
There are two types of Federal Direct Stafford Loans:
SUBSIDIZED: This loan is awarded to students who
demonstrate financial need. Interest is paid by the
federal government while you are enrolled at least
half-time (6 or more credits).
UNSUBSIDIZED: This loan is typically awarded to
students who do not demonstrate financial need or it may
be used to supplement a Subsidized Stafford Loan. You
are responsible for interest that accrues on the loan, which
starts after the loan is disbursed.
Time Limitation on Direct Subsidized Loan Eligibility
for First-Time Borrowers
You may not receive Federal Direct SUBSIDIZED Stafford
loans for more than 150% of your program length.
Additionally, if you continuously enroll and do not
complete your program you can lose the interest subsidy
on your prior Federal Direct SUBSIDIZED loan for the
remaining life of the loan.
Example: Student A is enrolled in an AA –Liberal Arts program
which is a 2 year or 4 semester program. Student has 3 years
(or 6 semesters) to obtain degree or transfer to a 4 year
program.
Student obtains Federal Direct SUBSIDIZED loans for 3 years
and continuously enrolls after 3 years (does not graduate from
AA program or transfer to a 4 year program).
1) Student loses Federal Direct SUBSIDIZED Stafford
loan eligibility for the 7
th
semester
2) Student loses interest subsidy on prior loans
obtained starting the 7
th
semester. That means
you are responsible for the interest even if you
continuously enroll.
