Educational Loans Explained for Hawaii Residents

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 begins 9 months after student ceases to be enrolled for at least 6 credits. If you qualify, you will be notified about required documents.

Federal PLUS Loan (PLUS)
A federal loan from a private lender for parents of dependent students. Interest rate is variable and repayment begins 60 days after the loan is disbursed. The student must be enrolled for at least 6 credits.

For more information, see "Federal PLUS Loan Program" under the Related Links section.

State Higher Education Loan (SHEL)
Must be a bonafide resident of Hawaii. A state loan with an annual simple interest rate of 5%. Interest 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 Stafford Loan (SUB)
A federal need-based student loan from a private lender with the interest subsidized by the federal government while the student is enrolled in school at least half-time. The interest rate on the Subsidized Stafford loans is as follows:

Loans disbursed on or after these dates

Interest Rate

July 1, 2008

6.0%

July 1, 2006

6.8%

Prior to July 1, 2006

Variable not to exceed 8.25%

Repayment begins six months after the student ceases to be enrolled at least half-time. Students must complete and file a FAFSA, complete a Stafford Entrance interview, Stafford Loan Request Form, and a Master Promissory Note online.

For more information, see "Federal Stafford Loan Program" under the Related Links section..

Unsubsidized Federal Stafford Loan (UNSUB)
A federal non-need based student loan from a private lender 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. The interest rate on Unsubsidized Stafford Loans is as follows:

Loans disbursed on or after these dates

Interest Rate

July 1, 2006

6.8%

Prior to July 1, 2006

Variable not to exceed 8.25%

Repayment begins six months after the student ceases to be enrolled at least half-time. Students must complete and file a FAFSA, complete a Stafford Entrance interview, Stafford Loan Request Form, and a Master Promissory Note online.

For more information, see "Federal Stafford Loan Program" under the Related Links section.

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 regardingAlternative Student Loans, please contact your lender directly.