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Financial Aid

Loans

Loans are another method of paying for your college education. Loans are borrowed funds that must be repaid, often with accumulated inteerest and fees.

On this page:

Federal Direct Loans

Direct Loans are federal student loans provided by the U.S. Department of Education (ED) to help eligible students cover the cost of higher education. In order to receive these loans, you must meet all federal eligibility requirements as well as complete Loan Counseling and sign a Master Promissory Note . Many factors determine the amount of Direct Loan you can receive. These factors include dependency status, financial need, program level, class level and enrollment status. Annual and Aggregate Loan Limits also apply. Your initial Direct Loan offer will be based on the assumption of Full-Time enrollment.

Beginning with the 2026-27 Academic Year, your annual Direct Loans will be reduced based on your enrollment status for federal aid. This new process is called Schedule of Reductions (SOR). SOR applies to Federal Subsidized, Federal Unsubsidized and Federal Graduate PLUS Loans (if applicable). Students whose enrollment status is determined to be less-than-full-time, will have their federal loans reduced in proportion to their enrollment status for the Academic Year. If you plan on taking a less-than-full-time schedule, we encourage you to complete a Part-Time Enrollment Form so that the SOR adjustments can be made as soon as possible.

Direct Subsidized Loans

Direct Subsidized Loans are available to undergraduate students with financial need. The Financial Aid Office will determine the amount you can borrow, and that amount may not exceed your financial need.

  • The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
    • while you’re in school at least half-time
    • for the first six months after you leave school (referred to as a grace period), and
    • during periods of deferment (postponement of loan payments).
      Repayment begins six months after a student graduates, leaves school or drops below half-time enrollment.

Direct Unsubsidized Loans

Direct Unsubsidized Loans are available to undergraduate and graduate or professional students and there is no requirement to demonstrate financial need. The Financial Aid Office will determine the amount you can borrow based on your cost of attendance and other financial aid you receive.

  • You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
  • If you choose not to pay the interest while you are in school and during grace periods and deferment or forbearance periods, your interest will accrue (accumulate) and be capitalized (that is, your interest will be added to the principal amount of your loan). Repayment begins six months after a student graduates, leaves school or drops below half-time enrollment.

Direct PLUS Loans

Direct PLUS Loans are federal loans that graduate or professional degree students and parents of dependent undergraduate students can use to help pay any education expenses not covered by other financial aid. Applications for these loans are subject to credit approval. The maximum loan amount is the student’s cost of attendance (determined by the school) minus any other financial aid received. *Graduate and professional students who do not qualify (or no longer qualify) for the limited exception on or after July 1, 2026, are not eligible to borrow Direct PLUS Loans.

Federal Loan Interest Rates, Origination Fees, Repayment and Avoiding Default

If you receive a federal student loan, you will be charged an origination fee and be required to repay that loan with interest. Make sure you understand how interest is calculated and the fees associated with your loan. Both of these factors will impact the amount you will be required to repay. For current interest rates, fees and tips on repayment and avoiding default, visit studentaid.gov .

Private Student Loans

Private education loans are non-federal loans available from private lenders for students whose cost of attendance has not been met with other financial aid. Before considering and applying for private education loans, students should submit a Free Application for Federal Student Aid (FAFSA) and utilize all available grants, scholarships, and federal student loan options. UH Hilo Financial Aid Office will not process a Private/Alternative loan certification request until a FAFSA is completed. If you choose not to complete a FAFSA, you must notify the office that you will not pursue Federal Financial Aid.

We encourage students and families to explore specific loan terms and compare before applying for any loan. Look at interest rates, fees, repayment terms, creditworthiness requirements, satisfactory academic progress requirements, etc. You may use the ELM Select Comparison Tool to assist in comparing various lender options.