Federal Direct Loans

What are Federal Direct Loans?
Direct Loans are loans borrowed directly from the federal government, based on the information provided on the FAFSA. No separate application from a bank or other lender is needed to receive Direct Stafford Loans. Please disregard any separate mailings you receive to apply for Stafford Loans.

Federal Direct Stafford Loans are for undergraduate, graduate, professional degree students and parents of dependent students enrolled at least half-time, who meet the general requirements to receive federal aid.

Applying for a Federal Direct Loan
When students complete the Free Application for Federal Student Aid (FAFSA), they are applying for all of the aid programs for which they may be eligible, including direct loans.

If a William D. Ford Federal Direct Stafford Loan (subsidized or unsubsidized) has been offered to you as part of your aid package it will appear on your Financial Aid Award Letter. You can accept or decline these loans just as you would any other aid program assistance offered to you. 

To accept Federal Direct Loans, you must first accept the loan(s) on your award response form, then complete the Federal Stafford Loan Master Promissory Note and Stafford Online Entrance Counseling. Instructions for completing the Stafford Online Entrance Counseling can be found by clicking here and the instructions for the Master Promissory Note can be found by clicking here

Interest Rates
All new loans disbursed under the William D. Ford Federal Direct Loan Program have fixed interest rate.

  • Direct Subsidized Loans (Undergraduate Students) - Fixed at 2.75%
  • Direct Unsubsidized Loans (Undergraduate Students) - Fixed at 4.75%
  • Direct Unsubsidized Loans (Graduate or Professional Students) - Fixed at 5.30%
  • Direct PLUS Loans (Parents and Graduate or Professional Students) - Fixed at 5.30%

Loan Repayment
Loan repayment begins six months after you leave school or cease to be enrolled in coursework at least a half-time basis. These six months are referred to as a grace period. The federal government offers various loan repayment options listed below.

  • The standard loan repayment plan requires fixed monthly repayment amount paid over a fixed period of time.
  • The extended repayment plan assumes a fixed annual repayment amount paid over an extended period of time.
  • The graduated repayment plan establishes annual repayment amounts at two or more levels. Payments are paid over a fixed or extended period of time.
  • The income contingent repayment plan calls for varying annual repayment amounts based on the Adjusted Gross Income (AGI) of the borrower over an extended period of time, as determined by the U.S. Department of Education.

Default on federal student loans can result in the following consequences:

  • Bad credit
  • Ineligibility for future financial aid
  • Garnishment of wages
  • The Federal Government can take your tax return

Contact your servicer to discuss alternate repayment options, deferments, or a forbearance.



Federal Direct PLUS Loan

The Federal Direct PLUS Loan is available to parents of dependent students. The maximum amount that may be borrowed is calculated by subtracting other aid from the cost of attendance. PLUS Loan borrowers are subject to a credit check to determine creditworthiness. An origination fee is deducted from the loan amount; therefore, you may wish to increase your parent loan to accommodate this fee. You may call us for assistance in determining a PLUS loan amount. For more information regarding the Federal Direct PLUS Loan, click here.

Steps to Applying

Complete the Parent PLUS Application at studentaid.gov
Sign your Master Promissory Note (MPN).
PLUS Loan Instructions 

Private Loans

Private or alternative loans are unsecured, credit-based loans that are not guaranteed by the federal government. We have carefully considered our selections in order to provide you with the best possible list of suggested lenders. Chowan University does not endorse any particular lender and you are free to choose a lender that is not listed. Please borrow conservatively.

Regulations require that private loan lenders obtain a self-certification signed by the loan applicant before disbursing a private loan. The Self-Certification Form can be accessed by clicking here. The borrower must complete the Self-Certification Form (which is provided by the lender as part of the application process) and return it to the lender (do not send it to Chowan University). The intent of the form is to inform the borrower of other borrowing options which may offer better terms and conditions; and that the borrower is aware of the amount of educational costs. If you need assistance with completing the form, please call us at 252-398-6535.

We recommend these lenders based on the quality of products and services they provide to Chowan University students and families. We have carefully considered our selections in order to provide you with the best possible list of suggested lenders. However, if you wish to use another lender that is not on this list, you have the right to do so.

For a list of private loan lenders please visit www.elmselect.com.

Self-Certification Form

What If I cannot make my payments?

If, for some extraordinary reason such as illness or unemployment, you cannot meet the terms of your repayment agreement, you should contact your servicer about the following options:

Forbearance is an agreement between a borrower and the lender/servicer to temporarily postpone payments, extend the timeframe for making monthly payments, or reduce the amount of monthly payments on a short-term basis.
Deferment is a period of time during which payments are postponed. Deferments usually require documentation. There are different types of deferment for which borrowers can apply, such as in-school deferments or unemployment deferments.

It is important to maintain contact with your servicer if you cannot make your payments. Serious consequences can occur for failure to make payment on your loan.