What are loans?

Loans are a form of financial aid that must be repaid by the borrower. There are two types of Federal Loans: Direct Subsidized and/or Unsubsidized Loans, taken out by the student, and Direct PLUS Loans, taken out by the parent. 

Who is eligible?

In general, to receive a Federal Direct Loan, a student must:

  • be accepted to Christopher Newport University as a classified, degree-seeking student.
  • be enrolled at CNU on at least a half-time basis, meaning 6 credit hours.
  • make Satisfactory Academic Progress.
  • be a US citizen, permanent resident of the United States or its trust territories, or an eligible non-citizen.
  • not be in default on any student loan, or owe a refund on financial aid received while attending any institution.
  • have a valid Social Security Number.
  • be registered with the Selective Service if required.

How do I apply?

To receive a direct loan, students must follow these procedures:

  • Complete the Free Application for Federal Student Aid (FAFSA)   Students are encouraged to meet our Priority Consideration Date of March 1.
  • Upon receipt of your Financial Aid Award Letter, accept your loan awards by checking accept in the appropriate column, signing and returning your Award Letter to the financial aid office.
  • Complete the Entrance Counseling and Master Promissory Note (MPN) on line if you are a first time borrower at CNU. The MPN will provide you with the details of your loan, and is a legal, binding document.

To receive a parent loan, students and their parents must follow these procedures:

  • Complete the Free Application for Federal Student Aid (FAFSA) Students are encouraged to meet our Priority Consideration Date of March 1.
  • Complete a Parent PLUS loan application, credit check and Master Promissory Note(MPN) online at studentloans.gov Parents must demonstrate credit-worthiness to receive a PLUS loan.  If a parent is denied a PLUS loan due to adverse credit, students may borrow additional funds.  Families in this situation should contact our office.

 

What loans are available for students?

Federal Direct Subsidized Loans are available to students who, in addition to the criteria listed in Loan Process, demonstrate financial need. Under the Subsidized Stafford Loan program, interest is not charged on the loan:

  • during periods of at least half-time enrollment.
  • during grace periods.
  • during periods of deferment.
Federal Direct Unsubsidized Loans are available to students who meet the criteria listed in Loan Process. Unlike the Subsidized Stafford Loan, interest on the Unsubsidized Stafford Loan begins from the date the loan is disbursed until it is paid in full.

What is the interest rate?

The current interest for both Subsidized and Unsubsidized Direct Student Loans are 3.86%; however, this rate generally changes on July 1st.

How much can I borrow?

The amount a student can borrow is based on their year in school and dependency status, as determined by the FAFSA. There is also an overall limit based on the student's cost of education.

Dependent Students Independent Students
Freshmen (0 - 29 credits) $5,500 $9,500
Sophomore (30 - 59 credits) $6,500 $10,500
Junior (60 - 89 credits) $7,500 $12,500
Senior (90+ credits) $7,500 $12,500
Graduate N/A $20,500

*Note that for freshmen, only $3,500 may be subsidized; for sophomores $4,500; for juniors and seniors $5,500.  Graduate students are not eligible for subsidized direct loans.

The Department of Education also limits the total debt you may have outstanding. The maximum amount of combined loans a student may have is:

  • $31,000 as a dependent undergraduate student, only $23,000 of which may be subsidized.
  • $57,500 as an independent undergraduate student, only $23,000 of which may be subsidized.
  • $138,500 as a graduate or professional student, only $65,500 of which may be subsidized. This includes debt incurred as an undergraduate.

What is the PLUS loan?

The Federal PLUS loan is a loan parents can obtain for the dependent, undergraduate student(s). It is a credit-based loan in the parent's name and is intended to supplement the student's other financial aid resources. The PLUS loan is not based on financial need, but parents must demonstrate credit-worthiness to receive the loan.

How much can I borrow?

You can borrow up to the cost of education, minus any other aid or resources the student may have.

What is the interest rate?

The interest rate on the PLUS loan is fixed at 8.5%.

When do I repay the loan?

Repayment on the loan begins 60 days after the loan has been fully disbursed. For example, a parent who takes a loan for the fall and spring semesters will begin repayment around the middle of March.  There is no grace period for these loans, and interest begins as soon as CNU receives the first disbursement. Deferment and forbearance options may be available through the US Department of Education.

What if I have bad credit?

The PLUS does require credit worthiness, unlike Stafford Loans. When you complete the PLUS Request form, you are authorizing us to perform a credit check. This credit check is completed by the Department of Education, and we are not given the exact standards the Department uses in determining acceptable credit. If you are declined the PLUS due to adverse credit, your student may be able to borrow additional Unsubsidized Stafford Loan funds.  Families in such situations are encouraged to contact us.

The Department of Education requires that all new borrowers at an institution complete loan counseling before receiving their student loans. In addition, the Department also requires that students complete loan counseling before exiting the University.

Christopher Newport University takes Loan Counseling very seriously. We expect all students who are receiving loans to complete Loan Entrance Counseling on line at the Student Loans website.  Completing counseling at another institution does not waive the requirement for entrance counseling at CNU. Also, before graduating, students must complete the Loan Exit Counseling  on line as well.

The Loan Counseling will cover the following information:

  • rights and responsibilities as a student loan borrower
  • average monthly repayment amounts
  • the importance of creating a budget
  • repayment options
  • information on deferments
  • the consequences of default

Private Loans

Private loan programs are becoming more popular among students and parents as tuition costs rise.  In short, private loans, also referred to as alternative loans, are non-federal loans made to students to help cover the cost of tuition.  These loans are based on consumer credit and feature competitive interest rates.  Most students require a co-signer.  Students can borrow up to the cost of attendance less any financial aid received.

A variety of lenders participate in these loan programs.  When applying for a private loan, it is important to do your homework.
Each of these loan programs is different, and you want to be certain you are getting what is right for you.  Spend a few moments comparing interest rates, fees, repayment terms, and requirements.