Student Loans FAQs

What's the difference between federal student loans and private student loans?

Federal student loans follow guidelines set forth by the U.S. Department of Education and typically offer fixed and lower interest rates and more repayment options compared to private student loans. However, federal loans have borrowing limits, which may not allow a student to borrow enough to cover the entire cost of education. Private loans help students fill the funding gap between the cost of attending school and the amount of federal loans, grants and available scholarships. Both private and federal student loans typically allow students to defer full principal and interest payments while in school, and some offer economic forbearance options once a student completes school. Unlike federal loan programs, private lenders assess the creditworthiness of the borrower and co-signer (if applicable) before making a loan.

What information do I need to apply?

Applicants will need to provide their:

• Social Security Number
• permanent address, phone number and email addresses
• basic information about their academic standing (when applying for a student loan)

Can I submit my application at a branch?

Applications can only be submitted online. If you need assistance, visit your local branch or speak with a student loan specialist at 1-877-304-9302, M-F, 8 am - 8 pm, ET.

Can you complete the application over the phone for me?

Our student loan specialists can answer questions at 1-877-304-9302, M-F, 8 am - 8 pm, ET, but the application must be completed online by the borrower.

Who applies for the student loan?

The student applies as the primary borrower, and parents, a family member or a friend with good credit can apply as a co-signer to potentially help get a lower rate and increase the chance of loan approval. 

What's the school-certified cost of attendance?

School-certified cost of attendance is the amount of money your school believes is required to attend their institution. It includes tuition, fees, room and board, and other education-related expenses. Your school's financial aid office can provide this figure for you. Keep in mind that private student loans are meant to bridge the gap between the cost of attendance and the funding you've received from federal student loans, scholarships and grants. Navy Federal requires that all credit-approved loans go through the school certification process and reserves the right to approve a lower amount than the school-certified amount or withhold funding if the school doesn't certify private student loans.

How long does the application process take?

This depends partly on your school. Applying online and receiving a preliminary decision takes 5 minutes or less. Then, you’ll need to wait for your school to complete the certification process. Each school has its own processes and timelines, but a good estimate is approximately 4 to 6 weeks from when you apply to when your school receives the funds.

Need your loan sooner? You can talk to one of our student loan specialists at 1-877-304-9302, M-F, 8 am - 8 pm ET.

What costs are covered by Navy Federal's private student loans?

Our loans can be used for tuition, dorm room costs or off-campus housing (e.g., rent for an apartment), textbooks and supplies, laptops, food costs (e.g., meal plans or groceries), transportation and other education-related expenses certified by your school.

Can I borrow for the whole school year or should I borrow by semester?

You can do either. The benefit to applying for the whole school year is that you’ll only need to apply once and will have only one credit check. If, however, your plans are uncertain, we also welcome applications for one semester at a time.

One thing to know: Interest only accrues on the funds that have been disbursed, and there’s no penalty to cancel any additional future disbursements.

How can I know if I'm borrowing enough money to cover my college expenses?

You can calculate how much you’ll need by using your school’s cost of attendance minus any grants, scholarships, personal savings and federal loans. You should be able to find the cost of attendance on the financial aid section of your school's website. Please note that during the certification process, your school will verify the loan amount requested.

Can I use a co-signer who doesn’t live in the United States?

To be eligible to apply, a co-signer must be a U.S. citizen or legal resident and a Navy Federal member.

What if a school I’m interested in attending isn't on the list of approved schools?

It's likely that the school doesn't meet the eligibility criteria. For example, we don’t offer loans to cover costs of for-profit or foreign institutions or for those colleges that don’t certify the cost of attendance. You can call us with questions at 1-877-304-9302, M-F, 8 am - 8 pm, ET.

Who is LendKey?

LendKey is our servicer for student loans. Navy Federal has partnered with LendKey to leverage their expertise in working with schools to ensure the best experience for our members.

How does the school get paid? Do you send the money to me or directly to the school?

The funds will be sent to the school. Typically, they'll apply the money to your balance and will send you the remainder. It can take between 5 to 7 business days from the date you accept your final disclosure for your bill to be paid (unless the school requests a later date).

Can the funds for my student loan be sent directly to me?

Funds are sent directly to your school. Any remaining loan amount will be distributed to you, according to your school's policy.

Is the interest tax deductible?

Yes, interest on student loans is tax deductible with some restrictions. An in-depth explanation is available on the IRS website.

What is SOFR?

SOFR stands for the Secured Overnight Financing Rate.  This is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities.  Navy Federal’s student, refinance and parent refinance loans will vary based on the 90-day average of the daily SOFR rate, as published by the Federal Reserve Bank of New York as of two business days immediately preceding the quarterly adjustment date.  Variable interest rates will adjust quarterly on the first day of January, April, July and October.

How do you determine my interest rate?

The lowest rate the member could receive is based on multiple variables, including the applicant’s credit history, the co-signer's credit (if applicable), the repayment term and if an automatic payment plan for monthly payments has been set up. There are no application or origination fees associated with our Student, Refi or Parent Refi loans. Although interest rates can change, our current rates are listed on our student loan options page.   

Can the interest rate I receive change, or will it remain the same for the life of the loan? 

We offer both fixed- and variable-rate student loans. For fixed-rate loans, the interest rate you receive will apply for the life of the loan. For variable-rate loans, your interest rate will change quarterly. For additional information on both fixed- and variable-rate loans, visit our private student loan rates page.   

Is there a limit on how high the variable rate can go? 

Yes. The variable rate is currently capped at 18%.

How often does the variable interest rate change, and how is it determined? 

For our variable-rate student loans, your interest rate is based upon the 90-day Secured Overnight Financing Rate (SOFR), as published by the Federal Reserve Bank of New York, and can change on a quarterly basis. This means your rate could move lower or higher than the rate you first receive on the loan.

What interest rate can I get on a fixed-rate loan? 

You can always find the most current rates available on our private student loans page. Keep in mind the interest rate you receive will be determined after you apply and will be based on your credit history and other factors (co-signer credit, automatic payment enrollment, etc.).

Are there any discounts available on your student loans?

Yes. Currently, we offer an interest rate discount for student loan borrowers who set up automatic payments for their loans.

Can I use a student loan to pay my school for a past due balance?

As part of your loan application, you can request funds for tuition balances that are up to 90 days past due.

What's the loan repayment term for private student loans?

Private student loan applicants can choose a 5- or 10-year repayment term. Students are given up to 4.5 years of in-school time and a 6-month grace period before entering the 5- or 10-year full repayment period. This means that the loan term will vary depending on the chosen repayment term and how far along a student is in their studies. For example, a student who is taking out a 10-year loan for their junior year will have 20 months of in-school time (assuming their loan is disbursed in August 2022 and they graduate in May 2024), 6 months of grace, then the 10-year repayment period. The student's total loan term will be 146 months.

How long is the repayment period?

During your application process, you can select either a 5- or 10-year repayment period. Once the loan enters full repayment, the term will start.

Is there any penalty for paying off the loan early?

No, you won't be penalized for paying off your loans early.

What's the Career Assistance Program?

The Career Assistance Program provides access to an exclusive online job search training system and resources, making it easier for you to find a job that’s a great fit. It includes aggregated job boards, assessments and job search training with a multimedia curriculum.

How do I access the online Career Assistance Program?

If you have a Navy Federal education loan, you’re eligible. To get started, sign in, then select Explore Career Assistance under the My Info tab and sign up.

Can I refinance Parent PLUS or private parent loans with Navy Federal?

Yes, Parent PLUS and private parent loans are eligible for a Navy Federal parent refinance loan.

What types of loans can be refinanced?

Federal and private student loans can both be refinanced with Navy Federal.

Do I lose any benefits if I refinance my federal student loan with Navy Federal?

When you refinance your federal student loans with Navy Federal, you will no longer qualify for benefits applicable to federal student loans. These benefits include: 

• certain forbearance and deferment options
• loan forgiveness for public service or other potential forgiveness programs
• income-based repayment plans
• any government suspension of federal student loan payments

If you want to preserve those benefits, consider consolidating into a Federal Direct consolidation loan with the Federal Government. A full explanation of federal student loan benefits and consolidation options can be found at studentaid.ed.gov.

I'm thinking about refinancing my student loan(s). How can I decide if that’s the right move for me?

While refinancing private and federal student loans is often a smart idea, it isn’t necessarily the right decision for everyone. There’s a lot to consider. We can help you understand if  refinancing student loans makes sense for you.

What’s the difference between refinancing and consolidating student loans?

• Consolidation. Student loan consolidation is a U.S. Department of Education (DOE) program that allows you to combine the federal student loans you already have into one. Your new loan’s interest rate will be a weighted average from your previous loans’ rates. You can’t include your private student loans (those you received from private sources like banks, credit unions or online lenders) in the DOE’s program.
  
• Refinancing. Student loan refinancing is done through a private lender like a bank or credit union. You can combine the private and/or federal student loans you already have into one new loan. You can also refinance just one loan for a lower rate or more convenient terms. Even if you previously consolidated or refinanced your student loans, you still may be able to refinance. 

Why is the payoff amount higher than my current loan balance?

The payoff amount may be higher because it includes additional interest that may accrue while we're processing the payoff.

What is the Servicemembers Civil Relief Act (SCRA)?

The Servicemembers Civil Relief Act (SCRA) provides legal and financial protection to eligible Active Duty servicemembers. It includes benefits such as a 6% interest rate cap. However, effective April 1, 2022, Navy Federal is offering a lower maximum interest rate of 4% to eligible member accounts.

Is my student loan eligible for these benefits?

Your Navy Federal loan may be eligible for SCRA benefits if it was opened before you started Active Duty. Visit our SCRA page for more information on eligibility and to request benefits.