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Student Loans FAQs

What's the difference between a Federal Student Loan and a
Private Student Loan?

Federal student loans follow guidelines set forth by the U.S. Department of Education and typically offer fixed and lower interest rates compared to private student loans. However, federal loans, unlike most private 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 before making a loan.

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.

What information do I need to apply?

Applicants will need to provide their:

  • Navy Federal Access Number
  • Social Security Number
  • government-issued ID
  • basic information about their academic standing
  • permanent address, phone number and email addresses

Are there eligibility restrictions for these loans?

To qualify, applicants must meet credit and underwriting criteria and be a:

  • member of Navy Federal Credit Union
  • current student or graduate of an eligible school
  • U.S. citizen or permanent resident
  • legal adult in the state they reside

Can Navy Federal Private Student Loans be used at any school?

When applying for a loan at, check to see which colleges or universities are eligible, as not all schools qualify.

How will schools receive the money?

The loan proceeds will be sent to the school by check or through electronic funds transfer (EFT). The check will usually be mailed within 5-7 business days of the borrower accepting their final disclosure unless the school requests a later date. Typically, once the school receives the funds, they will process the amount owed and send the remaining funds to the student.

What is a co-signer, and who should have one?

The need for a co-signer depends on the results of a credit check. A co-signer can help borrowers qualify for a Private Student Loan, especially those who are in school full-time and don't have income of their own. Having a co-signer can also help get a lower rate, which will decrease the cost of the loan.

Who can be a co-signer?

The only qualifications for co-signers are that they must be U.S. citizens or permanent residents, 18 years or older, and be able to pass a credit check. A co-signer can increase the chance of loan approval and may help lower the interest rate of the loan.

What is 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 have 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 does not certify private student loans.

What types of loans can be consolidated?

Only Private Student Loans can be consolidated with Navy Federal. This means that any Federal Student Loans you have aren't eligible.

Use this calculator to see if consolidating your private student loans will save you money.

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 the loan repayment term for Private Student Loans?

Private student loan terms are up to 15 years. Students are given up to 4.5 years of in-school time and a 6-month grace period before entering the ten-year full repayment period. This means that the loan term will vary depending on how far along a student is in his or her studies. For example, a student who is taking out a loan for her junior year will have 20 months of in-school time (assuming her loan is disbursed in August 2015 and she graduates in May 2017), six months of grace, then the ten-year repayment period. Her total loan term will be 146 months.

What is LIBOR?

LIBOR stands for the London Interbank Offered Rate. This is a rate at which banks can borrow from each other. Navy Federal's Private Student Loan rates vary based on the 3-month LIBOR rate, as published in The Wall Street Journal on the first business day of each of the three (3) months immediately preceding each quarterly adjustment date. If the first day of the month is not a business day, the preceding business day will be used. Interest rates will adjust quarterly on the first day of January, April, July, and October.

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