Direct Loans

Direct Subsidized:

Direct Subsidized Loans are available to eligible students who demonstrate financial need. The federal government pays the interest while you are enrolled at least half-time (6 eligible units), during your grace period, and during authorized periods of deferment.

Benefits of a Subsidized Loan:

• Low fixed interest rate
• No loan payments while enrolled at least half-time or during approved deferment
• No interest accrues while enrolled at least half-time or during approved deferment

Maximum Annual Loan Limits (subject to federal eligibility, enrollment level, and budget eligibility)

• Grade Level 1 (0–29 completed units): Up to $3,500
• Grade Level 2 (30+ completed units): Up to $4,500

Subsidized loan amounts for students enrolled less than full-time will be prorated based on enrollment level and federal annual loan limits.

Loans are awarded only up to the student's remaining eligibility after accounting for other aid and applicable loan limits.

Direct Unsubsidized:

Direct Unsubsidized Loans are available to eligible students regardless of financial need. Interest begins accruing when the loan is disbursed, and any unpaid interest may be capitalized. Because interest accrues while you are in school, students are encouraged to borrow only what they need.

Maximum Annual Loan Limits (subject to federal eligibility, enrollment level, and budget eligibility)

• Dependent Students: Up to $2,000
• Independent Students: Up to $6,000

Unsubsidized Loan amounts for students enrolled less than full-time may be prorated based on enrollment level and federal annual loan limits.

Direct Unsubsidized Loans are available to eligible students regardless of financial need. Students who are eligible for a Direct Subsidized Loan must first accept their subsidized loan eligibility before additional unsubsidized loan funds will be considered.

Loan eligibility is determined after all other financial aid has been awarded and is limited by the student's remaining eligibility and applicable federal annual loan limits. Students whose Student Aid Index (SAI) exceeds their Cost of Attendance and who have no financial need may still be eligible for a Direct Unsubsidized Loan, subject to their remaining eligibility and applicable federal annual loan limits.

Online Direct Loan Entrance & Exit Counseling and Master Promissory Note (MPN)

All Direct Loan borrowers are required to complete Entrance Counseling, Exit Counseling, and a
Master Promissory Note (MPN) through the Federal Student Aid website at www.studentaid.gov.

• Entrance Counseling will take approximately 20-30 minutes.
• Exit Counseling will take approximately 20-430 minutes.
• Master Promissory Note will take approximately 10-30 minutes.

Returning SCC borrowers are not required to complete Entrance Counseling again unless they are
new to SCC and previously borrowed at another institution. Students who have already completed
Entrance Counseling at another school must notify SCC after completing the online counseling.
Instructions are included in the Direct Loan Information Packet.

To promote responsible borrowing and reduce the risk of student loan default, SCC may require
additional review before originating or processing a Direct Loan. On a case-by-case basis, students
may be required to:

1. Meet with a Financial Aid Analyst for loan counseling.
2. Verify active enrollment and attendance in current classes.
3. Have their Cost of Attendance (COA) and loan eligibility reviewed if enrollment changes.
4. Submit a Loan Appeal when additional review is necessary:

A Loan Appeal may be required for students who:

• Previously borrowed private or federal student loans at another institution.
• Have borrowed a significant portion of their federal aggregate loan limit.
• Have already earned an associate or bachelor's degree.
• Have attempted more than 90 units or have extensive transfer coursework.
• Previously defaulted on a federal student loan and later rehabilitated or consolidated the loan.
• Student loan borrowers who have borrowed at least half of their aggregate Subsidized and/or Unsubsidized Direct Loan eligibility or have accumulated significant student loan debt, including outstanding loan balances that exceed or are expected to exceed $20,000 by the end of the academic year.

Students required to submit a loan appeal may experience delays in the processing of future student loan funds. Appeal decisions, whether approved or denied, will apply for the entire academic year.

On a case-by-case basis, SCC may decline to originate or process Direct Loans for students who do not have a clear educational objective to complete an eligible degree or certificate program within RSCCD or who do not meet the federal definition of a regular student.

As a Default Prevention Initiative:

As part of SCC’s Default Prevention Initiative, the Financial Aid Office may, on a case-by-case basis, delay or decline the certification or disbursement of Direct Loans when additional review is needed. Examples include, but are not limited to, the following:

• Previous Return of Title IV (R2T4) History: Students who previously received a loan and completely withdrew from all courses during a prior term at RSCCD may have future loan disbursements delayed. The Financial Aid Office may require verification of active course participation and academic progress before releasing loan funds. If the student is determined to be ineligible, the loan may be cancelled and future disbursements will not be made.
• Excessive Loan Debt: Students identified as having significant prior student loan debt may be required to submit additional documentation and may be required to complete a loan appeal before future loan eligibility is determined.
• Previous Loan Default: Students with a history of default on federal student loans may be subject to additional review before future Direct Loan requests are processed.
• Previous Loan Discharge: Students who have received a discharge of prior federal student loans may be required to provide additional documentation and complete a review before future Direct Loan eligibility is determined.
• Regular Student Status: Students must be enrolled in an eligible program and meet the federal definition of a regular student to receive Direct Loan funds. Students without a clear educational objective toward an eligible degree or certificate may be subject to additional review or may not be eligible for loan certification.
• Unusual Enrollment History (UEH): Students selected for Unusual Enrollment History review may be required to submit official transcripts and additional documentation to verify their academic history and completion of coursework before Direct Loan eligibility is determined.

Default Prevention ECMC Solutions:

We've teamed up with Solutions at ECMC to answer all of your student loan repayment questions. Solutions is a service of the non-profit organization ECMC and is dedicated to helping students manage educational loans. Their resources are available to you free of charge. To contact a Solutions Student Loan Repayment Advisor, email or web chat, or call them at 1-877-331-3263.

Eligibility Requirements:

A parent may apply for a Direct PLUS Loan to help pay educational expenses for a dependent student who meets the following requirements:

• The student must be enrolled in at least 6 eligible units applicable toward their program of study.
• The student must meet Satisfactory Academic Progress (SAP) requirements.
• The eligible parent borrower must be the student’s biological parent, adoptive parent, or eligible stepparent.
• Both the eligible parent borrower and student must be a U.S. citizen or eligible non-citizen. Verification of citizenship may be required during the loan origination process.
• The eligible parent borrower must complete a credit check conducted by the U.S. Department of Education and must not have an adverse credit history.
• Eligible parent borrower with an adverse credit history may be required to complete PLUS Loan Credit Counseling.

Maximum Annual Loan Amounts:

Eligible parent borrowers may borrow up to $20,000 per academic year per dependent student, subject to the federal aggregate limit of $65,000 per dependent student. Loan eligibility is also limited by federal requirements, including remaining cost of attendance and other financial assistance.

Parent PLUS Loan Application Process

1. The dependent student must complete the FAFSA at www.studentaid.gov
2. The eligible parent borrower must complete the Direct PLUS Loan Application
3. The eligible parent borrower must complete the Master Promissory Note (MPN). A separate PLUS Loan application is required for each dependent student and each academic year.
4. Complete the SCC Parent PLUS Loan Request Form and submit it to the SCC Financial Aid Office.

Parent PLUS Loans are generally disbursed in two payments each semester (four disbursements for the academic year). New borrowers may not receive their first loan disbursement until 30 days after the start of the semester. The dependent student must be actively enrolled in at least 6 eligible units applicable toward their program of study at RSCCD for loan funds to be disbursed.