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Direct Loans

​​​​​​​​​NEW STUDENT BORROWERS - Direct Loan Workshops
Students who have never borrowed a student loan or have borrowed before in the past and have a zero balance must attend a workshop.  Students may sign up for workshops after notification from the Financial Aid Office that their award process has been completed.  You may check the status of your award process on WebAdvisor.
RETURNING STUDENT BORROWERS - Document Submittal Appointments
Students who have borrowed before at SCC or another institution are not required to attend a workshop, however a loan packet must be picked up directly with the Financial Aid Office.  Students are also required to make an appointment at that time.





(*Appointment time will be provided when you call office and sign up)

The Direct Loan Program is considered to be a federal entitlement program.  This means that funding is available through the entire year to as many eligible students as wish to apply. 

Direct Loans are a serious obligation and need to be repaid.  Thus, students are encouraged to borrow wisely and to borrow only the amount that is needed to meet their current educational costs.  Direct Loans may be subsidized or unsubsidized.  All Direct Loans are subject to an origination fee.


Congress has passed and the President has signed the Bipartisan Student Loan Certainty Act of 2013, which ties federal student loan interest rates to financial markets. Under this Act, interest rates will be determined each June for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan will have a fixed interest rate for the life of the loan.

Direct Subsidized: 
The subsidized loan is the best choice for students looking to borrow money for education.  This is because the interest on a subsidized loan is paid by the government while you are attending school. 

Benefits of a Subsidized Loan:

    • The interest rate on Subsidized Loans for undergraduate students vary and are subject to change, currently as low as 4.45%
    • No payments while enrolled in school (minimum of 6 units) or in deferment
    • No interest accrued while enrolled in school
 For new loans first disbursed on or after July 1, 2012, through June 30, 2014, the federal government will no longer subsidize (pay) the student loan interest during the six month grace period.  The grace period is the time between when the student graduates or drops below half-time status and the time when the student must start repaying the loan. 

Students are encouraged to check with their Loan Servicer ​for any available options to assist with their loan repayment.

Maximum Annual Loan Limits: (Maximum award amounts based o​n budget eligibility):
Grade Level 1 = $3,500 (0-29 units completed) Freshman 
Grade Level 2 = $4,500 (30-70 units completed) Sophomore


Maximum amounts for all loans being processed for only one semester of the academic year will be prorated to 50%.

Direct Unsubsidized:

Unsubsidized loans are available to those with or without documented financial need.  The interest on an unsubsidized loan begins immediately.  Capitalization adds unpaid interest to the principal amount you borrowed.  Unsubsidized loans are not recommended at SCC, unless the student has exceptional need.

The interest rate on Direct Unsubsidized Direct Loans for undergraduate students is currently 3.76%.

Maximum Annual Loan Limits:  (Maximum award amounts based on budget eligibility):
Dependent:       $2,000
Independent:     $6,000


    1. Meet all qualifications for federal student aid.  Complete a FAFSA Application online at
    2. Submit all required documents to the Financial Aid Office (E-104) as requested.
    3. Receive an award letter with a loan offer on Web Advisor. 
    4. Come to the Financial Aid Office (E-104) to pick up a Loan Packet and sign up to attend a Direct Loan Counseling Workshop.  Attendance at a Direct Loan Counseling Workshop is a SCC requirement for all New borrowers.
    5. Meet Satisfactory Academic Progress requirements.
    6. Be actively attending a minimum of 6 eligible units at either SCC or SAC.
    7. New SCC borrowers must complete an Online Entrance Counseling.
    8. Returning borrowers are required to make an appointment to submit the required documents.
    9. Returning borrowers that have borrowed at another institution must notify SCC of their completed online Entrance Counseling by going to
    10. At the time of origination, academic grade level will be determined according to units completed/transferred in our district.  Academic transcripts from previously attended schools must be delivered and evaluated by the Admissions Office to change a grade level.
    11. Follow the disbursement calendar for all loan disbursements.
 It is the policy of SCC to calculate maximum Pell eligibility
to determine loan amounts.

The online Entrance and Exit Counseling including the Master Promissory Note (MPN) is a requirement for all loan borrowers.  These components must be completed online at www.student 

  • Entrance Counseling will take approximately 20-30 minutes.
  • Exit Counseling will take approximately 30-40 minutes.
  • Master Promissory Note will take approximately 15-20 minutes.  

Returning students are not required to re-submit the Entrance Counseling unless the student is "New" to SCC and has borrowed at a prior institution.  Returning borrowers must notify SCC electronically of the previous completed Entrance Counseling by logging on to  Instructions are given within the loan packet.

The Master Promissory Note (MPN) must be completed online once SCC has received the Direct Loan Request and has submitted origination.  Any prior MPN's will be electronically linked to the student records
(On occasion, students may need to re-do an MPN).


 On a case-by case basis students may be required to:
    1. Meet with a Financial Aid Analyst for loan counseling.
    2. Have current instructors verify that the student is actively attending the classes the student is enrolled in.
    3. The student’s academic school budget may be reviewed and modified if enrollment has changed per the Department of Education guidelines.
    4. May need to complete a loan appeal if:  (Below are examples, but are not limited to the following examples)
      • Students who have borrowed a private loan at any level.
        • Students who have borrowed at a four year university.
          • Student loan borrowers that have borrowed at least half of the aggregate amount for Subsidized or Unsubsidized loans.
            • Students who have already obtained an AA or BA degree.
              • Students who have already obtained an AA or BA degree and now they are currently enrolled in a certificate program.
                • Students with over 90 units attempted, transferred from another school that are taking additional units at SCC in order to transfer to a four year institution.
                  • Students with previous loans that have been rehabilitated previously defaulted and consolidated may be required to submit a loan appeal.

              SCC Direct Loan Policy - Students who have to appeal may have a processing delay of future student loan funds.  The approval or denial will apply for the entire academic year.

              Students, who have previously attended any other colleges, attended a four-year university, or completed 90 units, or have received a degree must meet unit residency requirements and comply with the following standards:

              • At least a cumulative GPA of 2.0
              • A minimum or 12 units completed at our District
              • Official transcripts form all colleges attended must be on file and evaluated.  Must complete the appeal process which includes meeting with an academic counselor if over 90 units have been attempted and/or completed, or have received a degree.

              On a case by case basis we will not certify or process loans for students if we determine any or all of the following:

                • Any new transfer students that have borrowed in excess of annual or aggregate loan limits (A student who has borrowed Title IV loans in excess is not eligible for additional Title IV aid)
                • That the student already has a degree from another school
                • That the student has attended other postsecondary institutions in the past and has not made much progress towards their degree
                • Student has attempted excessive units at other postsecondary institutions or at RSCCD  prior to applying for aid
                • If the student has not disclosed previously attended institutions to us during the completion of his/her admission application
                • Student has no clear objective to obtain a degree/certificate from RSCCD and/or is not considered a regular student based on federal regulations

              As a Default Prevention Initiative:
              On a case-by case basis the Financial Aid Office reserves the right to delay or deny any Student Loans Disbursement(s) for students.  The following are examples but not limited to the following:

                • Students with previous Return to Title IV history, in simple terms, if a student completely withdrew after receiving a loan during any previous term at RSCCD.  The disbursement(s) will be delayed until it is determined by the Financial Aid Office that the student is participating and making satisfactory academic progress in all classes. In the event that it is determined a student is not making satisfactory academic progress the loan will be cancelled immediately and no disbursements will be made.
                • The Financial Aid Appeals committee reserves the right to decline any student loan request to students not carrying full-time load and have already exceeded over 90 attempted units.
                • Students that have been enrolled less than full-time (less than 12 units) for more than one year continuously may not be allowed to borrow again.

              DIRECT PLUS LOAN - For Parents of Dependent Students:
              Eligibility Requirements:

               The dependent student must be a full-time or half-time undergraduate student enrolled in a minimum of six eligible/active units.
                • The student must meet Satisfactory Academic Progress Policy (SAP) requirements.
                • You must be the biological, adoptive or step-parent of the dependent student for whom you are borrowing.
                • A U.S. citizen or an eligible non-citizen (parent and student).
                • Credit check is performed by the Department of Education.  Loans are available to parents with no adverse credit history.
                • A dependent student may apply for an Independent student Direct Unsubsidized Loan if the parents request for a loan is denied.  

              Maximum Annual Loan Amounts:
              There are no set limits for the Direct PLUS Loan.  Parents may borrow up to the cost of attendance minus all educational resources.

                Application Process:   
              • Complete the Free Application for Federal Student Aid (FAFSA) on-line at
              • Complete the Direct PLUS Loan application and Master Promissory Note (MPN) on-line at for each of your dependent borrowers for whom you are requesting a loan; even if your dependents are at the same school; a separate loan request must be filed for each school year.
              • A Santiago Canyon College PLUS Loan Request form must be completed and turned into the SCC Financial Aid Office, E104 by the parent borrower and the dependent student. Direct Loans will be disbursed two times a semester.  Typically, loans are disbursed half in the fall and half in the spring.  First disbursements for new borrowers cannot be authorized until 30 days into the semester.  Students must be actively attending a minimum of 6 eligible units at RSCCD to receive a Direct Loan.

              Forbearance is an arrangement to postpone or reduce your monthly payment amount for a limited and specific period during which you are charged interest.  If you indicate a temporary inability, but willingness to pay the loan(s), you may ask for or be offered a forbearance.  For all Direct Loans, interest that accrues during forbearance is the responsibility of the borrower.  When you re-enter repayment at the end of the forbearance period, any unpaid interest capitalizes *(is added to the principal balance).  You can view the Repayment Estimator to get an early look at which plans may be eligible for you.
              There are several forbearance types.  You must apply and qualify for forbearance and the U.S. Department of Education must approve the request in order for forbearance to be in effect.  If you are not eligible for forbearance you may still be eligible for a deferment.



              A deferment is a temporary suspension of loan payments for specific situations such as re-enrollment in school, unemployment, or economic hardship: Listing of deferments.  You do not have to pay interest on the loan during deferment if you have a subsidized Direct or FFEL, Stafford Loan or a Federal Perkins Loan.  If you have an unsubsidized Direct or FFEL Stafford Loan you are responsible for the interest during deferment.  If you do not pay the interest as it accrues (accumulates), it will be capitalized (added to the loan principal), and the amount you have to pay in the future will be higher.  You have to apply for a deferment to your loan servicer (the organization that handles your loan), and you must continue to make payments until you have been notified that your deferment has been granted.  Otherwise, you could become delinquent or go into default.  You must be enrolled at an eligible school at least as a half-time student.