Direct Loan Program - Financial Aid Office

Ohlone College participates in the William D. Ford Federal Direct Loan (Direct Loan) Program. Students who previously received loans through the Federal Family Education Loan (FFEL) Program (which was also known as the Stafford Loan) will now borrow through the Direct Loan Program. 

The Direct Loan Program offers the same types of loans as the FFEL Program and Direct Loans generally have the same terms and conditions as FFEL Program loans, but instead of a bank lending the money, the U.S. Department of Education (the Department) lends the money directly to students through Ohlone College. 

There are also some differences in the names of the loans.  The FFEL Program’s Federal Stafford Loans (subsidized and unsubsidized) are called Direct Subsidized Loans and Direct Unsubsidized Loans in the Direct Loan Program.

The Direct Loan Program helps students from both low- and middle-income families. The fixed interest rate on the loan changes every July 1st, but is capped at 8.25%.  

The federal government pays the interest on a subsidized loan while the student is enrolled at least half-time in an eligible educational institution with a 2.0 or higher GPA, as well as during the six-month grace period after completion of enrollment.  An unsubsidized loan is not need based and interest accrues while the student is in school.

The amount a student can borrow depends upon the need determined on the FAFSA, your dependency status, and the number of units you have completed.  Your need will be determined by subtracting other sources of student aid and the expected family contribution from the college costs. The maximum subsidized amount based on eligibility for a dependent student is $3,500 a year as a freshman (less than 30 units) and $4,500 a year as a sophomore (30 or more units).  Subsidized or unsubsidized amounts will be determined based on unmet need.  Independent students may be eligible for an additional $6,000 in unsubsidized monies.

You must be enrolled in at least six (6) semester units (half-time status), and demonstrate satisfactory academic progress (2.0 or higher cumulative and current GPA) at the time of loan application. Repayment begins six (6) months after you cease being a half-time student, withdraw or graduate from college.

Direct Loan Amounts

Academic Level	Subsidized Direct Loan
First Year (less than 30 units)	$3,500 per academic year
Second Year (30 or more units)	$4,500 per academic year

How to Apply for a Direct Loan

To be considered for the Direct Loan, you must complete the 2011-2012 FAFSA and all other required documentation from the Financial Aid Office of Ohlone College. You must also be enrolled in and complete a minimum of 6 units (from the prior semester) and meeting satisfactory academic progress requirements.

Bachelor degree students applying for a student loan need to complete a Financial Aid Appeal and are required to be enrolled in and complete a minimum of 6 or more degree applicable units from their current Student Education Plan (SEP).

New Direct Loan Students

If this is your first loan, or first Direct Loan while at Ohlone College, you must attend an on-site Loan Workshop (schedule of loan workshop dates and locations).  At the workshop, you can complete and sign (online) a Direct Loan Master Promissory Note (MPN) and other loan-related documents. 

To complete the MPN, you will need to provide your Social Security Number, date of birth, and driver’s license number as well as two personal references (full name, address and telephone numbers).  You will use for FAFSA PIN to electronically sign the MPN.

Once all steps are complete, including completing the financial aid file, loan processing time is approximately two-to-three weeks. For first-time loan students, the loan check is disbursed after the first 30 days into the semester to ensure continued enrollment, so please plan accordingly. Loan checks will be disbursed twice during the semester, similar to the Pell disbursements. Any outstanding charges owed to Ohlone College will be deducted from your loan amount then the remaining funds will be mailed. The checks are mailed to the student using the address on file with Admissions & Records. It is the student’s responsibility to update their contact information with Admissions & Records.

Returning Direct Loan Students

• Complete the 2011-2012 FAFSA online and submit requested documents to complete your Financial Aid file.

• Meet and maintain Financial Aid Satisfactory Academic Progress requirements.

• If you are on Financial Aid Warning or Probation, you must attend an SAP workshop. If you are on Excessive Units / Disqualification, you must submit an appeal and a Student Education Plan (SEP) for review.

• Complete the 2011-2012 Direct Loan Request Form and Student Statement of Understanding (PDF) and return it to the Financial Aid Office. Note: A new Master Promissory Note (MPN) is not necessary for continuing students.

• Once your Financial Aid file is complete, loan processing time is approximately two to three (2-3) weeks. You will receive a letter notification after we certify your loan request.

• Checks are mailed to the address on file with Admissions & Records. Any outstanding charges owed to Ohlone College will be deducted from your loan then the remaining funds will be mailed to you.

Students have the right as a borrower to cancel all or part of the loan within 14 days of the disbursement. If you wish to cancel any part of a loan, please notify the Financial Aid Office. After 120 days of the disbursement date you decide to cancel, you are responsible for paying loan fees and any accrued interest.

As a result of having new loans under the Direct Loan Program and previous loans under the FFELP, you may owe payments to two or more different entities. You can check your loan balances and loan holders/servicers by creating a login on the National Student Loan Data System, at www.nslds.ed.gov, using the same PIN that you used for the FAFSA and the MPN.

More information about the Direct Loan Program can be found at the Department of Education Student Loan website.