Direct Loan Program - Financial Aid Office

In Direct Loan Subsidized, Unsubsidized and PLUS loans, Ohlone College has the authority to refuse the origination of a loan and/or originate a loan at less than the amount requested by the student.  This is done on an individual student basis.

A Caution About Student Loans

The first disbursement for new borrowers will be 30 days from the beginning of the loan period to ensure their continued enrollment. Refunds are released to the students after their enrollment has been verified; twice per semester.

You should not plan to use the loan money to pay registration fees, early fee payments, or to buy your textbooks as these funds will arrive after classes begin, but you may be able to utilize an Emergency Short Term Loan for those purposes.

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

The Direct Loan Program offers the same types of loans as the FFEL Program and generally has 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. 

Direct Loan Types

The Federal Direct Subsidized Loans are based on financial need, as determined by your cost of attendance minus expected family contribution and other financial aid (such as grants or scholarships). The federal government pays the interest while you are enrolled in-school on at least a half-time basis, for six months after you leave school (referred to as the grace period*), and during a period of deferment.

*For subsidized loan that is first disbursed between July 1, 2012, and July 1, 2014, students are responsible for paying any interest that accrues during the grace period. You do not have to make payments during the grace period but the interest will be added to the loan principal when the grace period ends.

Please note: Beginning July 1, 2013, a 150% Direct Subsidized Loan Limitation is in effect. New borrowers will qualify for subsidized loans for only 150 percent of the length of their educational programs. A student who is eligible for a subsidized loan reaches his or her 150% limitation and hasn’t finished his or her academic program will lose the interest subsidy. The interest will begin to accrue and the student is responsible for paying the interest on Direct Subsidized Loans while enrolled in school at least half time. Therefore, students are encouraged to complete the declared program on a timely basis. See Direct Subsidized Loan Time Limitation (PDF).

The Federal Direct Unsubsidized Loans are not need-based.  The interest is charged beginning the day the loan is disbursed until the loan is repaid in full. Students may pay the interest accrued while they are in school, during the grace period, or during deferment. If the interest of an unsubsidized loan is unpaid, it will be capitalized (added to the loan principal balance) when students enter repayment.

Interest Rates and Fee

For the 2014-2015 academic year, the interest rate for Direct Subsidized Loans and Unsubsidized Loans is 4.66%. The origination fee of 1.072% applies to loans first disbursed on or after December 1, 2013 and before October 1, 2014. The new origination fee of 1.073% is in effect for loans first disbursed on or after October 1, 2014 and before October 1, 2015. The loan fee is automatically deducted proportionately from each disbursement.  Interest rates and loan fee are determined by the U.S. Congress.

Direct Loan Limits

The loan amount a student can borrow depends upon the need determined on the FAFSA, his or her dependency status, and grade level. A student who has completed less than 30 units is considered a first year student (freshman) while a student who has completed 30 or more units is considered a second year student (sophomore).  If a student intends to include units earned from a prior institution to establish second year loan eligibility, he or she must submit official academic transcript(s) and request to be evaluated by the Admissions & Records.

The maximum subsidized amount based on eligibility for a freshman is $3,500 a year and $4,500 a year for a sophomore.  Dependent students may be eligible for an additional $2,000 in unsubsidized and independent students may be eligible for an additional $6,000 in unsubsidized loans each year.  See the chart below.

Maximum Loan Amounts
Academic Level Subsidized Loan Additional Unsubsidized Loan amount for Dependent Student Additional Unsubsidized Loan Amount for Independent Student
First Year (less than 30 units) $3,500 $2,000 $6,000
Second Year (30 units or more) $4,500 $2,000 $6,000

Ohlone College has the authority to refuse the origination of a loan and/or originate a loan at less than the amount requested by the student. This is done on an individual student basis.

Steps for Applying for a Federal Direct Loan

New Borrowers (in general or at Ohlone College)

  1. Upon applying, have completed at least six (6) Ohlone College credits and minimum 2.0 cumulative GPA (Note: transfer credits do not count)
  2. Complete the FAFSA (Free Application for Federal Student Aid) at www.fafsa.ed.gov
  3. Be enrolled in at least 6 units (half-time)
  4. Meet Satisfactory Academic Progress (SAP) standards
    • If you are on Excessive Units/ Disqualification status, you must submit an appeal and a Student Education Plan for review
  5. Have a completed Financial Aid file at Ohlone College
  6. Complete Loan Entrance Counseling at www.studentloans.gov
    • Click on the green "Sign In" button
    • Select the "Complete Counseling" link
    • Under entrance counseling click the "Start" button
    • Select "California" as the School State and "Ohlone College" as the School Name
    • Follow the instructions to complete the counseling
  7. Complete the Master Promissory Note (MPN) at www.studentloans.gov
    • Click on the green "Sign In" button
    • Choose the "Complete Master Promissory Note" option
    • Select "Subsidized/Unsubsidized" loan type
    • Follow the instructions to complete the MPN
    Please note: It will take 3 to 5 business days for the college to receive confirmation that you have completed the entrance counseling and MPN.
  8. Complete the 2014-2015 Direct Loan Information and Request Form (PDF) and return to the Financial Aid Office by the deadline
  9. Provide a copy of your loan history (*print and attach the Financial Aid Review summary to the request form even if you are not a prior borrower.)
    • Go to www.nslds.ed.gov
    • Click on "Financial Aid Review" and complete the log in
    • Print the page of your loan history
  10. Once all steps are complete, loan processing time is approximately 2-3 weeks. New borrowers will not receive their first disbursement until 30 days after classes have begun.

Returning Borrowers

  1. Complete the FAFSA (Free Application for Federal Student Aid) at www.fafsa.ed.gov
  2. Have a completed Financial Aid file at Ohlone College
  3. Be enrolled in at least 6 units (half-time)
  4. Meet and maintain Satisfactory Academic Progress (SAP) standards
    • Completed at least 6 units and met SAP the last term you received the loan
    • If you are on Excessive Units/ Disqualification, you must submit an appeal and a Student Education Plan for review
  5. Complete Loan Entrance Counseling at www.studentloans.gov (if you haven’t completed previously)
    • Click on the green “Sign In” button
    • Select the “Complete Counseling” link
    • Under entrance counseling click the “Start” button
    • Select “California” as the School State and “Ohlone College” as the School Name
    • Follow the instructions to complete the counseling
  6. Complete the 2014-2015 Direct Loan Information and Request Form (PDF) and return to the Financial Aid Office by the deadline
  7. Provide a copy of your loan history (attach to the request form)
    • Go to www.nslds.ed.gov
    • Click on "Financial Aid Review" and complete the log in
    • Print the page(s) of your loan history
  8. Once all steps are complete, loan processing time is approximately 2-3 weeks

Loan Application Deadline Date: March 20, 2015.

Loan Disbursement

Federal loan funds will be disbursed in two equal installments during the semester, similar to the Pell Grant disbursement. If a student’s loan disbursement is scheduled on, or after, the second (2nd) disbursement of the term, he or she will receive the funds in one installment.  Any outstanding charges owed to Ohlone College will be deducted from the loan amount and credit balance will be disbursed via the My Ohlone Card issued by Higher One.  For additional information, visit My Ohlone Card.

Loan Cancellation

Students have the right as a borrower to cancel all or part of the loan within 14 days of the disbursement. All cancellation requests must be submitted in writing to the Financial Aid Office. After 120 days of the disbursement date and they decide to cancel, they are responsible for paying loan fees and any accrued interest.

Exit Counseling

All borrowers who are graduating or have dropped below halftime (6 units) enrollment status are required to complete online exit counseling. This requirement is in place so students will receive essential information regarding their rights and responsibilities as student loan borrowers.  Remember that student loan indebtedness is reported to credit agencies; therefore, completing the exit requirement is one step in keeping the loans and your credit in good standing.  Exit counseling can be completed online through www.studentloans.gov.

Loan Repayment

After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period. Repayment begins after the 6-month grace period ended. Borrowers have a variety of repayment options. Generally, you’ll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose. The minimum monthly payments may be as low as $50, but this amount may be different depending on your loan balance and your repayment plan. You may repay your loan at any time without penalty. Learn more about your Direct Loans Repayment Options.

Postponing Payment

If you are unable to make your scheduled loan payments, contact your loan servicer immediately. Your loan servicer can help you understand your options for keeping your loan in good standing. Learn more about Direct Loans Deferment or Forbearance Options that allow you to temporarily stop or lower your loan payment.

Loan Consolidation

As of July 1, 2010, all federal student loan consolidations are processed by the U.S. Department of Education through the Federal Direct Loan Program (FDLP). Students previously borrowed through a private lending institution and are interested in combining all of their eligible federal loans into one new loan with one monthly payment may review the consolidating option.  Consolidation has some benefits, as well as drawbacks; therefore, you need to review your situation before making a decision. Visit the website at Federal Direct Consolidation Loans Information Center for more information.

FSA Student Loan Ombudsman

If a borrower disputes the terms of the federal loan and the loan servicer is unable to resolve the issue, a borrower may seek the assistance of the Student Loan Ombudsman Group.  They are available to help resolve disputes and concerns related to federal student loans. Contact the Ombudsman Group as a last resort on the FSA Student Loan Ombudsman Group website or at (877) 557-2575.

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

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