Direct Stafford Loan Program - Financial Aid Office

Important Notice:In Direct Subsidized and Unsubsidized 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. Ohlone College does not participate in the Direct PLUS Loan Program.

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.

Introduction to the Direct Stafford Loan Program

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

The Direct Stafford 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.

The 150% Direct Subsidized Loan Limit

The 150% Direct Subsidized Loan Limit applies to first time borrowers on or after July 1, 2013, only. Students are no longer eligible to receive additional Direct Subsidized Loan once they have received or exceed 150% of the published length of the program they are currently enrolled. For example, a student enrolled in a two-year program will have three years’ worth of subsidized loan eligibility, and a student enrolled in a four-year program will have six years’ worth of subsidized loan eligibility. Moreover, students lose the interest subsidy and the interest will begin to accrue. Students are responsible for paying the interest on Direct Subsidized Loans while enrolled in school at least half time.

See Time Limitation on Direct Subsidized Loan Eligibility for First-Time Borrowers on or After July 1, 2013 for more examples and detailed information about the subsidy limit.

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 2019-2020 academic year, the interest rate for Direct Subsidized Loans and Unsubsidized Loans is 4.53%. The origination fee of 1.062% applies to loans first disbursed on or after October 1, 2018 and before October 1, 2019. The new origination fee of 1.059% is in effect for loans first disbursed on or after October 1, 2019 and before October 1, 2020. The loan fee is automatically deducted proportionately from each disbursement. Interest rates and loan fee are determined by the U.S. Congress.

Annual 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. Since Ohlone College is a two-year institution, students may not borrow more than the second year amount even if they are enrolled for a third year.

The maximum subsidized amount 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.

​DEPENDENT STUDENT

​Subsidized Loan

​Unsubsidized Loan

Total Maximum Amount

​1st Year (less than 30 units)

​$3,500

​$2,000

$5,500​

​2nd year (30 units or more)

​$4,500

$2,000​

​$6,500

​INDEPENDENT STUDENT

​Subsidized Loan

​Unsubsidized Loan

Total Maximum Amount

​1st Year (less than 30 units)

​$3,500

​$6,000

$9,500​

​2nd year (30 units or more)

​$4,500

$6,000​

​$10,500

Steps for Applying for a Federal Direct Loan

Note: Loan Entrance Counseling is required for all student borrowers applying for a Federal Direct Loan at Ohlone College. Loan counseling will help you understand your rights and responsibilities as a student loan borrower. It must be completed online at https://studentloans.gov and the Financial Aid Office will receive confirmation electronically.

New Borrowers

  1. Upon applying, must have completed at least six (6) Ohlone College credits and minimum 2.0 cumulative GPA (Note: Exceptions are made for Registered Nursing, Respiratory Therapist, and Physical Therapist Assistant students)
  2. Complete the FAFSA (Free Application for Federal Student Aid) at www.fafsa.gov
  3. Be enrolled in at least 6 units (Late start classes may affect disbursement date)
  4. Meet Satisfactory Academic Progress (SAP) standards
    • If you are on Excessive Units or Disqualification status, you must submit an appeal and a Student Education Plan for review
  5. Have a completed Financial Aid file
  6. Complete Loan Entrance Counseling at www.studentloans.gov
  7. Complete Loan Agreement (Master Promissory Note) at www.studentloans.gov. 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 2019-2020 Direct Loan Information and Request Form and return to the Financial Aid Office by the deadline
  9. Provide a copy of your loan history (attach to the request form)
    • Go to https://nslds.ed.gov
    • Select “Financial Aid Review”
    • Read the disclaimer and select “Accept”
    • Enter your FSA ID needed to access your information and select “Login”
  10. Once all steps are complete, loan processing time is approximately 2 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.gov
  2. Be enrolled in at least 6 units (Late start classes may affect disbursement date)
  3. 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 or Disqualification status, you must submit an appeal and a Student Education Plan for review
  4. Have a completed Financial Aid file
  5. Complete the 2019-2020 Direct Loan Information and Request Form and return to the Financial Aid Office by the deadline
  6. Provide a copy of your loan history (attach to the request form)
    • Go to https://nslds.ed.gov
    • Select “Financial Aid Review”
    • Read the disclaimer and select “Accept”
    • Enter your FSA ID needed to access your information and select “Login”
  7. Once all steps are complete, loan processing time is approximately 2 weeks

Loan Application Deadline Date: March 20, 2020.

Information About Your Loans

The National Student Loan Data System (NSLDS) is a centralized database that keeps track of federal student loan and grant information managed by the U.S. Department of Education. It allows you to access your information at any time. By checking in regularly, you can stay on top of your loan status (i.e. deferment, repayment, default, cancelled, paid in full, etc.) New loans are reported to the NSLDS within 30 days of disbursement. Besides, you can contact your current loan servicer in regards to your most current loan information.

Note: The NSLDS doesn’t include any information about your private student loans. If you are not sure of who to contact for private loans, request for the free annual credit report; it should list all your current debts and accounts, including federal and private student loans.

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 your selected refund preference with BankMobile.

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.

Loan Exit Counseling

All borrowers who drop below half time enrollment, graduate, or leave school 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 six-month grace period ended. You will receive information about repayment and your loan servicer will notify you of the date loan repayment begins. 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.

Loan Default

Your loan goes into default after you have gone 270 days without making a monthly payment. As soon as you think you have trouble making student loan payments, contact your student loan servicer about your options for making those payments more affordable. You may be able to change repayment plans, consolidate your loans and possibly reduce your monthly payments, or temporarily suspend payments. Your loan servicer can explain all of these options and work closely with you to address your needs.

Here are some serious consequences of default:

  • Your wages can be garnished
  • Your state and federal income tax refunds can be withheld
  • You can no longer receive any Federal student aid
  • Severe damage to your credit report
  • You can no longer receive deferments or forbearances
  • You will have to pay late fees and collection costs on top of what you already owe
  • You can be sued

Loan Deferment or Forbearance

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.