Federal Direct Loans

About Direct Loans

Federal Direct Loans are low-interest loans provided by the government. There are two types of direct loans, subsidized and unsubsidized.

Features of Direct Subsidized Loans

  • Freshmen may qualify to borrow up to $3,500; sophomores may qualify to borrow up to $4,500.
  • The interest rate is fixed at 5.05%.
  • A loan fee of 1.062% will be charged.
  • Interest does not accrue while the student is enrolled in school at least half-time.
  • Only students with demonstrated need qualify for subsidized loans.

Features of Direct Unsubsidized Loans

  • Available regardless of income or financial need (as long as the student is not in loan default).
  • The interest rate is fixed at 5.05%.
  • A loan fee of 1.062% will be charged.
  • Eligibility is determined by the cost of attendance and other financial aid received.
  • Interest accrues while in school.

Loan Limits

Borrowers can receive both subsidized and unsubsidized loans for the same loan period. The combined total of both loans cannot exceed the Federal Loan Program Annual Limits.

Maximum Amounts Dependent Students May Borrow Per Academic Year

  Subsidized Unsubsidized Total
Freshman (fewer than 26 credits) $3,500 $2,000 $5,500
Sophomore (26 credits or more) $4,500 $2,000 $6,500

 

Maximum Amounts Independent Students May Borrow Per Academic Year

  Subsidized Unsubsidized Total
Freshman (fewer than 26 credits) $3,500 $6,000 $9,500
Sophomore (26 credits or more) $4,500 $6,000 $10,500

How to Get a Direct Loan

First-time Borrowers

  1. Apply to SMC.
  2. File the FAFSA using SMC's school code, 002317.
  3. Complete Entrance Loan Counseling via studentloans.gov.
  4. Complete a Direct Loan Master Promissory Note via studentloans.gov.
  5. Make sure that all items under the financial aid column in your Student Dashboard are marked "Complete".
  6. Complete a Budget Worksheet and contact the Financial Aid Office to schedule an in-person loan counseling appointment. You will need to bring the Budget Worksheet with you to your appointment.

Returning Borrowers

  1. Renew your FAFSA for the current aid year.
  2. Make sure that all items under the financial aid column in your Student Dashboard are marked "Complete".
  3. Complete the Budget Worksheet and submit it to the Financial Aid Office.