Loans for Students
Federal Direct Loans for Students
There are two types of Federal Direct Loans:
Students with Direct Subsidized Loans have the government pay the interest while the student is enrolled in at least 6.0 units (half time). For Unsubsidized Direct Loans, the student is responsible for paying all the interest on the loan, during college and after. A student can receive both types of Direct Loans at the same time.
A first-time borrower is a borrower who has no outstanding balance of principal or interest on a Direct Loan or FFEL loan on July 1, 2013. Borrowers who had a loan balance which has been paid in full prior to receiving loans after July 1, 2013 becomes a first-time borrower. A first-time borrower is no longer eligible for Direct Subsidized loans once the borrower has received Direct Subsidized loans for a period of 150% of the length of the borrower's educational program. The borrower also becomes responsible for accruing interest during all periods as of the date the borrower exceeds the 150% limit. For detailed information on 150% Loan Limit visit Time Limitation on Direct Subsidized Loan Eligibility For First Time Borrowers
- For Direct Subsidized and Unsubsidized loans where the first disbursement is on July 1, 2019, through June 30, 2020, the fixed interest rate is 4.53%. (Subject to change without notice)
- For Direct Subsidized and Unsubsidized loans where the first disbursement is on July 1, 2020, through June 30, 2021, the fixed interest rate is 2.75%. (Subject to change without notice)
#1) Complete a Free Application for Federal Student Aid (FAFSA) at fafsa.gov
#2) Submit all documents requested by the SBCC Financial Aid Office to complete your FAFSA application.
#3) Go to studentloans.gov to complete the Direct Loan Entrance Counseling and the Direct Loan Master Promissory Note. At the Federal Student Aid home page, click the Log In link. Input your FSA ID Username and Password, then click Log In. Once you are signed in, click Complete Counseling. Click the Start Entrance Counseling link for Entrance Counseling.
NOTE: If you have previously completed Direct Loan Entrance Counseling, you do not need to complete the entrance counseling again.
Once you finish the entrance counseling and click the Submit Counseling link, you will be at the Entrance Counseling Summary screen. Scroll down to the Next Steps section and click Complete a Master Promissory Note.
You will need reference information for two people with different U.S. addresses who have known you at least 3 years. The first reference should be a parent or legal guardian. NOTE: If you have completed a Direct Loan Master Promissory Note (MPN) within the last 10 years, you can confirm your MPN status by clicking on the link Completed MPNs at the left hand side of the screen.
#4) Meeting good standing for Satisfactory Academic Progress (SAP) is required to be eligible for a student loan. While you may submit your Federal Direct Loan Request before your SAP Appeal is approved, it will be delayed until the Appeals Committee has made a decision. If the decision is to grant the appeal, your loan will move forward to the next step. If the decision of the Committee is to deny financial aid, your loan will be cancelled. SAP notices are sent after grades are posted at the end of each semester. To identify your Academic Progress Status, log into your Pipeline account. Under the Student tab, select Financial Aid, click on Financial Aid Status. Select the Aid Year and click submit. Click on the Academic Progress tab. Click here to be directed to the instructions for how to complete a SAP Appeal if required.
#5) Log on to your SBCC Pipeline account. Click on Student, then Financial Aid. At the Financial Aid page, click on Award, then Award for Aid Year. At the Award for Aid Year page, click on the Award Overview tab. Click on the Direct Loan Request link. The link includes the Student Loan Request form and the Direct Loan Recommendations and Additional Information page.
#6) Review the Direct Loan Recommendations and Additional Information page for helpful tools to complete the Student Loan Request form.
#7) The Student Loan Request form is a fillable PDF which you will complete online, then print. Handwritten forms are not accepted. This excludes the handwritten signature requirement.
#8) Come to the Financial Aid Office with the completed Student Loan Request form to meet with a Financial Aid advisor for loan intake. You will need to present a picture ID for loan intake.
Student support services are being offered remotely, please email the hand-signed and completed Student Loan Request Form (Repeat Direct Loan borrower, be sure to include your NSLDS loan history report as directed on loan form) and an unexpired legible government picture ID to email@example.com from your SBCC Pipeline student email account.
#1) Complete Steps 1 through 9 under "How do I request a Direct Loan?"
#2) Email the hand-signed and completed Student Loan Request Form and an unexpired legible government picture ID to firstname.lastname@example.org from your SBCC Pipeline student email account.
Please note that the financial aid office may contact you for additional phone counseling and/or video chat in order to process your Direct Loan request.
Processing Time: 5-7 business days
SBCC is a two-year institution. Therefore, students are only eligible to apply for a first-year (less than 30 units completed at SBCC) or second-year (30 units or more completed at SBCC) student loan. Note: Transcripts from other institutions WILL NOT be considered to determine grade level for loan eligibility. SBCC transcripts will be used solely to determine grade level eligibility.
Annual Stafford Loan Limits are as follows:
Base Amount Additional Unsubsidized Additional Unsubsidized (All Students) Dependent* Students Independent* Students Dependent Students whose parents cannot borrow PLUS 1st Year $3500 $2000 $6000 2nd Year $4500 $2000 $6000
* As defined by the Department of Education for financial aid purposes.
Yes. For all Direct Subsidized and Unsubsidized loans with a first disbursement date on October 1, 2018 through September 30, 2019, the origination fee is 1.062%. (Subject to change without notice.) For all Direct Subsidized Loans and Direct Unsubsidized Loans with a first disbursement date on October 1, 2019 through September 30, 2020, the origination fee is 1.059%. (Subject to change without notice.)
Student loans are paid in two equal disbursements during the selected loan period. For academic year loans, the 1st disbursement is paid in fall and the 2nd disbursement is paid at the beginning of the spring semester. For one-semester loans, the loan is paid in two equal disbursements during the semester. Fall Semester ONLY loan request will require show of proof of graduation (a graduation date on a SEP declared by an academic counselor).
In accordance with federal regulations, no loan money may be released sooner than ten days prior to the beginning of a semester, unless you are a first time Direct Loan borrower with the Department of Education. If you are a first-time Direct Loan borrower, the 1st disbursement will be 30 days after the beginning of the semester.
IMPORTANT! To receive a disbursement of an approved Direct Loan, you must be enrolled in at least 6 units (half time) for each semester it is intended. Please note! The start date of your classes will affect when you will receive your student loan. Please refer to your registration or the Schedule of Classes to determine the start date of your classes.
You must be in good academic standing. For more information regarding Satisfactory Academic Progress, click here.
You must complete the Loan Entrance Counseling and Loan Agreement/Master Promissory Note (MPN) at studentloans.gov.
- The Direct Loan is delivered to the student through Santa Barbara City College. Students have two choices of how they receive their disbursement – either as a check mailed to the address in their Pipeline account or by direct deposit to a checking or savings account. To sign up for direct deposit,log into your financial aid Pipeline account and click on the link Direct Deposit.
Please note - checks CANNOT be picked up!
- Yes. Check Deadlines for specific dates.
- After graduating, leaving school, or enrolling less than half time, a student will have a six month "grace period" before the first loan payment is due. All Direct Loans must be paid back with interest. Typically a student will have 10 years to repay their Direct Loan.
FEDERAL STUDENT AID OMBUDSMAN
If you have a problem or question about your student loan, the Federal Student Aid (FSA) Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans. For more information about the FSA Ombudsman, go to Federal Student Aid Ombudsman Group or call (877) 557-2575. The mailing address is U.S. Department of Education, FSA Ombudsman Group, 830 1st Street, N.E. Mail Stop 5144, Washington, D.C. 20202-5144. Fax number (202) 275-0549.