Financial Aid

There are two types of Federal Direct Loans:

Subsidized: The U.S. Department of Education pays the interest while a student is in school at least half-time, during the grace period, and during deferment periods.
Unsubsidized: Not based on financial need. Interest is charged during all periods, even during the time a student is in school, during the grace and deferment periods.

To be eligible for loans students must be enrolled at least half time in an eligible program. Once you are no longer enrolled at least half time in an eligible program, you will receive a 6-month grace period on your Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. You must begin repayment at the end of your grace period.

Supplemental Loan Form accepted through November 10, 2023, for the fall term, through April 8, 2024, for spring term and through June 21,2024, for summer term.

For Direct Subsidized and Unsubsidized loans where the first disbursement is on or after July 1, 2022, and before July 1, 2023, the fixed interest rate is 4.99%. 

For Direct Subsidized and Unsubsidized loans where the first disbursement is on or after July 1, 2023, and before July 1, 2024, the fixed interest rate is 5.5%.

 

1. How do I request a Direct Loan?
2. How much can I borrow?
3. Are there fees for my Direct Loan?
4. When will I receive my loan money?
5. How do I receive my loan money?
6. Is there a deadline to apply for a Direct Loan?
7. When do I pay my Direct Loan back?

 

1. How do I request a Direct Loan?

   • Complete a Free Application for Federal Student Aid (FAFSA) online using the FAFSA Form
   • Return all documents requested by the San Mateo County Community College District (SMCCCD) Financial Aid Office to complete your FAFSA application. Refer to your WebSMART for unsatisfied financial aid requirements.
   • If you are a first- time borrower you will need to complete the Master Promissory Note (MPN) and Direct Loan Entrance Counseling.

   To complete the MPN:

   1. Navigate to the website for Federal Student Aid (FSA).
   2. Click “Log In and enter your FSA ID and Password.
   3. Click “Complete Master Promissory Note” and select Subsidized/Unsubsidized Loans.
   4. Enter your personal information.
   5. Select the college you will be attending- Cañada College, College of San Mateo or Skyline College.
   6. Enter your Personal References information.
   7. Read the Terms & Conditions carefully
   8. Review your information and sign your MPN.
   9. You should receive the following message: “Thank you for submitting the MPN”, and receive an email confirmation that it has been completed.
      
      

   To complete the Entrance Counseling:

   1. From the same website for Federal Student Aid (FSA), click Complete Entrance Counseling.
   2. Select Undergraduate and complete the counseling.
   • Complete the Supplemental Direct Loan Form. This is a fillable PDF which you will complete online.
   • Submit the completed Supplemental Direct Loan Form and your current SEP to your Financial Aid Office via their Drop Box. You will need to include a copy of a government picture ID and a copy of your Social Security Card in order for your loan to be processed.

2. How much can I borrow?

   SMCCCD is a two-year institution district. Therefore, students are only eligible to apply for a first-year (less than 30 units completed at SMCCCD) or second-year (30 units or more completed at SMCCCD) student loan. Note: Transfer units from other institutions may be considered when determining grade level for loan eligibility only after the coursework has been evaluated by our Transcript Evaluation Service (TES) and it applies to your current educational goal.

   Annual Direct Loan Limits are as follows:

   ACADEMIC LEVEL	DEPENDENT			INDEPENDENT
   	Subsidized	Unsubsidized	Maximum Total	Subsidized	Unsubsidized	Maximum Total
   1ST Year (0-29.5 units)	$3,500	$2,000	$5,500	$3,500	$6,000	$9,500
   2nd Year (30+ units)	$4,500	$2,000	$6,500	$4,500	$6,000	$10,500

   Note: Your current loan request amount, prior loan debt, Financial Aid Satisfactory Academic Progress (SAP), program length and time left to complete it will be reviewed, and as a result your loan request could be reduced or denied.

   Loan Proration Policy

   Loan proration impacts undergraduate students applying for graduation who are receiving Federal Direct Subsidized and Unsubsidized Loans.

   Federal regulations require schools to prorate the Federal Direct Loan amounts for graduating undergraduate students when their final period of enrollment is less than a full academic year. The loan limit proration determines the maximum loan amount that a student may borrow for the final term of study based on the degree they are earning.

    

    

3. Are there fees for my Direct Loan?

   For all Direct Subsidized Loans and Direct Unsubsidized Loans with a first disbursement date on or after October 1, 2021 and before October 1, 2022, the origination fee is 1.057%.

4. When will I receive my loan money?

   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.

   In accordance with federal regulations, no loan money may be released sooner than ten days prior to the beginning of a semester. HOWEVER, 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 Direct Loan funds, you must be enrolled at least half time (6.0 units)! Please note! The start date of your classes will affect when you will receive your student loan. Please refer to your registration or the Class Schedule to determine the start date of your classes. 

5. How do I receive my loan money?

   The Direct Loan funds are delivered to the student through the San Mateo County Community College District. The Financial Aid Offices at College of San Mateo, Cañada College, and Skyline College offer students a financial aid disbursement service through BankMobile Disbursements, a technology solution, powered by BMTX, Inc. For more information about BankMobile Disbursements, visit BankMobile Disbursements Refund Choices/.

   Cañada College Disbursment 

   College of San Mateo Disbursement 

   Skyline College Disbursement 

6. Is there a deadline to apply for a Direct Loan?

   Yes.  Deadline dates are listed on the Supplemental Direct Loan Form. 

7. When do I pay my Direct Loan back?

   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. The Exit Counseling Guide   will provide a complete picture of your loan repayment options.

 

Payment Plans

There are two types of payment plans for federal student loans: fixed and income-driven. On a fixed repayment plan, your total principal balance is broken up into regular monthly payments that are designed to see your loans paid off within a fixed number of years. On an income-driven repayment plan, your income and family size determine your monthly payment amounts. For more information, please watch the Federal Student Aid's video guide on student repayment plans.

Student Loan Repayment Options

At the San Mateo County Community College District (SMCCCD), we recognize that student loans are sometimes necessary to help cover the cost of attending college. However, since student loans must be repaid, it's essential to borrow responsibly. Below is an overview of repayment options available to borrowers, along with tips for getting your student loan out of default.

Available Repayment Plans:

1. Standard (Level) Repayment:
   This plan divides your principal and interest into equal monthly payments, typically over 10 years. Monthly payments begin at a minimum of $50. Learn more about Standard Repayment.
2. Income-Driven Repayment (IDR) / Income-Based Repayment (IBR):
   Under this plan, your monthly federal loan payments are capped based on your income and family size. Additionally, loan forgiveness is available for borrowers who remain in the program for 20 or more years (or 10 years for those working in government, non-profit, or public service). The lower your income, the lower your monthly payment will be. Learn more about IDR/IBR.
3. Pay As You Earn (PAYE):
   PAYE is available to borrowers who have a high student loan debt relative to their income. It caps monthly payments at 10% of discretionary income and offers loan forgiveness after 20 years of payments. Most Direct Loans (excluding Direct PLUS Loans for parents and Direct Consolidation Loans) are eligible. PAYE is available to borrowers who first took out loans after October 1, 2007, and took out a loan after October 1, 2011. Learn more about PAYE.
4. Extended Repayment Plan:
   This plan allows you to extend your repayment period beyond 10 years, lowering your monthly payment amount. Learn more about Extended Repayment.

 

Tips for Getting Your Student Loan Out of Default

If you are a borrower with a defaulted loan, it is important to act quickly. Default generally occurs on federal student loans when payments are missed for 270 days. During the delinquency period, the lender attempts to contact the borrower. If the borrower is unreachable or does not make payments, the loan will be placed in default. Avoiding default is crucial, as student loans typically cannot be discharged through bankruptcy.

Consequences of Default:

• Full loan balance due immediately: Both the principal and interest.
• Wage garnishment and withholding of federal or state tax refunds.
• Social Security benefits may be withheld.
• Additional charges, late fees, and collection costs are added to the loan balance.
• Lawsuits may be initiated by the lender.
• Ineligibility for further student aid until the loan is resolved.
• Damaged credit score, which could affect your ability to secure future loans, mortgages, or car financing.
• Loss of eligibility for loan deferments (such as for in-school status, unemployment, etc.).

 

How to Get Out of Default:

To regain eligibility for federal student aid, borrowers in default must make satisfactory repayment arrangements with the loan holder. This can be achieved by making at least six voluntary, on-time payments over six consecutive months.

Another option is loan rehabilitation, which helps eliminate the default from your credit report and restores eligibility for federal student aid. To rehabilitate your loan, you must:

• Contact the loan holder to begin the rehabilitation process.
• Make 9 full voluntary payments within 20 days of the due date over a period of 10 consecutive months.

In some cases, borrowers may negotiate a settlement with the collection agency. While this can reduce the total amount owed, it will not remove the default status from your record. Settling may also allow you to waive collection charges.

Lastly, loan consolidation is a viable option. The Department of Education offers a Direct Consolidation Loan process that can assist defaulted borrowers. Visit StudentLoans.gov to apply for consolidation.

Additional Resources for Payment Options:

• Repayment Plans
• Lower Your Monthly Payments
• Forgiveness and Cancellation
• Deferment Options

 

We encourage borrowers to explore their options and take proactive steps toward managing their student loan repayment effectively.

 

Private Loans

Student interested in applying for a private loan are encouraged to seek additional information here:
https://studentaid.gov/understand-aid/types/loans/federal-vs-private

 

Federal Student Aid OMBUDSMAN

If you have a problem or question about your student loan, you can reach out via the Federal Student Aid (FSA) Help Center. If your complaint isn’t resolved, reach out to the FSA Ombudsman Group by logging in, adding information to your existing case, and requesting to escalate to the Ombudsman Group. For more information about the FSA Ombudsman, go to the Office of the Ombudsman FSA webpage or call 877.557.2575.  Further contact information is listed on the webpage.

If you have additional questions, please contact your college's Financial Aid Office.
 

Important Update Regarding Recent Changes In Direct Subsidized Loan Eligibility

On July 6, 2012 the President signed into law the Moving Ahead for Progress in the 21st Century Act (MAP 21). This law places a limit on Direct Subsidized loan eligibility for new borrowers on or after July 1, 2013, and prior to June 30, 2021.

Loans first disbursed on or after July 1, 2021, are no longer subject to the Subsidized usage limit (SULA).

Borrowers were not eligible for Direct Subsidized loans once they received 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 percent limit. For detail information on 150% Loan Limit visit Time Limitation on Direct Subsidized Loan Eligibility For First Time Borrowers.

A first-time borrower was a borrower who had 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 became a first-time borrower.

Student Loan Code of Conduct

The Higher Education Opportunity Act (HEOA) of 2008 requires institutions of higher education to develop and enforce a code of conduct that prohibits conflicts of interest for financial aid personnel. In compliance with this requirement, San Mateo County Community College District (SMCCCD) and its three colleges, Cañada College, College of San Mateo, and Skyline College has created the following code of conduct based on the HEOA of 2008.

Other college employees, officers and agents with responsibilities in respect to educational loans must also comply with this policy.

Ban on Revenue-Sharing Arrangements – SMCCD shall not enter into any revenue-sharing arrangement with any lender or other vendor working with the Financial Aid Office. The college shall not accept any fee or other material benefit in exchange for recommending a lender to its students.

Gift Ban – No SMCCD officer or employee with financial aid responsibilities shall solicit or accept a gift (e.g., a gift of services, transportation, lodging or meals, provided by purchase of a ticket, payment in advance or reimbursement) having a monetary value of more than a nominal amount from lenders, guarantors or servicers of education loans.

Contracting Arrangements Prohibited – No SMCCD officer or employee with financial aid responsibilities shall accept from any lender or lender affiliate any payment or other financial benefit as compensation for any type of consulting arrangement or other contract to provide services to a lender.

Interaction with Borrowers – SMCCD shall not automatically assign a particular lender to any borrower and shall not refuse to certify or delay certification of any loan based on the lender or guarantee agency selected.

Prohibition on Offers of Funds for Private Loans – SMCCD shall not request or accept from any lender an offer of funds to be used for private education loans in exchange for the college providing the lender with a specified number or volume of loans made or in exchange for placement on a preferred lender list.

Ban on Staffing Assistance – SMCCD shall not request or accept from any lender any assistance with call center staffing or financial aid office staffing. Lenders, however, may provide professional development training to financial aid administrators, educational advising materials to borrowers or assistance in state or federally-declared natural disasters.

Advisory Board Assistance – All SMCCD employees with financial aid responsibilities shall be prohibited from receiving anything of value from a lender or guarantor in return for service on its advisory board. Reimbursement for reasonable expenses incurred in connection with such service, however, is permitted.