Federal Direct Loan Program
Grossmont College participates in the Federal Direct Loan Program
(FDLP). All students applying for a loan must have an "Entrance Interview" prior to the receipt of
the loan application and an "Exit Interview" prior to the receipt of the
second check. Exit interviews are required on a yearly basis.
Federal Direct Loans (FDL) are low-interest loans made to students
by the federal government to help students pay for educational
expenses. These loans are insured by the federal government.
The interest rates for
disbursed after July 1, 2013 and
prior to July 1, 2014 is
fixed at 3.86% for Subsidized loans and Unsubsidized loans.
students (0 to 29.5 units completed) may borrow up to $3,500; second year students
(30 or more units completed) may borrow up to $4,500
per academic year. Total borrowing may not exceed $23,000 for all
Students who request a Federal Direct Loan
who are interested in obtaining additional unsubsidized
loans or who have already
borrowed $10,500 or more will be required to meet with their Advisor and/or
Director of Financial Aid for additional loan counseling prior to
certification of any additional loans. The
Director of Financial Aid (or their designee) has the discretion to deny a request for a student
loan on a case-by-case basis.
To apply for a subsidized FDL, a student must first
apply for federal financial aid via the
The student may then complete the on-line Entrance Interview and submit a Loan
Request Form to the Financial Aid Office.
Loan Forgiveness for
Service in Area of National Need: Borrowers may qualify for forgiveness of some (or
all) of their outstanding principal balance on their existing loans if they
agree to serve in an area of national need as defined by the Higher Education
and Opportunity Act.
Subsidized Federal Direct Loan: These loans are available to
students who demonstrate financial need. Students who are eligible to apply
for a subsidized Federal Direct Loan based upon need qualify to have the federal government pay the
interest on their loan while they are in school and during deferment periods.
Tuition payments will not be deferred for Federal Direct Loans. FDL funds will not be disbursed during the first 30 days of each semester.
Payment of principal will not be required while the student is enrolled at
least half-time. Regular monthly payments on both the principal (the amount
borrowed) and the interest (the amount charged for borrowing) will begin six
months after leaving school, dropping below half-time status or graduating.
Depending upon the total amount borrowed, it may take up to ten years to repay
Deferment is available while enrolled at least half-time. Once the initial
grace period ends and repayment begins, deferment for resumption of study
requires full-time enrollment. Units cannot be combined between two colleges
for deferment purposes.
Defaulted Student Loans: If you have defaulted on a student loan, you have
some options. Depending on which one you choose you may regain your
eligibility for financial aid, improve your credit and in some cases remove
the default status from your credit report.
Satisfactory Arrangement to Repay: If you are in default, you are not eligible
to receive federal grants or loans unless you have made satisfactory
arrangements to repay the owners of your defaulted loans. Satisfactory
arrangements to repay means that you must make minimum monthly payments that
are on time and acceptable to the holder of your loan for six months in a row.
Lump sum payments don’t count when determining satisfactory arrangements to
repay; nor do payments that are made involuntarily, such as those due to wage
The owner of your defaulted loan must verify that you have made satisfactory
arrangements to repay. If you default on your student loan, the owner is
generally the agency that guaranteed it. The guarantee agency’s name should be
present on your promissory note and other correspondence made to you after
your loan defaulted. In some cases the owner may be the Department of
Once you receive a letter verifying that you have made satisfactory
arrangements to repay and are authorized to receive additional federal grants
and loans, you cannot miss any more loan payments for any reason. If you do,
you cannot regain eligibility for federal grants and loans a second time using
this option. Satisfactory arrangements to repay will not remove your defaulted
loan from your credit report.
Loan Consolidation: If you are in default, you can return to repayment status
through loan consolidation. To be eligible to consolidate, you must have made
satisfactory arrangements to repay your defaulted loans with the owners of the
loans for three consecutive months. Through this program your eligible federal
education loans can be combined in to one loan. Depending on the size of the
debt, you may have 12 to 30 years to repay your loans. When you consolidate
you regain eligibility for loan deferment. After consolidation, your credit
records will show the loan as paid in full. You are eligible for federal
grants and loan.
Loan Rehabilitation: If you are in default, you can return to repayment status
through loan rehabilitation. Each guarantor is responsible for operating a
Loan Rehabilitation Program for the defaulted loans it owns. Normally, you
would have to make satisfactory repayment for 9 consecutive months. Contact
your guarantor for further information.
Loans Discharged in Bankruptcy: Few people meet the criteria necessary for
having their loans discharged in bankruptcy, so this section may not apply to
you. If your loan is discharged in bankruptcy you remain eligible for federal
education grants and loans.
Borrowers Whose Loans Have Been Canceled Due to Permanent Disability: If your
loan has been canceled due to permanent disability, you can regain eligibility
for federal grants and loans. You must get a signed statement from the doctor
indicating that your condition has improved sufficiently to work and attend
school. You must also acknowledge that future federal loans cannot be canceled
on the basis of any disability present when the new loan is made unless the
disability get significantly worse.
For more detailed
information on all of your student loan options, including repayment and
Direct Student Loans on-line.
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