Federal Direct Loans
Federal Direct Loans (FDL) are federal funds that a student borrows from the Department of Education and must be repaid. The FAFSA determines a student's financial need, and therefore, what type of loan(s) a student is eligible for.
- Federal Direct Loans are low-interest loans for students and parents to help pay for the cost of a student's education after high school.
- The lender is the U.S. Department of Education (the Department), but... the entity you deal with, your loan servicer, can be a private business.
- Visit www.studentaid.gov for more information about types of Federal Direct Loans.
- Student loans are a serious commitment, you are required to pay them back even if you drop out, do not complete your education, or are unsatisfied with the education you receive.
- You are not required to borrow the maximum amounts.
- For Parent loans, at Cuesta College we require a student to borrow the maximum amount they are eligible for first, and if a parent loan is approved it will be applied second. To apply please visit www.studentaid.gov
A student must meet the following criteria to be eligible for Federal Direct Loans:
- Complete a FAFSA
- Be enrolled in a minimum of 6 units per semester in a program leading to a degree, certificate, and/or transfer
- Maintain Satisfactory Academic Progress (SAP)
- Not be delinquent or in default on any previously borrowed Federal Student Loans
- Not be in overpayment on any previously received Pell Grant
- Not exceeding annual or aggregate loan limits from prior loan usage
Depending on your financial need as determined by the FAFSA, there are two types of Federal Direct Loans you are eligible for:
- Subsidized Loan: A need-based loan program in which the loan interest is subsidized (paid) by the Department of Education while a student is in school at least half-time or during periods of deferment
- Unsubsidized Loan: A non-need-based loan program in which the loan interest accrues (is charged) upon disbursement of the loan
A student may be eligible for both loan types or only the Unsubsidized Loan based on financial need.
- Submit a FAFSA
- Complete Your Financial Aid File
- Complete the following steps below, according to your status; First-time Borrowers or Continuing Borrowers. Only fill out one form.
- The school will determine what loan types and the actual loan amounts you are eligible to receive each academic year. However, there are limits on the amounts of subsidized and unsubsidized loans you can borrow each academic year called 'annual loan limits' and the total amounts you can borrow as an undergraduate called 'aggregate loan limits.'
- Loan limits vary depending on: what year you are in school and whether you are a dependent or independent student.
** Please note, The Financial Aid Office may also limit an individual student's approved loan amount based on a number of factors:
- Cumulative Loan Debt
- Rate of Academic Progress
| Year | Dependent Student | Independent Student |
|---|---|---|
| 1st Year Annual Loan Limit | $5,500 (no more than $3,500 may be in subsidized loans) | $9,500 (no more than $3,500 may be in subsidized loans) |
| 2nd Year Annual Loan Limit | $6,500 (no more than $4,500 may be in subsidized loans) | $10,500 (no more than $4,500 may be in subsidized loans) |
| Subsidized and Unsubsidized Aggregate Loan Limit | $31,000 (no more than $23,000 may be in subsidized loans) | $57,500 for undergraduates (no more than $23,000 maybe in subsidized loans) |
- If you need to modify your loan to decrease (If it has already been processed or within 30 days of disbursement) or increase it, complete the electronic Direct Loan Modification Form
- You can cancel all or part of a loan by notifying the Financial Aid Office before your loan is disbursed
- You won’t be charged interest or fees on any portion of a loan that’s cancelled within 120 days of the disbursement date
- You can return loan funds to your servicer more than 120 days after disbursement, but the return will be processed as a pre-payment on the loan, and you’ll be charged interest and a loan fee on the amount you return.
| First-time Borrowers (You have never taken out a Federal Direct Loan before) | Continuing Borrowers (You have already taken out a Federal Direct Loan at Cuesta or another institution) |
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