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Direct Loans

Contact Us

Building 400, Room 425
Main Campus

4000 Suisun Valley Road,
Fairfield, CA 94534
financialaid@solano.edu
707-864-7103

Federal Direct Loans

Solano Community College participates in the U.S. Department of Education Federal Direct Loan Program that offers eligible students Federal Direct Subsidized and Unsubsidized Loans to help pay for college expenses.

Attention: On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law, resulting in changes to federal direct student loans limits, repayments, and loan amount adjustments based on enrollment units. 

What is changing according to the OBBBA?

Loan Proration Based on Enrollment

Half time Students Note Rules Before July 1, 2026 Rules After July 1, 2026
Part-time loan amounts Major change A part-time student could borrow the same amount as a full-time student. Loan amounts are prorated based on enrollment level. Half-time students may receive approximately half the full-time loan amount

 

Please click the link below to view the loan proation example that illustrates how federal loan amounts may be prorated based on a student’s enrollment level under the OBBBA changes.

View the Loan Proration Example Chart

Please note: The chart above is for Illustrative Purposes ONLY we are waiting for the U.S. Department of Education to publish an official loan proration chart. 

Student Borrowers

Loan Type Note Rules Before July 1, 2026 Rules After July 1, 2026
Loan eligibility duration Major change Students could borrow for as long as they remained enrolled in 6 or more units and met all other eligibility criteria. Loan eligibility tied to program length. A two-year program may receive up to two years of federal loans, even if they have not completed their program.
Dependent Undergraduate aggregate loan limits (subsidized and unsubsidized) No change $5,500 to $10,500 per year, depending on year in school. $31,000 (not more than $23,000 can be subsidized) lifetime limit.  Annual and lifetime limits unchanged. 

Independent Undergraduate aggregate loan limits (subsidized and unsubsidized)

 No change $5,500 to $10,500 per year, depending on year in school. $57,500 (not more than $23,000 can be subsidized) lifetime limit Annual and lifetime limits unchanged. 

 

Existing Loan Borrowers

Students who were enrolled and borrowing before July 1, 2026, may keep their existing loan limits for up to three years or until they finish their program, whichever comes first. This is known as the legacy provision.

Loan Update Note Rules Before July 1, 2026 Rules After July 1, 2026
Legacy provision    (interim exception) New Rule Not applicable. The legacy provision was not in effect.  Students with at least one federal loan disbursed before July 1, 2026, may continue under the previous loan rules for up to three years or until program completion, whichever comes first. Protection may be lost if the student withdraws, transfers programs, or exceeds the program’s expected length.

Getting Started

You must complete ALL Eligibility Requirements before requesting a loan:

  1. Submit a FAFSA application and have it on file at the college.
  2. Must be enrolled in at least 6 or more. 
  3. Must meet Satisfactory Academic Progress (SAP) rules or have an approved SAP/Max. Time Frame Appeal.

Request a Loan in 4 Steps

Follow these steps when requesting a 2026-27 Direct Stafford Loan. For more detailed information, look at the FAQs.

Please download and review the Smart Borrower Presentation.

After reviewing it, please fill out the Quiz Confirmation.

Please call our office at (707) 864-7103 if you have any questions about the Loan process.

Sign the Master Promissory Note with the Department of Education using your FSA User I.D. and password:

 

Complete the Direct Stafford Loan Entrance Counseling at:

Complete Direct Loan Request:

 

Understanding Federal Direct loans:

What is a Federal Direct Loan?

A federal direct loan is money you borrow from U.S. Department of Education to help pay for your educational expenses. Unlike grants or scholarships, a loan must be repaid, with interest, after you leave school, graduate, or drop below at least half-time enrollment. 

 

What is the difference between Subsidized and Unsubsidized loans?

Direct Subsidized Loans

A Direct Subsidized loan is a need-based federal student loan available for eligible undergraduate students who demonstrated a student financial need  based on the information provided on the FAFSA application.

Your school determines your loan eligiblity, and calculates the amount you may borrow based on federal loan limits.

The amount may not exceed you borrow cannot exceed your financial need.


The U.S. Department of Education pays the interest on a Direct Subsidized Loan:

  • While you’re in school at least half-time.
  • During the first six month grace period* after you graduate, leave school, or drop below half-time enrollment.  
  • During approved periods of deferment, when a loan payment is temporarily postponed. 

 

Direct Unsubsidized Loans 

A Direct Unsubsidized Loan is a non-need based federal student loan for eligible undergraduate  students. Financial need is not required to qualify. Your school determines your eligibility and calculates the amount you can borrow based on your cost of attendance, federal loans limits, and other financial aid you receive.

You are responsible for paying interest on a Direct Unsubsidized Loan during all periods including:

  • While you’re enrolled in school. 
  • During the first six month grace period* after you graduate, leave school, or drop below half-time enrollment.  
  • During approved periods of deferment or forebearance.

If you choose not to pay the interest while you are in school and during grace period, deferment or forbearance,  and deferment or forbearance periods, the unpaid interest will accrue (accumulate) and be capitalized, meaning it will be added to the principal balance of your loan. This increases the total amount you will repay over the life of the loan.

 

*Note:

If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

  • Effective July 1, 2013, Public Law 112-141 added a new provision to the Direct Loan statutory requirements that limits a first –time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower’s educational program (“the 150% limit”). Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150 percent limit to lose the interest subsidy on their Direct Subsidized Loans.

 

Loan Serivcers

What is a Loan Servicers?

Students who are awarded with a loan will have a loan service company assigned to them by the U.S. Department of Education to manahe your student loans that have been disbursed to you. Your loan service will be your primary contact throughout the life of your loan

Your loan service can assistance you:

  • Processing your monthly loan payments.
  • Explaining your repayment options.
  • Applying for deferment or forbearance if you qualify.
  • Enrolling in an income-driven repayment plan.
  • Answering your questions about your loan balance, interest, and payment history.
  • Updating your contact information.
  • Helping you avoid delinquency or default.

For information about Loan Servicers, please click here

 

Loan Deferement:

The Financial Aid Office at Solano does not complete or sign loan deferment forms.

If your loan servicer requires proof of enrollment, you can obtain your enrollment information electronically through the National Student Clearinghouse. If a paper enrollment verification is required, please contact the Admissions & Records Office for assistance.

Please submit all Loan Deferment Forms directly to:

National Student Clearinghouse
2300 Dulles Station Blvd, Suite 300
Herndon VA 20171

Phone: 703-742-4200
Fax: 703-742-4239
Website Address: www.studentclearinghouse.org

FAQs

A student loan is money you borrow for educational purposes that you must pay back with interest. The specific sum of money you borrow is called the principal. Interest is a percentage of the principal which you pay as a fee for borrowing. When it comes time to pay back the principal and interest, you usually pay in monthly installments. If you fail to repay (or default), the government will penalize you. Seeking part-time employment and applying for scholarships is highly recommended, as Direct Student Loans are monies that must be repaid.

All qualified financial aid students may borrow through the Direct Loan Program. The Direct Loan allows students to borrow directly from the U.S. Department of Education through the school. It includes subsidized and unsubsidized loans.

  • “Subsidized” Direct Loan:

    Based on financial need. Need is determined by subtracting the Expected Family Contribution (determined by federal formula) and all other forms of aid from the Cost of Attendance (COA). For Direct Student Loans with disbursements made on or after July 1, 2012, and before July 1 2014, interest will immediately begin to accrue as soon as the student is no longer enrolled in at least half-time status (6 or more units). The federal government will not pay the interest during the six-month grace period. Beginning July 1, 2012, the interest will be the responsibility of the student.

    New federal regulations were implemented for first time borrowers effective July 1, 2013. This new regulation requires subsidized loan amounts to be prorated for all first time borrowers. (Students who do not currently owe ANY principal, interest or balance on any subsidized loans)The annual maximum loan amount an undergraduate student may receive must be prorated when the borrower is:

    • enrolled in a program that is shorter than a full academic year; or
    • enrolled in a program that is one academic year or more in length, but is in a remaining period of study that is shorter than a full academic year.

    Enrollment status is defined as your number of units you are enrolled in during the course of the semester.
    1. Full time = 12 units or more
    2. 3/4 time = 9 to 11.50 units
    3. 1/2 Time = 6 to 8.5 units

    New Federal Change for Loan Borrowers “150 Percent Change”:
    Effective for all loans originated after July 1, 2013, Federal Law now limits eligibility for subsidized loans to 150 percent of the length of the student’s academic program. The 150 percent change means students in a two-year program will be eligible for subsidized student loans for the equivalent of three years. The student who reaches this limitation could continue to receive unsubsidized Stafford loans if he or she is otherwise eligible.

    The new limitation affects new borrowers on or after July 1, 2013. Since only periods for which the student received subsidized loans appear to count, the 150 percent limit would only include periods of borrowing that began on or after July 1, 2013. For transfer students who were enrolled in more than one educational program that began on or after July 1, 2013, the limitation would be calculated by taking the difference between 150 percent of the published program length of the longest educational program in which the borrower was enrolled and any periods of enrollment in which the borrower received a subsidized Stafford loan.

    Once a borrower has reached the 150 percent limitation, his or her eligibility for an interest subsidy also ends for all outstanding subsidized loans that were disbursed on or after July 1, 2013. At that point, interest on those previously borrowed loans would begin to accrue and would be payable in the same manner as interest on unsubsidized loans.

    NOTE: New Federal regulations were implemented for first time borrowers effective July 1, 2013. This new regulation requires subsidized loan amounts to be prorated for all first time borrowers. (Students who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan as of July 1, 2013) Proration is calculated on the number of units a student is enrolled in for each semester a student requests a loan.

     

  • “Unsubsidized” Direct Loan:

    Not based on financial need and is available to you regardless of income. Because this loan is not subsidized by the government, you are responsible for all interest which accrues during in-school, grace and deferment periods. You may choose to make periodic interest payments to prevent having the accrued interest capitalized (added onto) the principal loan amount.

  • Default status:

    Students who are in default on a student loan are not eligible for any Title IV financial aid programs. Students who owe a repayment to any Title IV financial aid program are not eligible for any Title IV financial aid programs until they provide proof that they have cleared their overpayment.

  • Non-Degree Status:

    Students must be enrolled at Solano Community College in a degree or certificate program to be eligible to apply for student loans.

  • Enrolled less than half-time (6 units):

    Students must be enrolled in and attending Solano Community College at least half-time (6 units) for the entire loan term.

  • Lack of Satisfactory Academic Progress

    Students must maintain Satisfactory Academic Progress. SAP must be a minimum of 67%, GPA must be 2.00 or better.

  • Processed file

    Student loans are not certified until your financial aid file has been processed. A completed file is necessary to determine your maximum loan eligibility.

2023-2024 Aid Year:

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 is 5.50%

Here is a sample repayment plan for typical amounts borrowed at Solano College. This sample plan assumes that you will go on to complete four years of school, so the subsidized loans (which do not accrue interest while you are in school) have lower payments than the unsubsidized loans which accrue interest throughout the four years of school.  Note that standard repayment plans have a minimum $50 payment; this comparison shows how much a given loan would add to your total payments if you took out multiple loans.  

To explore repayment options using your specific details, visit Federal Student Aid’s Loan Simulator.

Chart:

Sample Direct Loan Repayment Schedule

Loan Type

Loan Amount

Interest Rate (2023-24)

Grace Period (interest accrues, but no payment required)

Repayment period (standard plan)

Estimated Monthly Repayment Amount

Estimated Total Repayment Amount

Subsidized

$3,500

5.50%

6 months

120 months (10 years)

$38 / month

$4,560

Subsidized

$4,500

5.50%

6 months

120 months (10 years)

$49 / month

$5,880

Unsubsidized

$2,000

5.50%

6 months

120 months (10 years)

$27 / month

$3,240

Unsubsidized

$6,000

5.50%

6 months

120 months (10 years)

$81 / month

$9,720

2023-2024 Aid Year:

For all Direct Subsidized and Unsubsidized Loans with a first disbursement date on or after October 1, 2020 and before 10/1/2024, the origination fee is 1.057%

To be eligible for a Direct Student Loan you must:

  • Have a completed Financial Aid file including determination of Pell Grant eligibility.
  • Must be a U.S. citizen or Eligible Non-Citizen as determined by the FAFSA application.
  • Complete the Direct Stafford Loan Entrance Counseling, sign the Master Promissory Note, and submit the Solano Community College four page Loan request, along with current student Educational Plan and valid photo I.D.
  • Be attending at least half-time (6 +units) for the entire loan period.
  • Solano Community College will fund up to three full year loans, provided the student has completed at least 24 units between each loan, and SAP requirements have been met.
  • Not be in default on any type of student grant.
  • Not owe a repayment on a federal student grant.
  • Be in compliance with Solano Community College’s Satisfactory Academic Progress requirements.

Although you may have previously signed a Master Promissory Note (MPN) to receive the Federally Funded Education Loan, (FFEL) a prior MPN cannot be used to make Direct Loans. The MPN is a legal document through which you promise to repay your Direct Loans and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loans. A Direct Loan MPN can be used to make loans for up to ten (10) years. You may complete a Direct Loan MPN electronically via the webpage link below. You must have a a FSA ID (user name and password). The FSA ID (user name and password) used to complete the Free Application for Federal Aid (FAFSA).

How much you can borrow each year depends on your cost of attendance, other financial aid received, and grade level. However, the maximum subsidized amount for a grade level 1 student is $3,500. The grade level 2 subsidized maximum is $4,500. See the Financial Aid Office for details on grade level definition.

Direct Loan Maximums
Annual Limits (Effective July 1, 2008). Maximum amounts for each year of study:

Annual Federal Direct Student Loan Limits
Academic Level Dependent
Subsidized + Unsubsidized = Total		 Independent
Subsidized + Unsubsidized = 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

Aggregate limits Maximum amounts over academic career

  • Dependent undergraduates: $23,000 – $31,000
  • Independent undergraduates: $23,000 – $57,500

*Annual loan limits increased as of July 1, 2008. Please review your aggregate loan totals online at www.nslds.ed.gov. You will need your Federal Student Aid PIN number to access this site. If you borrow the annual maximum every year, you may reach the aggregate limit before you have completed your educational goal. The site may not yet include your most recent loan.

**Enrollment status is defined as your number of units you are enrolled in during the course of the semester.

  1. Full Time = 12 units or more
  2. 3/4 time = 9 to 11.50 units
  3. 1/2 time = 6 to 8.50 units

**NOTE: New Federal regulations were implemented for first time borrowers effective July 1, 2013. This new regulation requires subsidized loan amounts to be prorated for all first time borrowers. (Students who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan July 1, 2013.) Proration is calculated on the number of units a student is enrolled in for each semester a student requests a loan.

*Annual loan limits increased as of July 1, 2008. Please review your aggregate loan totals online at www.nslds.ed.gov. You will need your Federal Student Aid PIN number to access this site. If you borrow the annual maximum every year, you may reach the aggregate limit before you have completed your educational goal. The site may not yet include your most recent loan.

Loan funds are sent in multiple disbursements and are refunded to your My Solano student account. Your first disbursement will be 30 days after your initial semester begins, contingent upon the date the loan request was submitted and processed. If the loan is for one semester, federal regulations require two disbursements to be made within that semester.

You will continue to receive information from your lenders about your previous student loans. Solano Community College will provide enrollment information to your lenders to maintain your in-school status while you are in school. (You need to be enrolled in at least six units); However, if you encounter problems placing your loan on deferment status, contact Admissions and Records Office.