A Federal Direct Student Loan is financial aid that must be paid back with interest. Butte College participates in the Federal Direct Loan Program. Direct loans are low-interest education loans for students to help pay for college costs. There is no credit check or cosigner required to qualify. The lender is the U.S. Department of Education, which assigns loans to one of its contracted loan servicers throughout the country after a loan is originated by a school for a student. You can find out who your loan servicer is two weeks after your first loan disbursement is issued by the school.
Go to https://studentaid.gov to see your loan servicer contact information and to keep your information updated with them. Your loan servicer will be responsible for any questions you have for your loan after the funds have been distributed.
Federal student loans are long-term obligations. Accepting a loan means accepting the responsibility for repaying the money you borrow including interest costs and fees. Before you request a loan, make sure you find out the true costs, interest rates, and how long it will take to repay the loan. To get answers to these questions and more, go to https://studentaid.gov
You can also find more information regarding interest rates , how to apply for a loan, repayment plans, deferments, forbearance, consequences of default and much more, go to https://studentaid.ed.gov or visit the Butte College Financial Aid office and ask questions.
To get free help with your loan options, go to www.ECMC.org
1. Entrance Counseling -Entrance Counseling is required of ALL first time or returning borrowers and is completed as a part of the of the Butte College Federal Direct Loan request process. Without Entrance Counseling your loan will not be linked between the Department of Education and Butte College and will not disburse. For more information visit https://studentaid.gov
2. Exit Counseling -Exit Counseling is required of borrowers when the borrower drops below 6 units during a semester or stops attending, completes just one semester, or when a student completes their program of study at Butte College or transfers to another school. For more information visit https://studentaid.gov
To request a Federal Direct Student Loan Request:
1. Log into your MYBC Self Service Student Portal
2. Click on the “Financial Aid” tab
3. Click on “Student Forms” in the Resources column on the right
4. Click on "Manage Requests" in the upper right-hand corner
5. Choose "Federal Direct Loan Request" and the ‘+’ for which year you are requesting (i.e. Fall 2024 and Spring 2025 would be the 2024-2025 year)
6. The task will be assigned in your portal. Open the task and complete the form. When complete, make sure to click the Submit button
To AVOID DELAY in receiving funds, you must complete the following before completing and submitting the online Federal Direct Loan request form:
Students who do not meet these eligibility requirements cannot apply for a student loan or will be subject to a delayed processing. Please plan accordingly.
What kinds of problems could cause my loan to be delayed, reduced or cancelled?
Enrolled less than half-time (6 units)
Students must be enrolled in and attending Butte College at least half-time (6 units) for the entire loan term. Open Entry/Open Exit and late-starting courses must be added by freeze dates to count toward loan eligibility.
Lack of Satisfactory Academic Progress
Student loan debt is an issue for individuals and well as a national concern. The federal government has set a maximum amount that undergraduates may borrow. Since "undergraduate" includes all course work through a Bachelor's degree, it is important not to "over-borrow" at the community college level.
High Debt Load Management. For a student enrolled at Butte College, pursuing an Associate degree or Certificate of Achievement, the college considers the following amount totals to be excessive debt load for a student attending community college:
| Dependent Students | Debt load of $12,000 in all loans (including all prior loans) |
| Independent Students | Debt load of $21,000 in all loans (including all prior loans) |
Students who have reached these debt loads are considered High-Risk Borrowers and are subject to delay, reduction, or denial of their loan request. Please plan accordingly for a delayed loan review.
Federal regulations require loans to be released in at least two payments.
Subsidized Direct Loan is awarded on the basis of financial need. Unmet "need" is determined by subtracting the Student Aid Index (SAI) and all other forms of aid from the Cost of Attendance (COA), or budget. Interest is paid for you by the federal government while you are enrolled in school at least half-time and during periods of authorized deferment. The federal government "subsidizes" your loan, by paying the interest during these periods.
COA - SAI - all other aid (grants + scholarships + work-study) = Subsidized Loan eligibility up to annual limit (see annual limits below)
Unsubsidized Direct Loan is not awarded on the basis of need and is available to you regardless of income. Interest will be charged from the time the loan is disbursed until it is paid in full. You may choose to make periodic interest payments or opt to have the accrued interest capitalized (added on) to the principal loan amount.
COA - all other aid (grants + scholarships + work-study = Unsubsidized Loan eligibility up to annual limit (see annual limits below)
Your grade level affects how much you can borrow. The annual maximum subsidized amount for a student with up to 29 units is $3,500. The annual maximum subsidized loan for a student with 30 or more units is $4,500. See the table below for grade level definitions.
2024-2025 ANNUAL Federal Direct Loan LimitsYou are an Independent student if you were not required to provide parental information when completing the FAFSA. Dependents whose parents are unable to borrow under the PLUS program will be treated as Independent for loan purposes.
Combined Federal Undergraduate Loan Limits*Interest rates and fees are adjusted by Congress and begin July 1 for each academic year. As per changes authorized by the Bipartisan Student Loan Certainty Act of 2013, the Direct Loan interest rate will be the sum of a uniform "index rate" plus an "add-on" that varies depending on the type of loan and the borrower's grade level. The interest rate for a loan, once established, will apply for the life of the loan -- that is, the loan is a fixed-rate loan. As a result, student borrowers who borrow in more than one award year will likely have a number of fixed-rate loans, each with a different interest rate. Loans borrowed in the academic year 2013-2014 had a 3.86% interest rate for Subsidized and a 3.86 % interest rate for Unsubsidized.
Interest. Loans must be repaid in full. In addition to the principal (the amount you borrow), interest accumulates on the loan as an expense paid by the borrower for the use of the money. The expense is calculated as a percentage of the unpaid principal amount.
Origination Fees. All loans have loan fees (also called origination fees) that are deducted proportionately from each loan disbursement you receive. This means that the money you receive will be less than the amount you actually borrow. You are responsible for repaying the entire amount.
An origination fee will be automatically deducted before disbursement.
Butte College School Code
006972
