Federal Stafford Loans

Stafford Loans are federal student loans made available to college and university students to supplement personal and family resources, scholarships, grants and work-study. Stafford loans may be subsidized by the U.S. Government or unsubsidized depending on the student's need.

Federal PLUS Loans

The PLUS loan is for the parents of dependent students. Repayment on PLUS loans begins 60 days after the second disbursement of the loan. View the Direct PLUS Loan Process​

Federal Direct Loan Updates

On May 9, 2018, the U.S. Treasury’s 10-year Treasury note auction resulted in an increase in interest rates for federal student loans disbursed on or after July 1, 2018 and before July 1, 2019. The interest rates will be fixed for the life of the loan.

Since 2013, interest rates on federal student loans have been set annually according to the 10-year Treasury note rate, plus a fixed percentage that differs by loan type (e.g., subsidized Stafford, unsubsidized Stafford, PLUS).

Interest rates for loans first disbursed on or after July 1, 2018 (and before July 1, 2019), along with a comparison of the past two years, are as follows:

Type of Loan2018-19 Rate2017-18 Rate2016-17 Rate
Direct Subsidized Loans (Undergraduates)5.05%4.29%3.76%
Direct Unsubsidized Loans (Undergraduates)5.05%4.29%3.76%
Direct Unsubsidized Loans (Graduate)6.6%5.84%5.31%
Direct PLUS Loans (Graduate and Parents)7.6%6.84%6.31%

How do I apply for a Direct Loan at SMC?

Complete and submit the Free Application for Federal Student Aid (FAFSA) to the federal processor.

  • After SMC receives the information regarding your federal aid application, you will be sent an electronic tracking letter requesting certain documents.

  • While submitting all of the initial requested financial aid documents, download the Loan Documents (SMC Loan Application) from this website.

  • The completed Loan Documents can then be submitted along with an Educational Plan from an SMC Academic Counselor.

Your loan request documents go to a committee for assessment. Students awarded a Direct Loan will be notified with a guidance for completing an Entrance Loan Workshop and a Master Promissory Note through their Corsair Connect financial aid portal.

How long will it take to process a loan application?

Loan request are reviewed on a case-by-case basis. Once the Loan Committee has made a determination, the actual processing of the loan takes 3 to 4 weeks before SMC receives a check.

How much can I borrow for attendance at SMC?

Basic Direct Loan Levels are as follows:

Grade LevelDegree Applicable Units CompletedLoan Limits
Students in Year 10 - 29$3,500
Students in Year 230 - 59$4,500
Students accepted in BA Interactive Design60 - 120$5,500

SMC's Loan Debt Management Plan recommends a cumulative loan threshold of $15,000.

Annual Additional Unsubsidized Stafford Loan limits are:

Student StatusLoan Limits
Dependent Students in Year 1 or Year 2$2,000
Independent Students in Year 1 or Year 2$6,000
Students accepted in BA Interactive Design$7,000

What happens if I transfer to another college during the same academic year?

You must cancel any pending loans at SMC and contact the new college to find out how to be awarded financial aid there including loans.

What is the difference between subsidized and unsubsidized Stafford Loans?

For subsidized Stafford Loans, the Federal Government pays the interest while the borrower is in school, during the 6 month grace period and deferment periods.

When do I have to begin repaying a Stafford Loan?

Repayment begins 6 months after graduating, withdrawing, or dropping to less than half-time enrollment status.

What are the consequences of not repaying a student loan?

  • You will be reported to a credit bureau having a negative effect on your credit rating.

  • You can be referred to a collection agency and have to pay collection costs.

  • Your employer may garnish your wages.

  • The Internal Revenue Service may withhold your state and federal income tax returns.

  • The entire unpaid amount of your loan, including interest may become due and payable immediately.

  • You will lose your rights to deferments.

  • You will be ineligible to receive any additional federal or state financial aid.

Do I have to attend any entrance or exit loan workshops or meetings?

As part of SMC's Default Management Plan, loan recipients are required to participate in a Loan Entrance Workshop each year that they request a student loan. In addition, all student loan recipients are required to attend an Exit Interview each year that they are a loan recipient while attending SMC.

Alternative Loans

Federal student loans are available to most students regardless of income and provide a range of repayment options including income-based repayment plans and loan forgiveness benefits, which other education loans are not required to provide.

Alternative education loans (also known as private loans) are an option for financing your education. Federal, state and university policy requires that student borrowers maximize federal loans before the alternative/private loan request is processed. Complete a Free Application for Federal Student Aid (FAFSA) in order to determine student loan eligibility.

StudentAid.gov provides a federal and alternative/private loan comparison. Here are some things to consider:

  • Alternative loan eligibility requirements vary from lender to lender.

  • Alternative loan lenders can offer variable interest rates that can increase or decrease over time, depending on market conditions.

  • Students may also be required to meet citizenship requirements or provide a co-signer who meets citizenship requirements.

  • The interest rate on a private loan may depend on the borrower’s and/or co-signer’s credit rating.

  • Other eligibility requirements may apply depending on the lender.

  • Review the interest rate and processing fees prior to borrowing.

Santa Monica College is not involved in the alternative loan credit decision. All credit decision questions should be directed to the loan lender. Financial aid eligibility applies to all certifications of loan amounts.

School Certification Process

Financial aid staff will post an alternative loan place holder on Corsair Connect after a loan has been certified. You may contact the lender to confirm funds have been sent to Santa Monica College.