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‚Äč

Federal Direct Loan Updates

In August 2013, Congress passed and the President signed the Bipartisan Student Loan Certainty Act of 2013. This Act ties federal student loan interest rates to the financial markets. Under the Act, interest rates are determined each spring for new loans being made for the upcoming award year, which runs from July 1 to the following June 30. Each loan has a fixed interest rate for the life of the loan. The following table provides the fixed interest rates for new Direct Loans:

Type of Loan2015-2016 Interest Rate2016-2017 Interest Rate
Direct Subsidized Loans (Undergraduates)4.29%3.76%
Direct Unsubsidized Loans (Undergraduates)4.29%3.76%
Direct Unsubsidized Loans (Graduate or Professional Students)5.84%5.31%
Direct PLUS Loans (Parents and Graduate or Professional Students)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:

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.