Federal Direct Stafford Student Loan Program
College of the Canyons participates in the Federal Direct Stafford Student Loan Program funded by the Federal government. Federal law requires that a student borrower must be enrolled at least half-time, defined as 6.0+ units per semester.
What is a Federal Direct Stafford Student Loan?
Federal Direct Stafford Student loans are one form of student "self-help" financial aid. A Federal Direct Stafford Student Loan is money borrowed, that must be repaid with interest, to help you pay for your college expenses.
What is the difference between a subsidized and an unsubsidized loan?
There are two types of Stafford Loans: Subsidized and Unsubsidized. Your unmet financial need, calculated by your cost of attendance (COA) minus your estimated family contribution (EFC), determines which type of Stafford Loan you qualify for.
For the Federal Direct Stafford Subsidized Student Loan, the federal government pays the interest on your Subsidized Loan while you are in school and during the six-month grace period after you leave school. Students must have unmet financial need to qualify for a Subsidized Loan.
Important change to Subsidized loan program: For all new borrowers who receive a loan on or after July 1, 2013 a 150% limitation is in effect. This means a student who is eligible for a subsidized loan will reach their subsidized limit at 150% of your program's published length. For instance, a student who is in an associate degree program, the 150% limitation is equivalent to 3 years. Once a student has reached their 150% limitation, their interest subsidy Loan limit will end on all outstanding loans that were disbursed after July 1, 2013, and interest will begin to accrue. Students are therefore encouraged to complete their program on a timely basis.
For the Federal Direct Stafford Unsubsidized Loan, the government does not pay the interest while a student is in school as it does for the subsidized loan. Unsubsidized loans have no interest subsidy, which means that you are responsible for paying the loan interest while you are in school. You may choose to postpone your interest payments, but any accrued interest will be added to your original loan amount. This is called capitalization. Independent students, those not required to report parental income and benefits, have Unsubsidized Loan borrowing limits in addition to the Subsidized loan limits for each academic year. Unsubsidized loans are not need-based; therefore the loan amount cannot exceed your cost of attendance minus your EFC, including any subsidized loan amount awarded.
What are the interest rates with Stafford Student loans?
The interest rate for Federal Direct Stafford Loans for Undergraduate Students first disbursed on or after July 1, 2022 and before July 1, 2023 have a 4.99% interest rate. The interest rate for Federal Direct Stafford Loans for Undergraduate Students first disbursed on or after July 1, 2023 and before July 1, 2024 have a 5.50% interest rate. The interest rate for a student and/or parent PLUS loans are listed online on studentaid.gov/interest-rates.
What are the fees associated with Stafford Student loans?
The federal government charges a 1.057% loan origination fee for Stafford Student Loans first disbursed on or after October 1, 2020 and before October 1, 2024. The loan fees or loan origination fee for a student and/or parent PLUS loans are listed online on studentaid.gov/interest-rates.
How do I apply for a Federal Direct Stafford Student loan?
All students who wish to borrow a Federal Direct Stafford Student loan must complete a Free Application for Federal Student Aid (FAFSA) AND your financial aid eligibility must already be determined BEFORE you can apply for a loan and complete the loan activation steps. To view your financial aid eligibility, log into My Canyons at my.canyons.edu and click on "Financial Aid Status". Federal Pell Grant eligibility must be determined first before we will determine your loan eligibility or before we will process your Direct Loan application. This is to ensure that you get any grant money you are eligible for before choosing to borrow through the Stafford Loan Program.
Borrowing Limits
College of the Canyons has a responsibility to evaluate all student loan requests on a case-by-case basis and the Federal authority [HEA Sec. 479(A)(c), 34 CFR 685.301(a)(8)] to reduce or deny loan requests for students that, in our professional judgment, are at serious risk for loan default. High levels of indebtedness (including loans from other colleges), coupled with a small amount of progress in an academic program, are common indicators of high risk for default. After evaluation, your loan request may be denied or reduced if you:
- Are not meeting College of the Canyons satisfactory academic progress standards.
- Have already borrowed the maximum appropriate amount at a 2 year college. (We suggest $25,000 - including loans from other colleges).
- Appear to be in default or delinquent on financial obligations.
- Have an incomplete or missing Direct Loan Request Worksheet.
Direct Loan Servicing Center and Borrower Services Department
For information on your Direct Loan account, to consolidate, make a payment, and more. Login to StudentLoans.gov
Loan Limits
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Grade Level Subsidized & Unsubsidized
(base amount)Additional Unsubsidized Total Loans 1st Year Student
(0 - 29 units completed)$3,500 $2,000 $5,500 2nd Year Student
(30 + units completed)$4,500 $2,000 $6,500 -
Grade Level Subsidized & Unsubsidized
(base amount)Additional Unsubsidized Total Loans 1st Year Student
(0 - 29 units completed)$3,500 $6,000 $9,500 2nd Year Student
(30 + units completed)$4,500 $6,000 $10,500 -
Grade Level Subsidized & Unsubsidized
(base amount)Additional Unsubsidized Total Loans Dependent Undergraduate Student
$23,000 $8,000 $31,000 Independent Undergraduate Student
$23,000 $34,500 $57,500