Federal Student Loans

Federal Student Loans

Federal Subsidized and Unsubsidized Direct Loans are long-term, low-interest loans from the U.S. Department of Education to cover college expenses. At El Camino College, Federal Student Loans are offered during the fall and spring terms and on a case-by-case basis only.

The Federal Subsidized Direct Loan is based on need. The federal government pays the interest on the loan during: (1) your enrollment as at least a half-time (6 credits or more) student; and (2) a deferment, which is a temporary, authorized time when your payments may be postponed.

The Federal Unsubsidized Direct Loan is not based on need. "Unsubsidized" means the federal government does not pay the interest on your behalf. You are responsible for paying all interest on the loan. Interest is charged beginning the day the loan is paid to you until the day the loan is repaid in full. You can choose to pay the accumulated interest while you are in school, or have the unpaid interest capitalized, i.e. added to the principal balance of the loan. Note: If your loan interest is capitalized, it will increase the amount you have to repay.

How to Request a Federal Student Loan

Step 1 Complete the Free Application for Federal Student Aid (FAFSA)®.
Step 2 Turn in all required documents by the Financial Aid Dates & Deadlines. Missing documents are linked in an email sent to your MyECC email account.
Step 3 Receive a Financial Aid Award Letter. You can check your status via MyECC - Student Self Service Financial Aid Portal.
Step 4 Meet Satisfactory Academic Progress (SAP) standards and maintain at least six units of coursework at all times.
Step 5 Complete attendance to a loan workshop and then submit a 2024-2025 Direct Loan Request Form.

What You Need to Know: Federal Direct Student Loans

Loan Repayment is Necessary!

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. Find answers to these student loan questions online.  

Be A Smart Borrower!

You can also find information online regarding interest rates, how to apply for a loan, repayment plans, deferments, forbearance, consequences of default, and much more. Or email the El Camino Financial Aid Office at directloans@elcamino.edu if you have questions regarding your loan.

Entrance Counseling and the Master Promissory Note (MPN)

Entrance Counseling and the Master Promissory Note (MPN) is required of ALL first-time or returning borrowers and is completed as a part of the El Camino College Federal Direct Loan request process. Without Entrance Counseling and the Master Promissory Note (MPN), your loan will not be linked between the Department of Education and El Camino College and will not be disbursed.

Exit Counseling

Exit Counseling is required of borrowers when the borrower drops below six units during a semester or stops attending, completes just one semester, or when a student completes a program of study at El Camino or transfers to another school.

First-Time Borrowers Only: Per Department of Education regulations, the "maximum eligibility period" for subsidized loans may not extend beyond 150% of the published length of a student's academic program (major), as officially described in the El Camino College Catalog.

Examples of How "Maximum Eligibility Period" Works

  • If you are enrolled in an academic program for a two-year associate degree goal, the maximum period for which you can receive Subsidized Loans is three years (150% of 2 years = 3 years).
  • If you are enrolled in a certificate of achievement goal with a published length of one year, the maximum period for which you can receive subsidized loans is one and a half years (150% of 1 = 1½ years).

Because the maximum eligibility period is based on your current academic program, your eligibility can change if you change programs. If you receive subsidized loans for one program and then change to another, the subsidized loans you received for the earlier program will count against your new maximum eligibility period.

Three Components of Current Subsidized Loan Eligibility Policy

  1. Maximum Eligibility Period: 150% of the published length of the academic program (major) in which the student borrower is currently enrolled.
  2. Subsidized Usage Period: Period of time for which a borrower received a subsidized loan.
  3. Remaining Eligibility Period: Difference between the Maximum Eligibility Period and the total of all Subsidized Usage Periods.

Loss of Eligibility for Additional Subsidized Loans

After you have received subsidized loans for your Maximum Eligibility Period, you are no longer eligible to receive subsidized loans. you may receive unsubsidized loans.

Loss of Interest Subsidy: Responsibility for Paying Interest on Subsidized Loans

If you continue to be enrolled in any undergraduate program after you have reached your maximum eligibility period for subsidized loans, the Department of Education will no longer pay the interest that accrues on your subsidized loans. After meeting the 150% ceiling, you become responsible for the interest that accrues on all your subsidized loans from the date of your enrollment. Your loan servicer will notify you if you become responsible for paying the interest.

Regaining Eligibility for Subsidized Loans

A student may again be eligible to receive subsidized loans if enrolled in a new program that is longer than the previous one. In this case, the Department of Education will pay the interest that accrues on any new loans within eligible pay periods.

  • Example 1: A student who borrows for two years to complete a two-year associate degree in three years has reached their maximum eligibility period for a subsidized loan (2 x 150% = 3) and would not be able to receive any additional subsidized loan if they enrolled in another associate degree 
    or certificate program.
  • Example 2: A student who transfers into a four-year bachelor's degree program, however, would still have three years of remaining eligibility for subsidized loans. (150% of a four-year program is six years. The student has already used three years of their subsidized loan eligibility; they have three years remaining.

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. 

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.

Federal Direct Student Loan Interest Rates

  • Subsidized Loans disbursed on or after July 1, 2023 and before July 1, 2024: 5.50%
  • Subsidized Loans disbursed on or after July 1, 2024 and before July 1, 2025: 6.533%
  • Unsubsidized loans disbursed on or after July 1, 2023 and before July 1, 2024: 5.50%
  • Unsubsidized loans disbursed on or after July 1, 2024 and before July 1, 2025: 6.533%

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.

  • The fee amount is 1.057% of the loan.


Federal Direct Loan Borrowing Limits

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.

The information below is general. Your actual loan eligibility may differ based on a number of factors including, but not limited to: borrowing history, budget/cost of attendance, Student Aid Index, other aid/resources received and based on the recommendation of the Financial Value transparency and Gainful Employment regulations.

ANNUAL Federal Direct Loan Limits

Dependent Student Subsidized Unsubsidized Total
1st year (up to 29 units completed) Up to $3,500 up to $2,000 $5,500
2nd year (30+ units completed) Up to $4,500 up to $2,000 $6,500
Federal Direct PLUS denied Additional (Not all students have eligibility for additional )   Up to $2,000 TBD
Independent Student Subsidized Unsubsidized Total
1st year (up to 29 units completed) Up to $3,500 Up to $6,000 $9,500
2nd year (30+ units completed) Up to $4,500 up to $6,000 $10,500

*You 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.

Undergraduate Aggregate Loan Limits*

Student Status Subsidized Subsidized & Unsubsidized
Dependent Student $23,000 $31,000
Independent Student $23,000 $57,500


Questions? Contact Us

Financial Aid

Student Services Building 248 & 229


Business hours SSB-229 (In-Person)

Monday-Thursday: 8 a.m.-5 p.m.

Friday: 8 a.m.-1 p.m.


Business hours Help Desk (Virtual):
Monday-Thursday: 9 a.m.-7 p.m.
Friday: 9 a.m.-3 p.m. 

Online Support: FA Help Desk 


Phone: 669-900-6833

Meeting ID - Enter 640-959-1782#


Email: directloans@elcamino.edu