Federal Student Loans
Federal Student Loans
Federal Direct Subsidized and Unsubsidized Loans are low-interest federal loans offered by the U.S. Department of Education to help eligible students pay for educational expenses.
At El Camino College, Federal Direct Loans are available during the Fall and Spring semesters and are awarded on a case-by-case basis.
How to Apply |
|
| Step 1 | Complete the Free Application for Federal Student Aid (FAFSA) |
| Step 2 | Register here to attend a Federal Direct Loan Workshop |
| Step 3 | Submit a 2026-2027 Direct Loan Request Form* |
| Step 4 | 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 5 | Review your Financial Aid Offer Letter. You can check your status via MyECC - Student Self Service Financial Aid Portal. |
*Your loan request will be reviewed to determine your eligibility based on federal regulations and institutional policies.
Loan Types
Direct Subsidized Loan
A Direct Subsidized Loan is awarded based on demonstrated financial need.
- Available to eligible undergraduate students.
- The U.S. Department of Education pays the interest while you are:
- Enrolled at least half-time (6 or more eligible units),
- During your six-month grace period, and
- During approved periods of deferment.
- Because the government pays the interest during these periods, subsidized loans generally cost less over time.
Direct Unsubsidized Loan
A Direct Unsubsidized Loan is not based on financial need.
- Available to eligible undergraduate students regardless of financial need.
- Interest begins accruing as soon as the loan is disbursed.
- You are responsible for paying all interest that accrues.
- You may pay the interest while enrolled or allow it to be capitalized (added to your principal balance), which increases the total amount you repay.
What You Need to Know: Federal Direct Student Loans
| Feature | Direct Subsidized Loan | Direct Unsubsidized Loan |
| Based on financial need | Yes | No |
| Interest while enrolled at least half-time | Paid by the government | Paid by the borrower |
| Interest begins accruing | After grace/deferment periods end | Immediately upon disbursement |
| Available to eligible undergraduate students | Yes | Yes |
*Note: All Federal Direct Loans must be repaid. Borrow only what you need to help cover your educational expenses.
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 [email protected] 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
- Maximum Eligibility Period: 150% of the published length of the academic program (major) in which the student borrower is currently enrolled.
- Subsidized Usage Period: Period of time for which a borrower received a subsidized loan.
- 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%
- Subsidized Loans disbursed on or after July 1, 2025 and before July 1, 2026: 6.39%
- 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%
- Unsubsidized loans disbursed on or after July 1, 2025 and before July 1, 2026: 6.39%
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.
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 |
| Third Year + | Up to $5,500 | up to $2,000 | $7,500 |
| 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 |
| Third Year + | Up to $5,500 | up to $7,000 | $12,500 |
*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.
Lifetime Limits
Federal law limits the total amount you can borrow through the Federal Direct Loan Program over your lifetime. These aggregate loan limits include all Direct Subsidized and Direct Unsubsidized Loans you have received for undergraduate study, regardless of the school you attended.
Undergraduate Aggregate Loan Limits*
| Student Status | Maximum Aggregate Loan Limit |
| Dependent Student | $31,000 (no more than $23,000 may be subsidized) |
| Independent Student (and dependent students whose parent is unable to obtain a Direct PLUS Loan due to adverse credit) | $57,500 (no more than $23,000 may be subsidized) |
Lifetime Maximum for New Borrowers (Effective July 1, 2026)
Under the One Big Beautiful Bill Act (OBBBA), new lifetime borrowing limits apply to certain borrowers beginning July 1, 2026.
| Limit | Maximum Amount |
| Annual Limit | $20,000 per dependent student |
| Aggregate (Lifetime) Limit | $65,000 per dependent student |
The $65,000 aggregate limit applies per dependent student, regardless of the number
of parents borrowing on the student's behalf. Once this limit is reached, no additional
Parent PLUS Loans may be borrowed for that student, even if previous loans have been
repaid, forgiven, or discharged.
Questions? Contact Us
Student Serv Bldg. 1st Floor
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Fri | 8:30 am - 1:00 pm
Phone: (310) 660-3593 - Press "3"
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Financial Aid Help Desk (Zoom )
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Email: [email protected]