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Loans for Students

Federal Direct Loans for Students

2023-2024 Academic Year
(Fall 2023, Spring and Summer 2024)

The Financial Aid Office has adopted a new process for requesting and submitting Direct Loans. Please follow the instructions carefully. 

There are two types of Federal Direct Loans:

  • Subsidized
  • Unsubsidized

SBCC participates in the Federal Student Loan Programs.  Students with Direct Subsidized Loans have the government pay the interest while the student is enrolled in at least 6.0 units (half time) after they are no longer enrolled the student pays the interest and the principal. For Unsubsidized Direct Loans, the student is responsible for paying all the interest on the loan, during college and after. A student can receive both types of Direct Loans at the same time. Your eligibility to borrow is based on your earned units at SBCC and the factors listed on this page.

SBCC is a two-year institution. Therefore, students are only eligible to apply for a first-year/Freshman or second-year/Sophomore (as determined by the Admissions and Records Office) student loan.

Annual Direct Student Loan Limits are as follows:

  Base Amount Additional Unsubsidized Additional Unsubsidized Additional Unsubsidized
  (All Students) Dependent* Students Dependent* Students whose parents cannot borrow PLUS Independent* Students 
1st Year $3500 $2000 $4000 $6000
2nd Year $4500 $2000 $4000 $6000

* As defined by the Department of Education for financial aid purposes

Factors: Financial need, year in college, time to graduation, dependency status, Satisfactory Academic Progress (SAP), amount previously borrowed, default status, aggregate limits, 6 or more units enrolled, and eligible program.

#1) Complete a Free Application for Federal Student Aid (FAFSA) at studentaid.gov

#2) Submit all documents requested by the SBCC Financial Aid Office to complete your FAFSA application

#3) Receive a financial aid award notification email.

#4) Be enrolled in at least half-time (6 units) per semester.

#5) Log into your Federal Student Aid account (studentaid.gov) to complete the Direct Loan Entrance Counseling and the Direct Loan Master Promissory Note (MPN). The SBCC financial aid office can't process a loan request until the Entrance Counseling and the Master Promissory Note are completed by the student. 

#6) We recommend you complete an Annual Student Loan Acknowledgment each year you accept a new federal student loan. Our goal is to help you understand your loans and how they affect your financial future.

#7) Meeting good standing for Satisfactory Academic Progress (SAP) is required to be eligible for a student loan.

#8) Meet with your Student Program Advisor and they will assist you in completing the Direct Loan Request Form. You can meet in person or via Zoom.


#8) How to submit your Direct Loan Request Form to the Financial Aid Office:
      a. Login to your Online FAFSA Verification account: https://sbcc.studentforms.com
       b. Click on "Manage Requests"
       c. Select the "+"  for the aid year in which the loan is being requested. Note: The Direct Loan Form is aid year specific
       d. Enter the reason why the loan is being requested (such as " to meet my educational expenses" ). After typing the reason you will be redirected to the "Needs Action".
      e. At the Needs Action page click on "Direct Loan Request Form" 
      f. Once in the Direct Loan task click on 'Download' and complete the Direct Loan Request Form
        (electronic and wet signatures are accepted)
      g. Students must also upload the front and back copy of a valid government photo issued ID (unexpired)
      h. Click 'Finish' to submit your Direct Loan Request Form for review.

For step by step instructions on how to request and submit your Direct Loan Request Form click here (instructions are for a-h only)

Processing Time:   At least 14 or more business days depending on loan request volume. Due to the high volume during the first weeks of school Direct Loan request may take four-six weeks to process.

#1) Complete Steps 1 through 8 under "How do I request a Direct Loan?"

#2) To submit your completed Direct Loan Request Form, click HERE. Be sure to include the Direct Loan Request Form and
            front and back of a valid issued government photo ID (unexpired) 

Please note that the financial aid office may contact you for additional phone counseling and/or video chat in order to process your Direct Loan Request.

Processing Time:   At least 14 or more business days depending on loan request volume.

To request a Loan increase please contact your Financial Aid Advisor

For Fall only loan requests you will be required to provide a locked Student Educational Plan (SEP) from an academic counselor confirming your program of study degree including your graduation term and date.

Yes. In some circumstances, Santa Barbara City College can modify or deny a student's loan request. Your loan request may be reduced or denied for the following reasons:

  • Loan request is incomplete
  • Lack of Satisfactory Academic Progress (SAP)
  • Student's educational goal (declared major) is not eligible for federal financial aid
  • Student is not enrolled in at least 6 Units
  • Student appears to be or have been in default or delinquent on financial obligations
  • Student does not understand rights and responsibilities of borrowing a student loan
  • The purpose of the loan is not related to an educational goal at SBCC
  • The purpose of the loan is not related to educational expenses at SBCC
  • Student has already borrowed a maximum appropriate for SBCC programs
    • We recommend not borrowing more than 50% of your undergraduate maximum, e. $15,500 for dependent students and $28,750 for independent students

Yes. An origination fee is charged on all Federal Direct Subsidized and Unsubsidized Loans. For loans first disbursed on October 1, 2020 and before October 1, 2024 is 1.057%. (Subject to change without notice).

Yes. If you accept a Federal Student Direct loan, you will be required to repay that loan with interest. It is important that you understand how interest is calculated and the fees associated with your loan. Both of these factors will impact the amount you will be required to repay: https://studentaid.gov/understand-aid/types/loans/interest-rates

Federal Direct Subsidized and Unsubsidized Loans with a first disbursement for July 1, 2023 – June 30, 2024 is 5.50% (Interest rates update annually). Please note that these rates are determined by the U. S. Department of Education (Subject to change without notice).

Student loans are paid in two equal disbursements during the selected enrollment period.  For academic year loans, the 1st disbursement is paid in fall and the 2nd disbursement is paid at the beginning of the spring semester.  For one-semester loans, the loan is paid in two equal disbursements during the semester. Fall Semester ONLY loan request will require show of proof of graduation (a graduation date on a SEP declared by an academic counselor). 

Loans for the Summer enrollment will be paid in one disbursement. However, you will not receive your loan disbursement until you are actively taking at least 6 units.

In accordance with federal regulations, no loan money may be released sooner than ten days prior to the beginning of a semester, unless you are a first time Direct Loan borrower with the Department of Education.  If you are a first-time Direct Loan borrower, the 1st disbursement will be 30 days after the beginning of the semester.

IMPORTANT!  To receive a disbursement of an approved Direct Loan, you must be enrolled in at least 6 units (half time) for each semester it is intended. Please note! The start date of your classes will affect when you will receive your student loan. Please refer to your registration or the Schedule of Classes to determine the start date of your classes.

You must be in good academic standing. For more information regarding Satisfactory Academic Progress (SAP), click here.  You must complete the Loan Entrance Counseling and Master Promissory Note (MPN) at studentaid.gov.

The Direct Loan is delivered to the student through Santa Barbara City College. Students have two choices of how they receive their disbursement:
  • A check mailed to the address listed in their campus account
  • By direct deposit to a checking or savings account. To sign up for direct deposit, log into your financial aid campus account and click on the link Direct Deposit.
  • If you do not have a stable mailing address and do not have access to direct deposit, you may request that your check be held on the campus for pickup. To do so, please email the Director of Financial Aid, Maureen McRae Goldberg (mmgoldberg@pipeline.sbcc.edu). 
Yes.  Check Deadlines for specific dates.
After graduating, leaving school, or enrolling less than half time, a student will have a six month "grace period" before the first loan repayment is due. All Federal Direct Loans must be paid back with interest. Typically a student will have 10 years to repayment their Direct Loan.  How to find out who and to contact your Federal Student loan lender: https://studentaid.gov/manage-loans/repayment/servicers.

Loan Exit Counseling. You must complete exit counseling when you leave school or drop below half-time enrollment. The purpose of exit counseling is to ensure you understand your student loan obligations and are prepared for repayment:

The U. S. Department of Education has made available Financial Awareness Counseling information. For financial literacy and information about federal student loan debt by visiting: https://studentaid.gov/asla/

Additional facts on Policies and Consumer information

Important Note: Your financial aid can be used to pay college expenses including: enrollment & tuition, fees, textbooks & supplies, off-campus room & board, transportation, and personal expenses. It is important to understand that you are responsible for any expenses your financial aid does not cover.


If you have a problem or question about your student loan, the Federal Student Aid (FSA) Ombudsman of the Department of Education helps resolve disputes and solve other problems with federal student loans.  For more information about the FSA Ombudsman, go to Federal Student Aid Ombudsman Group or call (877) 557-2575.  The mailing address is U.S. Department of Education, FSA Ombudsman Group, 830 1st Street, N.E. Mail Stop 5144, Washington, D.C. 20202-5144.  Fax number (202) 275-0549. 

 If you have additional questions, please contact our office by emailing your financial aid advisor or by calling the financial aid office
at (805) 730-5157.