Federal Direct Loan (Unsubsidized)

This page will be updated for the 2014-2015 school year by August 2014.

Effective with the 2012-2013 school year, San Diego City College (along with San Diego Mesa College and San Diego Miramar College) have been approved by the U.S. Department of Education to participate in an experimental initiative regarding "Overborrowing" that allows our college to reduce or limit Unsubsidized Loan eligibility and borrowing for certain groups or catagories of students.

Based on this initiative, the following groups or categories of students will not be eligible to borrow Unsubsidized Loans:

1st Year Students 

1st year is defined as students who have completed less than 24 units in their current program or major based on their educational plan
Units that will be counted towards the 24 units will be units that fulfill the major, general ed and district requirements for the current program or major based on the educational plan
Units that will not be counted towards the 24 units are units that are basic skills or remedial, ESOL, electives or any other units that are not applicable to the current program or major based on the educational plan

Students Approved on a Finanical Aid Appeal
Students who have an "Unsatisfactory" status (Disqualified) for any reason and who are approved on appeal will not be eligible for an Unsubsidized Loan

Unsubsidized Loan Basic Information for Eligible Students

 

Unsubsidized loans are not recommended for most students. Unsubsidized loans were originally designed for middle income families that didn't qualify for grants or subsidized loans. You must apply for a Direct Subsidized loan before applying for an Unsubsidized loan. The interest rate for Unsubsidized loans for the 2013-2014 school year is shown below. 
 Loan Type Interest
Rate 
Interest 
Rate Cap 
 Unsubsidized  3.86% 8.25% 


Borrowing an Unsubsidized loan means interest will be charged while you are still attending school. Normally, you will start repaying the interest while you are still in school. This is a good strategy because you will pay less interest over the life of your loan.

However, you may also consider "Capitalization". If you Capitalize your loan, you will not pay the interest while in school. In this case, the interest will be be added to your unpaid principal balance. Capitalization increases the unpaid amount of your principal balance and interest is charged on the increased principal amount. This will greatly increase the total amount you repay over the life of your loan.

The Federal Government does not make a distinction for the Unsubsidized loan program but we will refer to four different Unsubsidized loans categories to help explain the different eligibility criteria and the different loan processes. The loan categories are:

Students with No Need
Students with no need and who do not qualify for the Subsidized Loan may be eligible for: 

 

  • Up to $3,500 per year – 1st year (student only qualifies if he/she does not have need and is not eligible for Sub loan)
  • Up to $4,500 per year – 2nd year (student only qualifies if he/she does not have need and is not eligible for Sub loan)
  • Students can use the regular loan request form to apply for this Unsubsidized loan and do not need to complete the Supplemental loan counseling
  • No other special action or process needed by student
Dependent/Special Circumstances Unsubsidized 
  • Dependent student with Rejected FAFSA because parents did not or will not provide their information
  • May borrow up to $2,000 per year
  • Students can use the regular loan request form to apply for this Unsubsidized loan and do not need to complete the Supplemental loan counseling

Dependent Additional Unsubsidized
Dependent students can only qualify if their parents cannot borrow PLUS loan due to various situations

  • May borrow up to $2,000 per year
  • Students must complete Supplemental Loan Counseling and meet all other eligibility criteria

Independent Additional Unsubsidized

  • May borrow up to $6,000 per year
  • Students must complete Supplemental Loan Counseling and meet all other eligibility criteria
Supplemental Loan Counseling
The U.S. Department of Education allows schools to require additional loan counseling for students who want to borrow Unsubsidized loans. There are two issues that are important to the Supplemental loan counseling. These are: 
  • Default Prevention
  • Debt Management
 Supplemental loan counseling is to help students:
  • understand the responsibility of their additional loan borrowing
    only borrow the additional loan funds needed to meet their educational goal for the current school year
    understand if they will have the ability to pay back these additional loan funds based on their career objective

Submission of the additional loan request and completion of the loan process does not guaranty that a student will be automatically approved for the Additional Unsubsidized loan amount. 

Additional Unsubsidized Loan Process (General Eligibility) 

  • Must complete a FAFSA for the 2013-2014 school year 
  • Must be enrolled in 6 or more units at San Diego City College for each semester
  • Must be in Good Standing for Satisfactory Academic Progress (SAP) and not have to appeal
  • Must not be a 1st Year Student or Approved on Appeal as described at the top of this page 
  • The maximum amount for one semester will be one half (1/2) of the annual loan limit  

Unsubsidized Loan Process (Steps to be Completed and Documents to be Submitted)

  • Complete the Unsubsidized loan request form. Click this link "Unsubsidized Loan" to print the loan request form.  
  • Direct Loan online payment calculator and budget planning calculation http://ed.gov/offices/OSFAP/DirectLoan/calc.html
    • Select the budget calculation and complete the budget items. Press "Calculate" when completed and print the result.
    • Select the standard repayment calculator and enter the current outstanding loan amounts you have borrowed to date plus the amount you are now requesting. Press "Calculate" when completed and print the result.

This page was last updated on August 12, 2013.