Federal Direct Loan (Unsubsidized)

The Unsubsidized Loan will be available beginning October 3, 2011. You must pick up the loan information and request form from the Financial Aid Office.

Basic Information

Unsubsidized loans are another form of borrowing that is not recommended for most students. Unsubsidized loans were originally set up for middle income families that didn't qualify for grants or subsidized loans. Borrowing an Unsubsidized loan means interest will be charged while you are still attending school. Your first option is to 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

Your second option is to not pay the interest while in school. In this case, the interest will be be added to your unpaid principal balance. This is called "capitalization". 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:

Regular Unsubsidized
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 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 $6,000 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:Â

  • 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)Â

  • Must complete FAFSA
  • Must be enrolled in 6 or more units at San Diego City College
  • Must be in Good Standing based on the completion rate and the cumulative GPA of the SDCCD Satisfactory Academic Progress policy
  • Must not be on Financial Aid Probation or Disqualification due to an unsatisfactory completion rate or cumulative GPA
  • The maximum amount for one semester will be one half (1/2) of the annual loan limitÂ

 

Additonal Unsubsidized Loan Process (Supplemental Steps to be Completed and Submitted)

  • Complete the Unsubsidized loan request form (Only for requests for the Additional Unsubsidized loan)
  • Scholarship search from http://www.fastweb.com (Search for two eligiblel scholarships print the results)Â
  • 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 September 29, 2011.