Federal Direct Loan Information

The Federal Direct Loan program offers loans at a low interest rate with repayment terms designed with students in mind.  In most cases, students will not have to start repaying the loans until six months after a student graduates and/or enrolls in less than six units (half-time).

Loans must be repaid with interest so it is important to understand the rights and responsibilities as a borrower.  All borrowers are required to complete the Loan Entrance Counseling before the office processes a loan.

Taft College participates in the William D. Ford Federal Direct Loan Program.  The U.S. Department of Education is the lender for the William D. Ford Federal Direct Loan Program.  Direct Loans are issued by the federal government.  The loan is serviced by the Federal Direct Loan Servicing Center.  There are no banks or lending institutions.

Read the Taft College Title IV Loan Code of Conduct (PDF)

Types of Direct Loans

Subsidized Loans

Subsidized Loans are available to eligible students who demonstrate financial need to help cover the costs of higher education at a college or career school.  If you qualify, the federal government will pay the interest on the loan while students are in school and during periods when students are authorized to defer loan payments.

Unsubsidized Loans

Unsubsidized Loans are available to students regardless of financial need.  Students are responsible for the interest which accumulates on the unsubsidized loan while the student is attending school, during the grace period and during any periods when the student is authorized to defer the loan payments.  The students have the option to pay the interest during while enrolled in school or pay it later.  If students delay payment the interest will be added to the principal balance. This addition of interest to the principal balance of the loan is known as capitalization.

Annual Loan Limits

First-Year Undergraduate Annual Loan Limit 

  • Dependent: $3500 subsidized + Up to $2000 additional unsubsidized
  • Independent: $3500  subsidized + Up to $6000 additional unsubsidized

Second-Year Undergraduate Annual Loan Limit 

  • Dependent: $4500 subsidized + Up to $2000 additional unsubsidized
  • Independent: $4500 subsidized + Up to $6000 additional unsubsidized

Fees and Interest Rates

For all Direct Subsidized Loans and Direct Unsubsidized Loans with a first disbursement date on or after October 1, 2021 and before October 1, 2022 the origination fee is 1.057%

For all Direct Subsidized Loans and Direct Unsubsidized Loans with a first disbursement date on or after October 1, 2022 and before October 1, 2023 the origination fee is 1.057% (rate subject to change after July 1st)

For all Direct Subsidized Loans and Direct Unsubsidized Loans with a first disbursement date on or after October 1, 2021 and before October 1, 2022, the interest rate is 3.73%

For all Direct Subsidized Loans and Direct Unsubsidized Loans with a first disbursement date on or after October 1, 2022 and before October 1, 2023, the interest rate is 4.99% (rate subject to change after July 1st)

Repayment of Federal Direct Student Loans

After graduating, leaving school or enrolling in less than half-time (6 or less units), a student will have a six month “grace period” before the first loan payment is due. All Direct Loans must be paid back with interest. Typically, a student will have 10 years to repay the Direct Loan. The Exit Counseling Guide will provide a complete picture of repayment options.

Contact Us

For more information contact:

Student Loan Checklist