Loans

William D. Ford Federal Direct Loan (Direct Loan) Program

 

 

Download the Federal Direct Loan Brochure!

Federal student loans are an investment in your future. You should not be afraid to borrow a student loan, but you should be smart about it – think about how much you may have to depend on student loans once you enter into a bachelor’s program; don’t mortgage your future by taking on debt unnecessarily at the community college level.

Federal student loans offer many benefits compared to other options you may consider when paying for college:

• The interest rate on federal student loans is fixed and usually lower than that on private loans—and much lower than that on a credit card!
• You don’t need a credit check or a cosigner to get a Direct Loan at Chabot College.
• You don’t have to begin repaying your federal student loans until after you leave college, whether you graduate or not, or drop below half-time.
• If you demonstrate financial need, the government pays the interest on some loan types while you are in school and during some periods after school.
• Federal student loans offer flexible repayment plans including several options in postponing your payments if you are having trouble paying your loan.
• If you work in certain jobs, you may be eligible to have a portion of your federal student loans forgiven if you meet certain conditions.

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How do I request a Direct Loan at Chabot College?

The Chabot Financial Aid Office does not automatically offer Direct Loans in the students initial Financial Aid package. Students interested in borrowing a federal student loan are required to submit a Direct Loan Request form to the Financial Aid Office for processing. 

The Direct Loan Request form is available upon request by contacting the Financial Aid Office. The form has a different due date every semester published on our Important Dates and Deadlines website.

In order to be considered for a Direct Loan, you must:

• Have a FAFSA application on record with Chabot College for the current academic year AND have all Student Financial Aid Requirements completed (so that overall financial aid eligibility can be determined by the Financial Aid Office).
• Maintain an enrollment level of at last half time (6 units) for each semester that you are awarded.
• Maintain academic eligibility by meeting Satisfactory Academic Progress (SAP) requirements.

If your Direct Loan Request is approved, in order for your loan funds to disburse, you will first be required to complete:

• Entrance Counseling (required for new borrowers who have never borrowed funds through the Direct Loan Program or the FFEL Program)
  • This counseling requirement ensures you understand the terms and conditions of your loan and your rights and responsibilities. You’ll learn what a loan is, how interest works, your options for repayment, and how to avoid delinquency and default.
• Master Promissory Note (MPN) for Undergraduate Students (required each new academic year that you borrow a Direct Loan at Chabot College)
  • This is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education.
• Annual Student Loan Acknowledgement
  • Required if this is your first time accepting a federal student loan, you are acknowledging that you understand your responsibility to repay your loan.
  • Required if you have existing federal student loans, you are acknowledging that you understand how much you owe and how much more you can borrow.

 

Loan Disclosure Information

 

Understanding Your Loan Obligations

• Chabot College is committed to providing clear and comprehensive information about student loans to help you make informed decisions. This page serves as a centralized resource for understanding your rights and responsibilities as a borrower, in compliance with the Higher Education Act (HEA). Here, you’ll find essential information about federal loans, including terms, eligibility, repayment, and borrower resources.

Compliance with Federal Requirements

• To comply with HEA regulations, Chabot College makes certain loan-related disclosures available to the public and directly to students. It’s important for you, as a borrower, to have access to accurate information to make sound financial decisions regarding your education. If you need specific details beyond what’s provided here, you may request additional information from our Financial Aid Office.

Accessible and Student-Centered Information

• We prioritize making loan information accessible and understandable. Our website organizes loan disclosures into relevant topics, such as repayment options, entrance and exit counseling, and borrower resources. Additionally, we use clear language, to help you easily navigate and understand the details of your financial aid.

Loan Repayment Options

• Explore Your Loan Repayment Options
  • Understanding your repayment options is crucial to managing your federal student loans effectively. Chabot College provides guidance on various repayment plans to fit your financial situation and goals. Remember, selecting the right repayment plan can reduce financial stress and help you stay on track with your payments.

Standard Repayment Plan: This plan features fixed monthly payments over a 10-year period. It’s ideal for borrowers who can manage steady payments and want to pay off their loans quickly, minimizing interest costs.

Graduated Repayment Plan: Payments start low and gradually increase, typically every two years. This plan is suited for borrowers expecting their income to rise over time.

Income-Driven Repayment Plans: Options like Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR) adjust monthly payments based on your income and family size. These plans offer lower initial payments and potential loan forgiveness after 20-25 years of qualifying payments. Learn more about Income-Driven Repayment Plans here.

Extended Repayment Plan: For borrowers with higher loan balances, this plan extends repayment up to 25 years, with either fixed or graduated payments.

Need Help Deciding?

For personalized advice on choosing the best repayment plan, reach out to our Financial Aid Office or use the Federal Student Aid Repayment Estimator to see what your monthly payments might look like under different plans.

 

Entrance and Exit Counseling

Loan Entrance Counseling: A Requirement for First-Time Borrowers

• Before receiving your federal student loan funds, you must complete entrance counseling, which ensures you understand the responsibilities and obligations of borrowing. This quick session covers loan terms, budgeting, and managing your education expenses effectively. Entrance counseling is available online through the Federal Student Aid website.

How to Complete Entrance Counseling

1. Visit studentaid.gov and log in with your FSA ID.
2. Complete the interactive session, which includes important information about budgeting, repayment, and managing your loans.
3. Once finished, Chabot College will receive confirmation, allowing your loan disbursement process to continue.

Exit Counseling: Planning for Your Financial Future

• Exit counseling is required when you graduate, leave school, or drop below half-time enrollment. This session will help you prepare for loan repayment by covering topics such as your repayment plan options, interest accrual, and avoiding default.

How to Complete Exit Counseling

• Go to studentaid.gov and log in with your FSA ID.
• Complete the session, which includes an overview of repayment plans, managing monthly payments, and understanding loan forgiveness options.
• Once completed, Chabot College will be notified of your exit counseling completion.

Borrower Resources

Resources for Managing Your Loans

We provide a variety of resources to help you make informed decisions about your loans. Explore these tools and support services to stay on track with your repayment and manage your finances effectively.

• Federal Student Aid Loan Simulator: Use the Loan Simulator to estimate your monthly payments, compare repayment plans, and make decisions that align with your financial goals.
• Track Your Federal Loans through StudentAid.gov: Track your federal loan amounts, interest rates, and servicer information through the StudentAid.gov website.  All federal loans will be submitted to NSLDS and are accessible by authorized agencies, lenders, and institutions in accordance with federal guidelines [HEOA 489 amended HEA Sec.485B]. Staying informed about your loan details can help you avoid missed payments and understand your repayment obligations.
• Public Service Loan Forgiveness (PSLF): If you work in qualifying public service jobs, you may be eligible for PSLF, which forgives the remaining balance on your Direct Loans after 120 qualifying payments. Learn more about PSLF here.
• Financial Aid Office Support: For additional guidance, Chabot College’s Financial Aid Office offers one-on-one support to help you navigate loan repayment, select the right repayment plan, and understand deferment, forbearance, and forgiveness options.

 

How We Keep You Informed

Our goal is to provide accurate, up-to-date information to support you throughout your educational journey. We regularly review and update this page to ensure compliance with federal guidelines and to reflect any changes in loan policies or borrower rights.

For additional questions, or if you need further guidance, please contact our Financial Aid Office. We’re here to help you make confident and informed financial decisions as you pursue your education at Chabot College.