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What is a Federal Direct Loan?

A federal direct loan is money you borrow from the government that you have to pay back with interest. We encourage students to apply for grants and scholarships before taking out a student loan. A loan is a serious and long-term obligation.

Loan Eligibility

To be eligible for a federal student loan, you must:

  • Submit the Free Application for Federal Student Aid (FAFSA)
  • Demonstrate that you are qualified to enroll in college by one of the following means:
    • You have a high school diploma
    • You have a General Education Development (GED) Certificate
    • You passed the California High School Proficiency Exam (CHSPE)
  • Be a US citizen or eligible non-citizen with a social security number (SSN)
  • Be enrolled in an eligible degree or certificate program
  • Be enrolled in six units that apply toward the completion of your program
  • Maintain satisfactory academic progress
  • Certify that you will use federal financial aid only for educational purposes
  • Certify that you are not in default on a federal student loan and do not owe money on a federal student grant

All borrowers must sign the Master Promissory Note (MPN) annually. New borrowers must also complete entrance loan counseling through the Student Aid website.

Types of Federal Loans

How to Apply for Loans

Borrower's Rights and Responsibilities

When you accept a loan, you accept legal rights and responsibilities that last until the loan is repaid.

Loan Exit Counseling

All students who receive a loan must complete mandatory online loan exit counseling through the Department of Education. Loan exit counseling provides important information regarding repayment, deferment, and default prevention.

How to Complete Loan Exit Counseling

Visit the Student Aid website to complete loan exit counseling. You will need your FSA ID and password to complete the loan exit counseling. Be sure to select American River College (federal school code: 001232) when asked, otherwise the Financial Aid Office will not receive confirmation that you completed the requirement.

When to Complete Loan Exit Counseling

Loan recipients must complete loan exit counseling when they do any of the following:

  • Withdraw from college
  • Drop below half-time units
  • Transfer to another college
  • Graduate

Failure to complete loan exit counseling may result in the delay of your financial aid processing.