Financial Aid

• Incomplete Requests cannot be processed. Please allow 6 weeks for Loan Request Forms to be processed during peak times. Loan Request forms are processed in the order they are received.
• You will receive a Direct Loan Certification email to your student email with your estimated earliest loan disbursement date after your request has been approved and processed. If your loan request has been denied or reduced, you will receive a notice to your student email.
• Enrollment verification- Loan funds will not be disbursed until after census/ Financial Aid freeze dates each Fall and Spring term to verify enrollment in at least 6 units. All students will receive a loan certification email with the earliest possible disbursement date.
• First time student borrowers with no prior Federal Direct Loan are required by law to complete 30 days of their program of enrollment before receiving their first loan disbursement.

What kinds of problems could cause my loan to be delayed, reduced or cancelled?

Enrolled less than half-time (6 units)

Students must be enrolled in and attending Butte College at least half-time (6 units) for the entire loan term. Open Entry/Open Exit and late-starting courses must be added by freeze dates to count toward loan eligibility.

Lack of Satisfactory Academic Progress

• Students failing to meet required standards of Satisfactory Academic Progress are not eligible to receive financial aid including loans for the entire loan period.
•  Loans for students on Financial Aid Probation or approved Maximum Timeframe Petitions may be delayed or denied until their Satisfactory Academic Progress status is confirmed.
• Students who have been disqualified due to lack of Satisfactory Academic Progress must be reinstated before they can apply for a loan, and may be subject to reduction or cancellation of loans.

Student loan debt is an issue for individuals and well as a national concern. The federal government has set a maximum amount that undergraduates may borrow. Since "undergraduate" includes all course work through a Bachelor's degree, it is important not to "over-borrow" at the community college level.

High Debt Load Management. For a student enrolled at Butte College, pursuing an Associate degree or Certificate of Achievement, the college considers the following amount totals to be excessive debt load for a student attending community college:

Students who have reached these debt loads are considered High-Risk Borrowers and are subject to delay, reduction, or denial of their loan request. Please plan accordingly for a delayed loan review.

Federal regulations require loans to be released in at least two payments.

• Academic-year loans (fall and spring semesters) have one payment after the loan is originated in the fall and the second at the beginning of the spring semester.
• One-semester loans are divided into two payments, one after the loan is originated and a second at the mid-point of the semester. Students must maintain at least half-time enrollment (6 units) to receive a second payment under either loan arrangement.
• Summer Session is not part of the regular academic year (fall and spring semesters) and student loans are not granted for summer course work.

Subsidized Direct Loan is awarded on the basis of financial need. Unmet "need" is determined by subtracting the Student Aid Index (SAI) and all other forms of aid from the Cost of Attendance (COA), or budget. Interest is paid for you by the federal government while you are enrolled in school at least half-time and during periods of authorized deferment. The federal government "subsidizes" your loan, by paying the interest during these periods.

Unsubsidized Direct Loan is not awarded on the basis of need and is available to you regardless of income. Interest will be charged from the time the loan is disbursed until it is paid in full. You may choose to make periodic interest payments or opt to have the accrued interest capitalized (added on) to the principal loan amount.

Interest rates and fees are adjusted by Congress and begin July 1 for each academic year. As per changes authorized by the Bipartisan Student Loan Certainty Act of 2013, the Direct Loan interest rate will be the sum of a uniform "index rate" plus an "add-on" that varies depending on the type of loan and the borrower's grade level. The interest rate for a loan, once established, will apply for the life of the loan -- that is, the loan is a fixed-rate loan. As a result, student borrowers who borrow in more than one award year will likely have a number of fixed-rate loans, each with a different interest rate. Loans borrowed in the academic year 2013-2014 had a 3.86% interest rate for Subsidized and a 3.86 % interest rate for Unsubsidized.

Interest. Loans must be repaid in full. In addition to the principal (the amount you borrow), interest accumulates on the loan as an expense paid by the borrower for the use of the money. The expense is calculated as a percentage of the unpaid principal amount.

Origination Fees. All loans have loan fees (also called origination fees) that are deducted proportionately from each loan disbursement you receive. This means that the money you receive will be less than the amount you actually borrow. You are responsible for repaying the entire amount.

An origination fee will be automatically deducted before disbursement.

• For loans disbursed before Oct. 1, 2023, the fee is 1.057% of the loan.
• For loans disbursed on or after Oct. 1, 2024, and before Oct. 1, 2025, the fee amount is TBD by the Department of Education at a later date