Federal Direct Student Loan Information

Borrow Responsibly. Invest in Your Future.

Federal Direct Loans are low-interest educational loans offered by the U.S. Department of Education to help students cover educational expenses while attending college. Unlike grants and scholarships, loans must be repaid with interest.

Compton College encourages students to consider grants, scholarships, work-study opportunities, and other forms of financial aid before borrowing a student loan. Students should borrow only what is necessary to support their educational goals.

 

Quick Links

• Important 2026-27 Federal Loan Changes
• Loan Overview
• Types of Federal Direct Loans
• Annual and Aggregate Federal Loan Limits
• Loan Proration Based on Enrollment
• Loan Eligibility Requirements
• How to Request a Loan
• Entrance Counseling
• Master Promissory Note (MPN)
• Loan Disbursement Information
• Before You Borrow
• Repayment Information
• Public Service Loan Forgiveness (PSLF)
• Exit Counseling
• Frequently Asked Questions
• Resources
• Contact Information

 

Important 2026-27 Federal Loan Changes

New Loan Proration Requirements

Beginning July 1, 2026, federal law requires annual Direct Loan limits to be prorated based on enrollment intensity for students enrolled less than full-time. Students who enroll in fewer units may receive a reduced annual loan amount. This federal requirement applies to all institutions participating in the Direct Loan Program.

What This Means for Students

Your loan eligibility may change if you:

• Enroll less than full-time
• Drop classes after receiving a loan
• Withdraw from classes
• Change your enrollment level

Students are encouraged to maintain their enrollment whenever possible and contact the Financial Aid Office before making enrollment changes.

 

Loan Overview

Federal Direct Loans may help cover:

• Tuition and fees
• Books and supplies
• Transportation expenses
• Housing costs
• Educational technology and equipment
• Other educationally related expenses

Federal Direct Loans offer benefits such as:

• Fixed interest rates
• Flexible repayment options
• Income-driven repayment plans
• Loan deferment and forbearance options
• Potential loan forgiveness opportunities

 

Types of Federal Direct Loans

Direct Subsidized Loan

A Direct Subsidized Loan is awarded to undergraduate students based on financial need.

The federal government pays interest:

• While you are enrolled at least half-time
• During the six-month grace period
• During approved deferment periods

 

Direct Unsubsidized Loan

A Direct Unsubsidized Loan is available regardless of financial need.

Important:

• Interest begins accruing immediately after disbursement
• Students are responsible for all interest charges
• Interest may be paid while enrolled or deferred until repayment

 

Annual and Aggregate Federal Loan Limits

Annual Loan Limits

Dependent Students

Academic Level	Annual Maximum
First-Year Undergraduate	$5,500
Second-Year Undergraduate	$6,500

Independent Students

Academic Level	Annual Maximum
First-Year Undergraduate	$9,500
Second-Year Undergraduate	$10,500

Aggregate Federal Loan Limits

Dependent Undergraduate Students

• Maximum Total Eligibility: $31,000
• Maximum Subsidized Eligibility: $23,000

Independent Undergraduate Students

• Maximum Total Eligibility: $57,500
• Maximum Subsidized Eligibility: $23,000

Actual eligibility may be less based on:

• Cost of Attendance (COA)
• Other financial aid received
• Enrollment intensity
• Remaining aggregate eligibility
• Federal regulations

 

Loan Proration Based on Enrollment

Beginning with the 2026-27 academic year, students enrolled less than full-time may have reduced annual loan eligibility.

Example
A dependent second-year student may normally qualify for:

$6,500 annual eligibility

If the student is enrolled at half-time, the student's annual loan amount may be reduced proportionately based on federal enrollment-intensity requirements.

Students should consult the Financial Aid Office for individualized eligibility calculations.

 

Loan Eligibility Requirements

To be considered for a Federal Direct Loan, students must:

• Complete the FAFSA
• Have a finalized financial aid file
• Maintain a cumulative GPA of at least 2.0
• Meet Satisfactory Academic Progress (SAP) standards
• Be enrolled in at least six (6) degree-applicable units
• Be enrolled in an eligible academic program
• Complete Entrance Counseling
• Complete a Master Promissory Note (MPN)
• Attend one Mandatory Loan Workshop per academic year
• Have a Comprehensive Student Education Plan
• Meet all federal and institutional eligibility requirements

 

How to Request a Loan

Step 1

• Complete the Free Application for Federal Student Aid (FAFSA).

https://studentaid.gov
 
Step 2

• Complete all requested Financial Aid documentation.
• Monitor your student email and financial aid portal regularly.

Step 3

• Review your financial aid eligibility.
• Students should ensure they meet all Direct Loan eligibility requirements before submitting a loan request.

 
Step 4

• Complete Entrance Counseling.

https://studentaid.gov/entrance-counseling
 
Step 5

• Complete a Master Promissory Note (MPN).

https://studentaid.gov/mpn
 
Step 6

• Attend a Mandatory Loan Workshop.

The workshop reviews:

• Responsible borrowing
• Interest accrual
• Repayment obligations
• Financial literacy
• Loan repayment planning

 
Step 7

• Submit your loan request.
• The Financial Aid Office will review all requests for eligibility.

 
Step 8

• Monitor your student email for updates regarding approval, additional requirements, and disbursement information.

 

Entrance Counseling

Federal regulations require first-time Direct Loan borrowers to complete Entrance Counseling before receiving loan funds.

Topics include:

• Borrower rights and responsibilities
• Interest accrual
• Repayment obligations
• Delinquency and default
• Budgeting strategies
• Financial literacy concepts
• Complete Entrance Counseling at:

https://studentaid.gov/entrance-counseling

 

Master Promissory Note (MPN)

The Master Promissory Note is a legally binding agreement between the borrower and the U.S. Department of Education.

By signing the MPN, students agree to repay any loans they receive.

Complete your MPN at:

https://studentaid.gov/mpn

 

Loan Disbursement Information

Loan funds are typically disbursed after:

• Enrollment verification
• Eligibility verification
• Completion of all required documents
• Completion of Entrance Counseling
• Completion of the MPN
• Attendance at the Loan Workshop
• Students must maintain eligibility at the time of disbursement.

 

Before You Borrow

Borrowing a student loan is a significant financial commitment.

Before accepting a loan, ask yourself:

• How much money do I actually need?
• What will my monthly payment be after leaving school?
• Can grants or scholarships reduce the amount I need to borrow?
• Am I planning to transfer to a four-year university?
• How much debt will I have when I complete my education?

 

Repayment Information

Most students enter repayment six months after:

• Graduating
• Leaving school
• Dropping below half-time enrollment

Repayment options may include:

• Standard Repayment
• Graduated Repayment
• Extended Repayment
• Income-Based Repayment (IBR)
• Other Income-Driven Repayment Plans

Contact your loan servicer immediately if you experience difficulty making payments.

 

Public Service Loan Forgiveness (PSLF)

Students interested in careers in public service may qualify for Public Service Loan Forgiveness (PSLF).

Eligible employment may include:

• Government agencies
• Public education institutions
• Nonprofit organizations
• Certain public-service employers

Visit:

https://studentaid.gov

for complete PSLF eligibility information.

Exit Counseling

Federal regulations require students to complete Exit Counseling when:

• Graduating
• Transferring
• Withdrawing
• Dropping below half-time enrollment

Exit Counseling explains:

• Repayment responsibilities
• Loan servicer information
• Available repayment plans
• Loan consolidation options
• Consequences of delinquency and default

Complete Exit Counseling at:
https://studentaid.gov/exit-counseling
 

Frequently Asked Questions

Do I need a cosigner?
No. Federal Direct Subsidized and Unsubsidized Loans generally do not require a cosigner.

Is a credit check required?
No credit check is required for Direct Subsidized or Direct Unsubsidized Loans.

How many units must I be enrolled in?
Students must generally be enrolled in at least six eligible units.

What happens if I drop classes?
Dropping classes may reduce your loan eligibility and could affect future disbursements.

When does repayment begin?
Generally six months after graduation, withdrawal, or dropping below half-time enrollment.

Can I pay off my loans early?
Yes. There is no penalty for early repayment.

Can I decline all or part of my loan?
Yes. Students may reduce or decline loan offers.

 

Helpful Resources

FAFSA
https://studentaid.gov/h/apply-for-aid/fafsa

Federal Student Aid
https://studentaid.gov

Entrance Counseling
https://studentaid.gov/entrance-counseling

Master Promissory Note
https://studentaid.gov/mpn

Exit Counseling
https://studentaid.gov/exit-counseling

Loan Simulator
https://studentaid.gov/loan-simulator

ECMC Solutions
https://www.ecmcsolutions.org

 

Contact Information

Compton College Financial Aid Office
Phone: 310-900-1600, ext 2935

Email: financialaid@compton.edu

Location: SSB 170

Summer Hours: Monday through Thursday 8 am to 6;30 pm. Closed on Friday.
 

Need Help Deciding Whether to Borrow?

Before accepting a loan, schedule a meeting with a Financial Aid Coordinator to review your eligibility, educational goals, borrowing needs, and repayment responsibilities. Responsible borrowing today can help reduce financial stress tomorrow.