Direct Loan Program FAQ

The following are frequently asked questions (FAQs) students have about the direct loan program offered by California College of the Arts.

What are the primary differences between the William D. Ford Federal Direct Loan and the Stafford Loan programs?

The primary difference is the source of the loan funding. Federal Direct Loans are made by the U.S. Department of Education using funds obtained from the U.S. Treasury. In the Stafford Loan program, loan funds are provided by banks or other financial institutions.

How does this affect CCA students?

Students that want to borrow a federal student loan beginning with summer 2010 will be borrowing through the Federal Direct Loan Program.

What types of Direct Loans are available?

CCA students and their parents will continue to have access to Subsidized, Unsubsidized, Parent and Grad PLUS loans under the Direct Loan Program.

How do I apply for Federal Direct Loans?

As with all federal student aid, students must first complete the Free Application for Federal Student Aid (FAFSA). The information on your FAFSA is transmitted to CCA and the Financial Aid Office will use this information to determine your need for federal student aid, including Direct Loans.

What else will I need to do receive a Federal Direct student loan?

CCA students will receive communications from the Financial Aid Office with instructions on how to complete the Federal Direct Loan process. This will include information about your financial aid award letter, the Master Promissory Note and loan-entrance counseling sessions.

How much can I borrow?

For more information on Direct Loan borrowing limits, visit:

What are the interest rates?

The interest rate for Direct Subsidized Loans for undergraduates with a first disbursement date between July 1, 2011, and June 30, 2012, is fixed at 3.4 percent.

The interest rate for Direct Subsidized Loans for graduate students and Direct Unsubsidized Loans for all students is fixed at 6.8 percent.

The interest rate for Direct PLUS and Grad PLUS Loans is fixed at 7.9 percent.

For more information about interest rates visit

Is this the same process for alternative loans?

No. This applies only to federal student loans, not private or alternative loans.

If I borrowed a Federal Stafford or Federal PLUS loan through a private lender in 2009-10 and I borrow a Federal Direct Loan now, will I have to repay two different lenders?

Yes. Your Federal Direct Loan will be serviced by the Department of Education and you will receive correspondence and payment information from the Department of Education.

You will also be contacted by other lenders from whom you have borrowed Federal Stafford or Federal PLUS Loans.

You have the option of consolidating all of your federal loans with the Federal Direct Loan program or any other lender that offers federal loan consolidation loans after you graduate.

What happens to the Stafford loans I have already borrowed via my bank or lender? Will the payments still be deferred now that CCA is changing its loan processing?

As long as you are enrolled in college on a half-time basis, your prior year Federal Stafford Loans will continue to be deferred.

Is there other information available on Federal Direct Lending?

For more information about the Federal Direct Loan Program: