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How To Apply for Federal Direct Loans

Federal Direct Student Loans
at American River College 2018 - 2019

American River College encourages students to always apply for grants or scholarships before considering a student loan. A student loan is a serious and long-term obligation that should be used only as a last resort. If it is necessary for you to apply for a loan, then you must complete the steps below.  Federal Direct Loans should always be considered before private loans or credit card debt due to better repayment options and typically better interest rates.

Step 1

Complete the Free Application for Federal Student Aid (FAFSA) for 2018-2019 school year at List American River College on your FAFSA. Our federal school code is 001232.  To obtain a FSA ID (username and password) and complete federally required documents, visit: .

Step 2

Complete your 2018-2019 financial aid file with the ARC Financial Aid Office.  You will be notified of any documentation required by the US Department of Education or American River College via; therefore, you must have a valid, up-to-date email address on file with the Financial Aid Office at all times.  The email address indicated on your FAFSA is the email address that will be used by our Office as the primary means to communicate information to you.

Step 3

You must be enrolled in at least half-time status and actively attending classes in order to be eligible for a loan at American River College.  Wait-listed or late-starting classes will not count until full registration and attendance is active.  Any registration after the Award Eligibility Date for your term of attendance will not be counted for financial aid eligibility purposes.  Active half-time status refers to units that are in-session and you are currently attending, which is 6 units for Fall, 6 units for Spring and 3 units for Summer.  Half-time enrollment status must be maintained throughout the loan period or loan disbursements will be cancelled.

Step 4  

Students may not initiate a Federal Direct Student Loan until our Office has evaluated your Satisfactory Academic Progress (SAP) status.  Only students who have met SAP requirements are eligible for a Federal Direct Loan at American River College.  If your SAP status has been approved, then you may proceed to complete the loan request online in your "My ARC Aid" account.

Step 5

Submit your loan request online in My ARC Aid.  Log in and click the "Apply Online" tab, complete the loan request information, and submit. 

Step 6

All first-time (or new) borrowers and students with a zero-balance in the National Student Loan Database System (NSLDS) must:

  1. complete the Direct Loan Entrance Counseling annually at  (students who would like to receive personalized loan counseling and debt management advice can contact 916-484-8945 to participate in a loan support session), 
  2. have a current Student Educational Plan (ISEP) that covers the full length of the loan period (generally Fall through Spring) that is created by an ARC counselor,
  3. be enrolled in a valid ARC program of study (major) leading to a degree or approved certificate program, and 
  4. wait for 30 days from the first day of attendance in at least half-time enrollment status before any disbursement can be made - this requirement is in accordance with federal regulations. 

NOTE:  Repeat borrowers are strongly recommended to complete online Direct Loan Entrance Counseling every year at  .

Step 7

Submit an enlarged and legible copy of your social security card and valid driver's license/state photo ID to the Financial Aid Office.  An ARC Student ID is not acceptable.  If your name on the social security card and valid driver's license/state photo ID do not match your FAFSA and school records, your loan request will not be processed.  If you have already submitted a copy of your signed Social Security card and valid DMV driver's license/ID or federal photo ID for a prior award year, you do not need to submit another copy to us, unless there is a discrepancy or it is expired. 

To protect your personal information and prevent identity theft, you must submit these copies to ARC Financial Aid Office in-person, via uploaded document processing through My ARC Aid or by US Postal Mail at: 

American River College
Attention: Financial Aid Office
4700 College Oak Drive
Sacramento, CA 95841

Step 8

After all documents have been submitted and requirements have been fulfilled, the ARC Financial Aid Loan team will certify your loan.  This means that they will conduct an analysis to ensure that you are eligible for the Federal Direct Loan and have allowable unmet need for your loan request.  This can take several weeks, based upon loan request volume.  You will be notified when your certification is complete.  There is no action that a student must take for Step 8. 

Step 9

After certification is completed, you will be emailed instructions to go online to  and complete the Master Promissory Note (MPN).  This is a federal requirement, and no loan can be processed until this step is completed.  In this step, you will be making a "promise" to repay the full amount of the loan that you were certified to receive along with the interest and all federal origination fees.  A new MPN must be submitted for each loan period that a Federal Direct Loan is established.  For instance, students who take a loan in the Spring semester and also elect a take a new loan in the Summer term will be required to submit a new MPN.  The Federal Direct Loan is requested by and processed at American River College on the student's behalf.

Step 10

**Step 11 is only for Repeat Borrowers Who Have Exceeded $20,000 in Federal Direct Loan Debt**

Borrowers who have already borrowed $20,000 (or more) will complete and submit a loan debt management packet.  A student loan debt management packet will be emailed to you, if applicable, when your loan request is being verified.

Loan Disbursement and Interest Rate Information

In general, loan funds will be issued in two disbursements during the loan period.  Due to federal regulations, all loan disbursements must be made in two intervals within a loan period and cannot be issued at one time.  This is especially important for single semester loan borrowers to consider; all borrowers are advised to plan accordingly. 

Between July 1, 2017 and June 30, 2017, the interest rate for Direct Stafford Subsidized Loan is 4.45% and Direct Stafford Unsubsidized Loan is 4.45%.  Any Direct Subsidized or Unsubsidized loans taken during the summer 2017 term, that are certified on or after July 1st, 2018, will accrue an interest rate of 4.45%.

For loans borrowed between October 1, 2016 and before October 1, 2017 students will be charged an origination fee of 1.069% (by the federal government) on the Federal Direct Subsidized & Unsubsidized Loans.  Before October 1st, 2018, the origination fee for loans will reduce to 1.066%. 

Loan payments will be deposited to the account you have selected with Higher One Financial Services. Learn more about Higher One Financial Services and its LRCCD OneCard at .

Per federal requirement, if you are a first-year undergraduate student and first-time borrower, your first loan payment will not be processed until 30 days after the first day of half-time enrollment. The second disbursement depends on completion of at least half-time status (6 units) in the previous semester and continuing to meet satisfactory academic progress standards.  

Loan request deadlines


Any late submission of documents, unmet eligibility requirements, or loan requests occurring after the published deadlines do not generally allow sufficient time for Financial Aid Office to process the loan request.  All loans must be processed and disbursed before the last day of attendance within a loan period.

To be in compliance with federal requirements and to avoid overpayment issues, you must be enrolled in at least half-time status (6 units for Fall and Spring, 3 units for summer) in courses that begin before the loan request deadline.  No enrollment adjustments to financial aid awards, including Federal Direct Loans, will be made after this date.  No enrollments occurring after each semester's Award Eligibility Date (see Important Dates and Deadlines) are taken into consideration for any federal financial aid program.

Updated 02/9/2016