Information related to the Federal Direct Loan program.
Full-Time Academic Year Definition: To be considered full-time for the academic year the student must take 24 credit hours in an academic year. Half-time Enrollment: Students must be enrolled for at least a half-time load of financial aid-eligible classes to receive a Federal Direct Loan in any given semester. The minimum number of credits per semester to be considered half-time is: 6 credit hours
- Less than Full-Time Enrollment: Starting with the 2026-2027 award year, Direct Loan amounts for students who are not full-time for the full academic year will need to be adjusted based on enrollment.
- Less than Full-Time Formula for Loan Reduction:
- Loan Reduction at the time of Disbursement:
At the time of loan reduction, the student’s loan will be reduced based on the number of credits enrolled, even though they may have been awarded as a full-time student.
Loans Subject to Reduction: The loan reduction rule applies to all undergraduate, graduate, and doctoral student Federal Direct Loan borrowers, utilizing Direct Subsidized Loans, Direct Unsubsidized Loans, and Graduate PLUS Loans. Even those considered legacy borrowers who have borrowed from any of these loan programs prior to July 1, 2026 are subject to this rule.
Parent PLUS Borrowers: Since this rule only impacts student borrowing, the Federal Direct Parent PLUS Loan is not subject to these adjustments for less-than-full-time enrollment.
Loan Reduction Calculation Example
A dependent first-year student can borrow up to $5,500 in federal student loans for the school year. Student plans to take 12 credit hours in the Fall and 12 credit hours in the Spring, which makes them a full-time student.
- Full-time for the year = 24 credits (12 Fall + 12 Spring)
- Loan is disbursed in two equal payments:
- Fall: $2,750
- Spring: $2,750
- Total: $5,500
The student was enrolled in 12 credits in the Fall and dropped to 6 credits. The recalculation will be as follows:
- Fall: 6 credits
- Spring: 12 credits (expected)
- Total: 18 credits
Percent of credits completed: (18 / 24) x 100 = 75%
Reduced Loan Eligibility
Academic Year Eligibility x Percent Credits Completed
$5,500 x 75% = $4,125 (maximum loan eligibility for the academic year)
The Master Promissory Note (MPN) is a legal document in which you promise to repay your loans(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s); for example, it will include information on how interest is calculated, when interest is charged, available repayment plans, and deferment and cancellation provisions.
To complete an MPN online you will need your FSA ID. The MPN is completed online at www.studentaid.gov.
Students who are first time borrowers of subsidized or unsubsidized Federal Direct loans must receive entrance counseling at or before the date the school can release the first loan disbursement. Entrance counseling helps ensure that the borrower understands the terms and conditions of the loan as well as his or her rights and responsibilities, before receiving the loan proceeds.
During Entrance Counseling, you will learn about the following:
• What a loan is and how the loan process works
• Managing your education expenses
• Other financial resources to consider to help pay for your education
• Your rights and responsibilities
Federal Direct Loan Entrance Counseling can be completed online. For more information about entrance counseling click here.
Exit Counseling is an online educational course for borrowers of Federal Direct Subsidized and/or Unsubsidized Loans. The counseling is required for all borrowers who are no longer attending or are currently registered for less than six credits. Exit Counseling needs to be completed even if you are planning to continue your education at another institution.
During Exit Counseling, you will learn about the following:
• Loan consolidation
• Loan deferment
• Repayment options
• Loan forbearance
Federal Direct Loan Exit Counseling can be completed online. For more information about exit counseling, click here.
Federal student loan borrowers are recommended to complete the annual student loan acknowledgment. This acknowledgement can be for subsidized and/or unsubsidized loans, a PLUS loan for graduate/professional students, or a PLUS loan for parents. Most people complete the acknowledgment in less than 10 minutes.
This is not the same as completing Loan Entrance Counseling that is required by the Department of Education.
If you are a first-time borrower accepting a federal student loan, you are acknowledging that you understand your responsibility to repay your loan.
If you are an existing federal student loan borrower, you are acknowledging that you understand how much you owe and how much more you can borrow.
You’ll also see other federal student aid information, including the interest rates and repayment options to make managing your student loans easier.
Your rights as a borrower
• You may accept all, some, or none of the student loan funds offered.
• You are entitled to a copy of your promissory note, which outlines the terms and conditions of your student loan, and will receive it before or after the loan is made.
• Before you begin to repay, your loan holder is required to give you a payment schedule and detailed information about interest rates, fees, the balance you owe, and your repayment options.
• You have a right to defer payments for certain defined periods or to request forbearance, if you qualify.
• You may be eligible to repay under a graduated or income-based repayment plan.
• For federal student loans and most private student loans, you may prepay in whole or in part at any time without penalty.
Your responsibilities as a borrower
• You must notify your school if you want to borrow less than the amount that has been awarded.
• You must repay your student loans on time and in full even if you do not finish your education, get a job, or feel satisfied with the education you received.
• You must notify your loan holder or servicer immediately of any change to your name, address, telephone number, or Social Security number.
• You must make scheduled monthly payments even if you do not receive a bill or coupon booklet.
• First-time Direct Loan borrowers must receive entrance counseling before funds can be disbursed.
The National Student Loan Data System (NSLDS) is the U.S. Department of Education’s central database for federal student aid records. You can use it to keep track of your federal loans, grants, work study. To access NSLDS, you will need to use your FSA ID. Click the link to login into NSLDS.
This is the Department of Educations website. It will contain the most up to date information for interest rate and fees for student and parent loans.
There are several consequences to being in default. Students are considered to be in default if they don’t make their scheduled student loan payments for at least 270 days.
For more information on how to manage loans, please visit https://studentaid.gov/manage-loans/default.
Below, CVCC’s most recent cohort default number is listed.
| Cohort Fiscal Year | Official Default Rate | Number of Borrowers in Default | Number of Borrowers in Repayment | Enrollment Figures | Percentage Calculation |
|---|---|---|---|---|---|
| 2022 | 0 | 0 | 280 | N/A | N/A |
| 2021 | 0 | 0 | 263 | N/A | N/A |
| 2020 | 0 | 0 | 263 | 2,075 | 12.67% |
Disclaimer: The FY2020 national cohort default rate is zero percent. Cohort default rate pulled from NSDLS on January 14, 2026.
