Federal Direct Stafford Loans (Subsidized & Unsubsidized)
Deadline to accept loans:
December 6, for one-term enrollment (fall only)
May 1, for academic year (Aug-May) or one-term enrollment (spring only)
Direct Subsidized Loan
Direct Subsidized Loans are awarded based on demonstrated financial need. The federal government pays the interest while students are enrolled at least half-time.
2013-14 New regulations
As part of the law that extended the 3.4% interest rate for Direct Subsidized Loans until July 1, 2013, a new borrower on or after July 1, 2013, becomes ineligible to receive additional Direct Subsidized loans if the period during which the borrower has received such loans exceeds 150% of the published length of the borrower's educational program. The borrower also becomes responsible for accruing interest during all periods as of the date the borrower exceeds the 150% limit.
2012-13 New regulations
Interest subsidy during the six month grace period was eliminated for loans made after July 1, 2012. The repayment period still begins six months after the student is no longer enrolled at least half-time, but the interest that accrues during those six months is payable by the student.
Congress extended the fixed interest rate of 3.4% for new subsidized loans issued on or after July 1, 2012. This rate was scheduled to rise to 6.8%, but Congress took last-minute action to extend the lower rate for one more year.
Beginning July 1, 2012, graduate students are no longer eligible for subsidized loans.
Interest rate: 2013-14 Subsidized loan
- 3.86% Undergraduates/Post-baccalaureate/Credential
The Direct Loan interest rates for loans first disbursed between July 1, 2013 and June 30, 2014 are fixed. Under the new interest rate structure, all Direct Loans, except Direct Consolidation loans, will be "variable-fixed," meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There are also interest rate caps at 8.25% for Direct Subsidized loans and Direct Unsubsidized loans for undergraduate students.
The interest rates are calculated using a base 10-year Treasury Note Index of 1.81% plus an add-on amount for each loan program - 2.05% for Direct Subsidized loans and Direct Unsubsidized loans for undergraduate students.
Interest Rate: 2012-13 Subsidized loan
Direct Unsubsidized loan
The Direct Unsubsidized Loan is available to all eligible students, even those not demonstrating financial need. The Direct Unsubsidized Loan should be borrowed cautiously since the borrower will be responsible for paying all the interest on the loan. On this loan, interest will begin accruing after the first disbursement even though payment is not required until six months after graduating or dropping below half-time status. While in school, interest only payments may be made, but is not required. If interest is not paid while in school, the interest is capitalized (added to the original loan amount) once repayment begins.
Interest rate: 2013-14 Unsubsidized loan
The Direct Loan interest rates for loans first disbursed between July 1, 2013 and June 30, 2014 are fixed. Under the new interest rate structure, all Direct Loans, except Direct Consolidation loans, will be "variable-fixed," meaning students would receive a new rate with each new loan, but then that rate would be fixed for the life of the loan. There are also interest rate caps at 8.25% for Direct Subsidized loans and Direct Unsubsidized loans for undergraduate students, 9.50% for Direct Unsubsidized loans for graduate/professional students.
The interest rates are calculated using a base 10-year Treasury Note Index of 1.81% plus an add-on amount for each loan program - 2.05% for Direct Subsidized loans and Direct Unsubsidized loans for undergraduate students, 3.60% for Direct Unsubsidized loans for graduate/professional students.
Interest rate: 2012-13 Unsubsidized loan
The federal government pays interest while students are in school at least half-time and during six month grace period.
New for 2012-2013
Interest subsidy during the six month grace period is eliminated for loans made after July 1, 2012. This means, interest accrued during those six months will be payable by the student.
|Interest starts accruing (accumulating) from the time the funds are disbursed.|
|Students are responsible for paying the interest|
|Students can choose to either pay interest while in school or let it accrue|
|The amount accrued will be added to the principal balance of the loan (capitalized)|
|If interest is capitalized, it increases the loan principal balance and students will have to pay interest on the increased loan principal amount. The total amount a student repays over the life of the loan will be greater than if interest is paid while in school.|
Terms and Conditions
All previous federal loans must be in good standing.
No Grants in overpayment status.
Complete the Master Promissory Note (MPN), if it has been more than 10 years since the last MPN was completed.
Complete Entrance Loan Counseling (ELC) if student is a first-time loan borrower at SJSU.
Must be enrolled in, and successfully complete, at least half-time enrollment (6 units for Undergraduate, Post-baccalaureate, Credential; 4 units for Graduate students).
Academic progress must be in good standing with Financial Aid.
Students who are academically disqualified from the University, attending Open University, or enrolled less than half time, are not eligible for Federal Direct Stafford Loans.
Complete Exit Loan Counseling within sixty (60) days of the last date of attendance at SJSU.
Steps to Complete the Loan Process
Students accept loans on their MySJSU. For step-by-step instructions on how to accept loans, view Accepting a Federal Direct Stafford Loan. Once loans are accepted, an email notification is sent directing students to complete an online Entrance Loan Counseling (ELC) session and the Master Promissory Note (MPN).
First time student loan borrowers at SJSU must Complete the online Entrance Loan Counseling (ELC) session prior to receiving the first loan disbursement; there are no exceptions to this federal requirement. Make sure San José State is selected as your school. Entrance Loan Counseling may be completed at anytime, however, students cannot proceed in completing the Master Promissory Note (item #3 below) until notified to do so.
Students MUST eSign the MPN prior to receiving a loan disbursement. Under the Federal Direct Loan Program, the MPN must be signed every 10 years.
Repayment begins six months after graduation or after enrollment drops below half-time.
For the Unsubsidized Loan, any interest accrued will be capitalized. Students are responsible for interest accrued.
Federal student loans cannot be discharged through bankruptcy.
To retrieve loan history information, go to http://www.nslds.ed.gov.
|Academic Level||Sub/Unsub Total||Additional Unsub||Total|
|Freshman (0-29 units)||$3,500||$2,000||$5,500|
|Freshman (0-29 units)||$3,500||$6,000||$9,500|
|Sophomore (30-59 units)||$4,500||$6,000||$10,500|
|Junior/Senior (60+ units)||$5,500||$7,000||$12,500|
(As of 7/1/2012, Graduate Students are NO longer eligible for Subsidized Loan)
|Academic Level||Subsidized and Unsubsidized Totals|
|Dependent Undergraduate Students||$31,000 (no more than $23,000 of which can be subsidized)|
|Independent, Undergraduate/Credential Students||$57,500 (no more than $23,000 of which can be subsidized)|
(As of 7/1/2012, Graduate students are NO longer eligible for Subsidized Loan)
|$138,500 (no more than $65,500 of which can be subsidized)|