Federal Direct Stafford Loans (Subsidized & Unsubsidized)
Accepting 2013-2014 loans becomes available on July 1.
Deadline to accept loans on MySJSU for the Academic Year (August-May):
December 1, for Fall semester (one-term enrollment) or May 1, for the academic year.
May 1, for Spring semester (one-term enrollment)
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 and during the six month repayment grace period (terms for subsidized grace period has changed; read below).
New regulations implemented in 2013-2014 Award Year
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.
NEW regulations implemented in 2012-2013 Award Year
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.
Subsidized Interest Rate: Fall 2013 - Spring 2014
- 6.8% - Undergraduates/Post-baccalaureate/Credential
Subsidized Interest Rate - Fall 2012 - Spring 2013
3.4% - Undergraduates/Post-baccalaureate/Credential
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.
Unsubsidized Interest Rate - Academic Years: 2013-2014 and 2012-2013:
Difference between Subsidized and Unsubsidized Loans
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)|