Federal Direct Stafford Loans (Subsidized & Unsubsidized)

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Students must be awarded financial aid to accept loans. View Seven Steps to Financial Aid for an overview of the financial aid process. 

Deadline to accept loans:

  • December 1, 2015: for students attending fall 2015, only. 

  • April 29, 2016: for students attending both fall 2015 and spring 2016, or attending spring 2016, only. 


Direct Subsidized Loan

Offered to undergraduate students based on demonstrated financial need. The interest on the loan is paid by the Department of Education as long as the student maintains half-time enrollment (6 units); or during the 6 months grace period*, or if the student has not exceeded his or her maximum time frame**.

*Students who received a Direct Subsidized loan that was first disbursed between July 1, 2012, and July 1, 2014, are responsible for paying any interest that accrues during the grace period. If you choose not to pay the interest that accrues during your grace period, the interest will be added to your principal balance.

**Maximum time frame: If you are a first-time borrower on or after July 1, 2013, there is a limit on the maximum period of time (measured in academic years) that you can receive Direct Subsidized loans. This limit does not apply to Direct Unsubsidized loans or Direct PLUS loans. If this limit applies, you may not receive Direct Subsidized loans for more than 150 percent of the published length of your program. This is called your "maximum eligibility period." Your maximum eligibility period is based on the published length of your current program. You can find the published length of your program in the school catalog.


Direct Unsubsidized loan

Offered 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.  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 Rates

2015-16
Loans first disbursed on or after July 1, 2015 and prior to July 1, 2016
Loan Type Borrower Type Interest Rate
Direct Subsidized Undergraduate Students 4.29%
Direct Unsubsidized Undergraduate Students 4.29%
Direct Unsubsidized Graduate/Professional Students 5.84%


2014-15
Loans first disbursed on or after July 1, 2014 and prior to July 1, 2015
Loan Type Borrower Type Interest Rate
Direct Subsidized Undergraduate Students 4.66%
Direct Unsubsidized Undergraduate Students 4.66%
Direct Unsubsidized Graduate/Professional Students 6.21%


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.  


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

  1. Students accept loans on their MySJSU. For step-by-step instructions on how to accept loans, view Accepting a Federal Direct Stafford Loan. Upon accepting loans, students will be directed to complete:

    • Entrance Loan Counseling (ELC), if they are first time student loan borrowers at SJSU, and

    • Master Promissory Note (MPN), if one has not been completed within past 10 years. 

    • Both session are completed on-line. To-Do items will be posted on MySJSU directing students to a website where they will complete the loan process.
  2. First time student loan borrowers at SJSU must complete the online Entrance Loan Counseling session prior to receiving their first loan disbursement. There are no exceptions to this federal requirement. Make sure San José State is selected as your school. 

  3. 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 Information

  • 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.

Additional Information

To retrieve loan history information, go to http://www.nslds.ed.gov.