HomeFederal Direct Loans for Student and Parents
SDSU participates in the Federal Direct Student Loan (Direct Loan) Program, which provides long-term, low-interest loans borrowed directly from the U.S. Department of Education for you and your parents, if you are a dependent student.
Loans may be included as part of your financial aid award and provide you with the opportunity to borrow funds to meet your educational expenses.
Before borrowing, explore all other options available including work, scholarships, and grant assistance.
Federal Direct Loans at SDSU
SDSU offers 4 federal Direct Loan options plus the Perkins Loan.
Subsidized—No interest or payments while you are enrolled at least half time (undergraduate students only).
Unsubsidized—Interest charged while you are enrolled.
Grad PLUS—For graduate students after all other loans are awarded.
Parent PLUS—A loan parents may borrow to help with your educational expenses.
To find out if you have loan eligibility, check your financial aid award on AidLink. Your loan award may include—
- subsidized and/or unsubsidized Direct Loans.
- Parent PLUS Loan estimate if you are a dependent undergraduate student.
- a Grad PLUS Loan if you are a graduate student.
New - As of July 1, 2012, graduate students may borrow only unsubsidized Direct Loans. For graduate amounts, the interest begins to accrue once the loan is disbursed.
- The federal interest subsidy continues to apply to subsidized loan amounts borrowed before July 1, 2012.
Loan requests, increases and deadlines
Once you decide to borrow, request the full amount you will need for the entire academic year. Borrow your limit in Direct Loans before seeking a private loan.
If you decide not to borrow your full amount of loan eligibility, a request to increase an amount is limited to one per semester for each type of loan.
Request your loan (activate through your financial aid award on AidLink) or request an increase before the loan deadlines.
California State University Student Lending Code of Conduct
As required by the Higher Education Opportunity Act of 2008, SDSU abides by a student loan programs code of conduct.
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Loan Glossary
Use these terms to help you understand the concepts on this page.
Principal - the original amount of the loan.
Principal balance – the amount of a loan at any given time. Capitalized interest may be included.
Interest – the expense of borrowing money that is calculated as a percentage of the amount borrowed.
Accrue - The amount of interest that accumulates over time.
Capitalization –unpaid interest added to the loan principal, which increases the principal amount of the loan and its total cost.
Deferment – a postponement of payment on a loan that is allowed under certain conditions during which interest does not accrue for subsidized loans.
Grace period – a 6-month period before the first principal payment must be made on a subsidized or unsubsidized loan. The grace period begins the day after the student ceases to be enrolled at least half time.
- New - the grace period interest subsidy is temporarily eliminated on subsidized loan amounts borrowed July 1, 2012 through June 30, 2014. Interest will accrue and capitalize if not paid during the loan's grace period.
Loan fee – an expense of borrowing a loan; it is deducted from the loan amount thus reducing the amount of funds received at each disbursement.
Loan fee rebate - a percentage of the loan fee that the borrower receives up front and keeps by making the first 12 monthly payments on time after entering repayment. This applies only to loans borrowed before July 1, 2012.
Repayment – the period during which a borrower is obligated to make payment on his or her loan(s).
| Loan Components | Subsidized Loan: Based on financial need | Unsubsidized Loan: Not based on financial need |
|---|---|---|
| Enrollment Requirement | At least 1/2 time | At least 1/2 time |
| Loan Fee | 1% of the amount borrowed Due to Federal budget reduction measures (sequestration) effective March 1, 2013, fees increased to 1.051% |
1% of the amount borrowed Due to Federal budget reduction measures (sequestration) effective March 1, 2013, fees increased to 1.051% |
| Interest Rate: Undergraduate Student |
6.8% fixed rate on loans funded after June 30, 2013 3.4% fixed rate on loans funded July 1, 2011 - June 30, 2013 4.5% fixed rate on loans funded July 1, 2010 - June 30, 2011 |
6.8% fixed rate |
| Interest Rate: Teaching Credential Student |
6.8% fixed rate |
6.8% fixed rate |
| Interest Rate: Graduate Student |
6.8% fixed rate Note - there are no federally subsidized loans for graduate students on amounts borrowed after June 30, 2012. |
6.8% fixed rate Note - all graduate student loans will be unsubsidized on amounts borrowed after June 30, 2012. |
| Capitalized Interest | No interest is charged while enrolled at least half time. |
Interest is charged from the date the funds are disbursed and capitalizes if not paid. |
| Credit History | Not applicable |
Not applicable |
| Repayment | Begins 6 months (your grace period) after you cease to be enrolled at least half time. |
Begins 6 months (your grace period) after you cease to be enrolled at least half time. |
| Grace Period | A 6-month period before the first payment must be made. Interest accrues and will capitalize if not paid during the grace period of loans borrowed July 1, 2012 through June 30, 2014. |
A 6-month period before the first principal payment must be made. Interest accrues and will capitalize if not paid during the grace period. |
| Loan Components | Grad PLUS Loan | Parent PLUS Loan |
|---|---|---|
| Enrollment Requirement | At least 1/2 time |
Student must be enrolled |
| Loan Fee | 4% of the amount borrowed Due to Federal budget reduction measures (sequestration) effective March 1, 2013, fees increased to 4.204% |
4% of the amount borrowed Due to Federal budget reduction measures (sequestration) effective March 1, 2013, fees increased to 4.204% |
| Interest Rate: | 7.9% fixed rate |
7.9% fixed rate |
| Capitalized Interest | Interest is charged from the date the funds are disbursed and capitalizes if not paid. |
Interest is charged from the date the funds are disbursed and capitalizes if not paid. |
| Borrowing Limits | Graduate student can borrow up to his/her cost of attendance excluding other financial aid, resources and the annual loan limits ($20,500). |
Parent can borrow up to the student's cost of attendance excluding other financial aid, resources and the student's annual subsidized and/or unsubsidized loan eligibility. |
| Borrowing Conditions | Graduate student should have already activated his/her annual unsubsidized loan. |
Parent can borrow to pay for student's educational expenses IF student is a dependent undergraduate enrolled at least half time. |
| Credit History | Acceptable credit required |
Acceptable credit required |
| Repayment |
Usually begins within 60 days after the loan is fully disbursed (typically the spring term). There is no grace period for this loan. On loans borrowed on or after July 1, 2009: You may request a deferment while enrolled at least half time at an eligible school. Interest accumulates and capitalizes while in deferment. |
Usually begins within 60 days after the loan is fully disbursed (typically the spring term). On loans borrowed on or after July 1, 2008: Parent may request deferment of repayment while the student is enrolled at least half time. Interest accumulates and capitalizes while in deferment. |
| Class Level | Dependent | Independent |
|---|---|---|
| Freshman: 0-29 units |
$5,500 If qualified $3,500 may be in subsidized loans |
$9,500 If qualified $3,500 may be in subsidized loans |
| Sophomore: 30-59 units |
$6,500 If qualified $4,500 may be in subsidized loans |
$10,500 If qualified $4,500 may be in subsidized loans |
| Junior: 60-89 units |
$7,500 If qualified $5,500 may be in subsidized loans |
$12,500 If qualified $5,500 may be in subsidized loans |
| Senior: 90+ units |
$7,500 If qualified $5,500 may be in subsidized loans |
$12,500 If qualified $5,500 may be in subsidized loans |
| Teaching Credential | $5,500 Subsidized and or unsubsidized loans |
$12,500 If qualified $5,500 may be in subsidized loans |
| Graduate/Doctoral | Not applicable | $20,500 If qualified $8500 may be in subsidized loans All amounts borrowed July 1, 2012 or after will be unsubsidized |
Graduating Senior Loan Proration
Generally, you may borrow an amount up to your maximum annual loan limit as long as the amount does not exceed your cost of attendance minus other financial aid and resources. However, if you are a graduating senior, the amount you are eligible to borrow is reduced in certain situations.
If you are a graduating senior, you may not be able to receive the full annual amount of your subsidized and unsubsidized direct loans.
- If the time needed to complete your degree is shorter than an academic year, meaning you will graduate at the end of the fall semester, we must prorate your loan based on the number of units for which you are enrolled.
- In some cases, your loan amount must be prorated if you are graduating at the end of summer session.
| Class Level | Dependent | Independent |
|---|---|---|
| Undergraduate | $31,000 If qualified $23,000 may be in subsidized loans |
$57,500 If qualified $23,000 may be in subsidized loans |
| Teaching Credential | $31,000 If qualified $23,000 may be in subsidized loans |
$57,500 If qualified $23,000 may be in subsidized loans |
| Graduate/Doctoral | Not applicable | $138,500 If qualified $65,000 may be in subsidized loans All amounts borrowed July 1, 2012 or after will be unsubsidized |
Refer to Funding Education Beyond High School: The Guide to Federal Student Aid from the U.S. Department of Education for more information on federal loans
Federal Perkins Loan
A Federal Perkins Loan is a low-interest loan (5%) for eligible undergraduate and graduate students who have exceptional financial need. SDSU is the lender on the Perkins Loan. The loan is made from limited SDSU and federal government funds.
By completing the Free Application for Federal Student Aid, you are automatically considered for a Federal Perkins Loan. Due to limited funds, not all who qualify will receive an award. Instructions on how to accept this loan will be available through AidLink if the loan is part of your award.
Repayment begins 9 months after you are no longer enrolled at least half time. Depending on the amount you owe, payments may be extended up to 10 years. Unlike Federal Direct Loans, Perkins Loan borrowers do not have a choice of repayment options.
For more information on the Federal Perkins Loan, go to the Funding Education Beyond High School: The Guide to Federal Student Aid from the U.S. Department of Education and the Federal Student Aid Web site.
Repaying Your Loans
For Federal Direct Loans, there are several different repayment options that can help you manage your debt. The amount you pay each month and how long you take to repay your loans will vary depending on the repayment plan you select.
Refer to Repayment Plans and Calculators at the U. S. Department of Education Web site for more information. Using their online calculators you can estimate your repayment amount under each of the different plans to find one that’s right for you. You may request a different repayment plan anytime to help with your current financial situation.
The online calculators not only help you select a repayment plan when it is time to begin repaying your student loans, but the calculators also help you decide how much to borrow for your degree and career objective.
Loan Deferment
Federal student loans have certain conditions under which you may postpone repayment. You may be able to postpone repayment while you are—
- enrolled in school at least half time;
- on active duty in the military;
- temporarily unemployed or disabled, or;
- volunteering for certain qualifying organizations.
For some loans, interest continues to accrue during authorized deferment periods. The accrued interest is added to the principal amount (capitalization) and increases the total amount you must repay. Or, you may pay the accumulating interest while you qualify to defer repaying the principal balance.
For more information go to Student Aid on the Web.
Loan Cancellation Options
Under certain conditions you may be able to have a portion of your loan balance canceled for your qualifying service.
Options for Volunteers
You may be eligible for loan deferment or cancellation under the provisions of the Peace Corps Act, the Domestic Volunteer Services Act of 1973, and comparable service as a volunteer within a tax-exempt organization active in community service.
Consolidation Loan
A Consolidation Loan can help you (and your parents, if they borrowed for you) simplify loan repayment by combining several types of federal student loans into one. The repayment process is simpler.
- You make only one payment a month.
- The interest rate on the Consolidation Loan might be lower than what you are currently paying on your current loans.
The federal government has more information on loan consolidation.
Information About Your Loan History
If you are unsure about the types and amounts of student loans you borrowed, you may access your federal student loan history anytime through the National Student Loan Data System (NSLDS).
Alternative (Private) Loans
Private Loan
If you must borrow from a private lender, do your research.
Compare interest rates, up front loan costs, and repayment terms.
Alternative loans are more expensive than federal Direct Loans and should only be used when you have exhausted all other options. Borrow your limit in Direct Loans before seeking a private loan.
How to apply
SDSU will certify an alternative loan only if—
- you have completed a current FAFSA, and
- you are admitted to a degree, credential, or eligible certificate* program at SDSU, and
- you are enrolled at least half time (a minimum of 6 units for an undergraduate or teaching credential student; a minimum of 5 units for a graduate student), and
- you are making satisfactory academic progress (refer to Grades and Units Affect Aid).
*Note: Not all certificate programs, or students attending, are eligibile for financial aid programs, including private loans. Students admitted and attending only through the College of Extended Studies are not eligible.
Report the alternative loan:
An alternative loan, certified or not certified by SDSU, is a resource that you must report to this office. We coordinate your alternative loan with other aid you may be receiving.
Your aid award, including your alternative loan, cannot be more than the cost of attendance.
If you receive an alternative loan after receiving other financial aid for the semester, you may be required to repay some or all of the aid you receive. The total of all financial aid and other resources cannot exceed your cost of attendance.
When to apply
Complete the FAFSA each year after January 1. The information you supply on the FAFSA will tell us if you qualify for any state or federal aid, including federal Direct Loans.
Do NOT apply for the fall semester alternative loan until after July 1. We do not begin alternative loan processing for the academic year until August.
Choosing an alternative loan lender
You may choose any lender you wish. We do not recommend or endorse any particular lender.
To get you started, we offer these guidelines to help you determine which, if any, alternative lender you select.
Avoid deceptive offers: Follow the advice from the nation's consumer protection agency on how to spot and avoid deceptive offers and practices from private education loan lenders.
- How to avoid deceptive offers - tips from the Federal Trade Commission (FTC).
Contact your bank first: Contact the bank or credit union you use for your personal banking needs. Compare the terms of their loans with others that you research.
Lender should provide customary banking services: Choose a bank or credit union that offers checking/savings accounts, credit cards and different types of loans.
- Banks are governed by banking industry regulations helping to make their practices more consistent and stable.
Choose a lender that has been in business for a long time: You will be doing business with the lender for the next 5 to 20 years (until the loan is paid in full) and may want to choose a lender that has been in the community at least that long.
Choose a lender that services its own loans:
- Ask the lender if the product is their own loan or if they are just reselling a loan that is actually serviced or guaranteed by another lender or agency.
- Ask if they will service the loan until it is paid in full, or if they sell their promissory notes to another lender or loan servicing agency after collecting the loan processing fees. You should know with whom you will be doing business, now and when you repay your loan.
Private vs. federal loan terms: Compare private loan terms with the terms of the Federal Parent PLUS Loan. A PLUS is less expensive and has better repayment terms.
- Federal regulation now allows parent borrowers to defer repayment on PLUS loans made after July 1, 2008, while their student is enrolled at least half time.
- You will pay less interest over time with the Federal Parent PLUS Loan fixed interest rate.
Avoid high processing costs: Compare loan processing fees as well as annual percentage rates. The processing fees vary from lender to lender and some can be as high as 20% of the loan. A loan with a low interest rate but high fees can sometimes cost more than a loan with no fees but a higher interest rate. Look for a lender that does not charge any processing fees.
Repayment time or prepayment penalties: The time required to repay the total amount varies.
- Does the lender offer repayment options? A longer repayment term increases the total amount of interest paid even though the annual percentage rate may be lower than one with a shorter repayment term.
Know your lender: Compare the loan terms from the lenders you research. As a borrower of a private consumer loan, it is your responsibility to research and examine the terms and conditions offered by each lender. Points to consider—
- Lenders require a credit check and most require a cosigner.
- Interest rates vary from lender to lender and often depend on your or your cosigner’s credit score.
- The lender may or may not offer deferment or a grace period before repayment begins. Remember, with private loans, interest continues to accumulate and may capitalize during deferment.
Alternative loan disbursement
When SDSU processes an alternative loan, the information is sent to your lender. Lenders are advised that no loan funds will be disbursed prior to the beginning of each term.
SDSU will only disburse funds for an alternative loan if —
- you are an SDSU student enrolled at least half time;
- you complete a FAFSA, which enables us to determine any federal and state financial aid that may be available to you;
- you are listed as the borrower on the loan and payment is made only to you (or co-payable to you and SDSU),
- SDSU does not participate in private loan programs that allow parents or third parties to borrow a loan on behalf of the student; and
- the alternative loan will be deposited directly to your designated bank account after SDSU fees are paid.
You Must Report a Private Loan to SDSU
The total of your private loan, financial aid, and other resources, cannot exceed your cost of attendance.
Non-school certified alternative loans
There are student loans that do not require completion and signature by a school's financial aid officer. You might want to consider this type of loan if you—
- are not a United States citizen or permanent resident,
- are not making satisfactory academic progress, or
- are enrolled less than half time.
The requirements and terms vary from lender to lender, so carefully compare the terms of the lenders that you consider.
Reporting your alternative loan to SDSU
Whether an alternative loan is certified or not certified by SDSU, it is a resource that you must report to the Office of Financial Aid and Scholarships.
We will coordinate your alternative loan with the other aid you are receiving. If you receive an alternative loan after receiving other financial aid for the semester, you may be required to repay some or all of the aid you receive.
The total of all financial aid and other resources cannot exceed your cost of attendance.
Useful Web Sites
The home page of the U. S. Department of Education Direct Loan Program includes online repayment plan calculators to help you figure out what your payments could be before you commit to borrowing.
General student loan repayment information.
Direct Loan Servicer - access your loan account record (Federal Student Aid PIN required).
Review your aid history on the Department of Education's National Student Loan Data System (NSLDS).
For completing the electronic Master Promissory Notes for Subsidized and Unsubsidized Loans or PLUS Loans.
Information on Direct Loan Consolidation.
Learn how to budget your money, establish and manage credit.