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Federal Direct Loans



Beginning with the 2010-11 school year, Federal Direct Loans will be processed at Gavilan College.  These loans assist students from both low- and middle-income families. Students must meet the minimum eligibility requirements, which includes enrollment in at least six units at the college. Students who demonstrate need for a portion or all of the annual limit will receive a subsidized loan from the federal government, where no interest is due to for the period of time in which the student is eligible for an in-school deferment and for the duration of any grace period.

Students who do not demonstrate need for part or all of the annual borrowing limit may still receive an unsubsidized loan and pay their own interest during the time they are in-school.

Annual loan limits are based on grade levels.  Please view chart below for your annual loan limit.  **Borrow only what you need as federal student loans have "aggregate loan limits" - which allow you to borrow up to combined maximum while you are in college.  Therefore, plan accordingly, especially if you will transfer to a 4-year university.

The Federal Direct PLUS loan is available to parents of dependent students wishing to borrow on behalf of their dependent in order to meet the cost of attendance.

Disbursement will be made to the parent. The annual borrowing limit is the difference between the cost of attendance and the estimated financial assistance.

Interest rates

Fixed Rate Loans
Loan Type Date of First Disbursement Fixed Interest Rate
Direct Subsidized Loans
Undergraduate Students
7/1/13–6/30/14 3.86%
Direct Unsubsidized Loans Undergraduate Students 7/1/13-6/30/14 3.86%
Direct Unsubsidized Loans (Graduate or Professional Students) 7/1/13-6/30/14 5.41%
Direct PLUS Loans (Parents & Graduate or Professional Students) 7/1/13-6/30/14 6.41%

*Graduate and professional students are not eligible to receive Direct Subsidized Loans for loan periods beginning on or after July 1, 2012.


Signing Master Promissory Note

Sign Master Promissory Note (MPN) online or by paper MPN- For NEW Direct Loan Borrowers

Online Signature of the MPN: Go directly to www.studentloans.govLog on to your account.

  • Select the “Complete Master Promissory Note” link (middle section).
  • Select Type of Loan: Subsidized/Unsubsidized.
  • Complete the following sections:
    •  Personal Information
    • School Information: From drop down menus- Select California and Gavilan College
    • Personal References
    • Terms & Conditions
    • Review & Sign
  • Print a copy for your records.
  • The completed MPN will be processed by the Department of Education (Federal Government).
  • The Financial Aid Office will receive notification of completed MPNs once a week.

Paper Signature of the MPN: You may print a paper MPN from  

  • Log on to your account.
  • On Left Hand side, under Master Promissory Note section, select: Print MPN option.
  • Select Type of Loan: Subsidized/Unsubsidized.
  • Open the PDF file.
  • Review your demographic information. 
  • If information is correct, print MPN.
  • Complete Section A7: References
  • Complete Section B8- School information (Name: Gavilan College; address: 5055 Santa Teresa Blvd. Gilroy, CA 95020; Section B9- School Code/Branch: 001202-00; Section B10- Identification Number: Leave this part blank).
  • Review Sections C and D.
  • Sign and Date MPN.
  • Keep a copy for your records.
  • Mail Original MPN (our office recommends certified mail, for tracking purposes) to:

Standard Mail                                                            

U.S. Department of Education                                    

P.O. Box 5692                                                            

Montgomery, AL 36103                                              


Overnight Mail

U.S. Department of Education

201 Techna Center Dr.

Montgomery, AL 36117


Annual Loan Limits for Direct Subsidized Loans & Direct Unsubsidized Loans


Dependent Undergraduate Students

Independent Undergraduate Students

First Year (*freshman)


(maximum $3,500 subsidized)


(maximum $3,500 subsidized)

Second Year (*sophomore)


(maximum $4,500 subsidized)


(maximum $4,500 subsidized)



Freshman:  Student who has completed less than 30 units of college coursework.

Sophomore:  Student who has completed at least 30 units of college coursework. 


**Aggregate Loan Limits:  Maximum Total Outstanding Loan Debt


Dependent Undergraduate Students (a)

Independent Undergraduate Students (a)


$31,000 (b)

(maximum $23,000 subsidized)

$57,500 (c,d)

(maximum $23,000 subsidized)



$138,500 (d)



(a) Dependent students who parents are unable to get PLUS loans are eligible to receive the independent undergraduate loan limits

(b) Excludes dependent students whose parents are unable to borrow PLUS loan.

(c) Includes dependent undergraduates whose parents are unalbe to borrow PLUS loan.

(d) The graduate/professional degree student maximum includes Stafford loans received for undergraduate study.

Last modified: August 15, 2013
Gavilan College Red Diamond 5055 Santa Teresa Boulevard Red Diamond Gilroy, CA 95020 Red Diamond (408) 848-4800