Types of Financial Aid

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Federal Direct Subsidized and Unsubsidized Loans

Direct Subsidized and Unsubsidized Loans are low interest loans for students that are borrowed directly through the U.S. Department of Education.

Applying for a Direct Student Loan

To apply for a Direct Student Loan, a student must complete the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov, and complete a Master Promissory Note and Entrance Counseling at www.studentloans.gov.  NIU automatically offers loan eligibility with the initial award notification.  A request to have a student's loan eligibility reviewed can be made by contacting the Student Financial Aid Office.  See the chart below for information on loan limits.

There are two types of Direct Student Loans:

Subsidized Loans

  • Subsidized loans are awarded based on financial need as determined by the FAFSA. The U.S Department of Education will pay the interest on the loan while you are attending school at least half-time and during periods of deferment (postponement of loan payments).  For loans received prior to July 1, 2012, the Department of Education will also pay the interest for the first six months after you leave school (grace period). However, for loans received after July 1, 2012, the interest will start accruing during the grace period. For periods of enrollment beginning on or after July 1, 2012, (Fall 2012 and beyond), Graduate and Professional students are no longer eligible to receive Direct Subsidized loans.

Unsubsidized Loans

  • Unsubsidized loans are awarded to any student eligible for financial aid regardless of Expected Family Contributions (EFC). Unsubsidized loans are not awarded based on financial need. The U.S. Department of Education does not pay the interest on the loan while you are attending school - the student is responsible for paying the interest that can accrue on the loan from the time the loan is disbursed until it is paid in full.
Maximum Direct Loan Limits
Academic Level Base Direct Loan Amount Subsidized & Unsubsidized Additional Unsubsidized Loan for Undergraduate Students Additional Unsubsidized Loan for Independent Undergraduates & Dependent Students with PLUS Denial Federal Direct Loan Lifetime Aggregate Maximum
Freshman                       (0-23 cumulative hours) $3,500 $2,000 $4,000 Dependent Undergraduate: $31,000 – No more than $23,000 of this amount may be in Subsidized Loans. Independent Undergraduate & Dependent Student with PLUS Denial: $57,500 – No more than $23,000 of this amount may be in Subsidized Loans.

Independent Undergraduate & Dependent Student with PLUS Denial: $57,500 – No more than $23,000 of this amount may be in Subsidized Loans.
Sophomore                    (24-47 cumulative hours)          $4,500 $2,000 $4,000
Junior/Senior & Post-Baccalaureate    (48+ cumulative hours) $5,500 $2,000 $5,000
All Eligible Student-at-Large & Post Baccalaureate pursuing a teachers certification $5,500 $2,000 $5,000
Graduate & Professional Prior to June 30, 2012 $8,500 $0 $12,000 $138,500 – No more than $65,500 of this amount may be in Subsidized Loans. The graduate debt limit includes Stafford Loans received for Undergraduate study.
Graduate & Professional with Loan Periods beginning after July 1, 2012 $0 $0 $20,500 $138,500 - No more than $65,500 of this amount may be in Subsidized Loans.  The Graduate debt limit includes Stafford Loans received for Undergraduate study.
NOTE: The amounts shown in the charts above are the maximum amounts that you may borrow for an academic year effective July 1, 2013. You might receive less than the maximum if you receive other financial aid that is used to cover a portion of your cost of attendance. The maximum amount that you may borrow will also be less in certain situations, such as if you are an undergraduate student enrolled in a program of study that is shorter than an academic year. Your school can refuse to certify your loan or can certify a loan for an amount less than you would otherwise be eligible for if the school documents the reason for its action and explains the reason to you in writing. The school’s decision is final and cannot be appealed to the U.S. Department of Education. 

Undergraduates Graduating After the Fall Semester


If an undergraduate student will graduate after the fall semester ends, loans are required to be prorated based on the number of credit hours in which the student is enrolled.

Fall Only Prorated Loans
Credit Hours/Semester Subsidized* Dependent
Unsubsidized
Independent
Unsubsidized or Plus Denial
21 $4,812 $1,751 $6,126
20 $4,583 $1,667 $5,834
19 $4,354 $1,584 $5,542
18 $4,125 $1,500 $5,250
17 $3,896 $1,417 $4,958
16 $3,667 $1,333 $4,666
15 $3,437 $1,251 $4,376
14 $3,208 $1,167 $4,084
13 $2,979 $1,084 $3,792
12 $2,750 $1,000 $3,500
11 $2,521 $917 $3,208
10 $2,292 $833 $2,916
9 $2,062 $751 $2,626
8 $1,833 $667 $2,334
7 $1,604 $584 $2,042
6 $1,375 $500 $1,750

* Subsidized loan amounts are subject to need analysis

**Loans for 5 hours or less will NOT disburse because they are not half time

***Any loans awarded are subject to lifetime aggregate limit review

Interest Rates


Undergraduate Students Subsidized Loan Unsubsidized Loan
Federal Direct Loans disbursed from
July 1, 2009 until June 30, 2010
Fixed Interest Rate of 5.6% Fixed Interest Rate of 6.8%
Federal Direct Loans disbursed from
July 1, 2010 until June 30, 2011
Fixed Interest Rate of 4.5% Fixed Interest Rate of 6.8%
Federal Direct Loans disbursed from
July 1, 2011 until June 30, 2012
Fixed Interest Rate of 3.4% Fixed Interest Rate of 6.8%
Federal Direct Loans disbursed from
July 1, 2012 - June 30, 2013
Fixed Interest Rate of 3.4% Fixed Interest Rate of 6.8%
Federal Direct Loans disbursed from
July 1, 2013 - June 30, 2014
Fixed Interest Rate of 3.86% Fixed Interest Rate of 3.86%
Graduate Students Subsidized Loan Unsubsidized Loan
Federal Direct Loans disbursed after
July 1, 2006
Fixed Interest Rate of 6.8%    Fixed Interest Rate of 6.8%
Federal Direct Loans disbursed after
July 1, 2012 - June 30, 2013
N/A Fixed Interest Rate of 6.8%
Federal Direct Loans disbursed after  
July 1, 2013 - June 30, 2014
N/A Fixed Interest Rate of 5.41%

For all Direct Subsidized and Direct Unsubsidized Loans that disbursed prior to December 1, 2013 there was a 1.051% origination fee.  After December 1, 2013 the origination fee for Direct Subsidized and Direct Unsubsidized Loans is 1.072%.

All Direct Subsidized and Direct Unsubsidized Loans first disbursed before July 1, 2006 have a variable interest rate. The interest rate on these variable rate loans is changed on July 1st of each year.

Consolidation loans disbursed under the Direct Loan Program can have either a fixed or variable interest rate depending on when the application was received.

For more detailed charts of historical interest rates, click here.

Repayment of Direct Student Loans


You will need to start making payments on your student loans after you are no longer enrolled at least half-time with the university and after your grace period has ended. The Direct Loan Program offers borrowers several repayment plans to help you pay on time.  Repayment of Direct Student Loans