Federal Loans

Types of Federal Loans

You may wish to consider paying for some of your NIU expenses with federal loans, which are funded by the federal government. You must be enrolled at least half-time to receive loans (other aid may be available if not enrolled half-time). There are several types of federal loans for which you may be eligible.

If you’re a current NIU student who has a Federal Perkins Loan, contact us for more information.

Federal Subsidized Loans

Subsidized loans are offered 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 (6 hours per semester) and during periods of deferment (postponement of loan payments).
The Department of Education limits the maximum period of time that you can receive subsidized loans. Your maximum eligibility period is based on 150 percent of the published length of your program measured in academic years.

For example: If you are enrolled in a 4-year bachelor's degree program, the maximum time period for which you can receive a subsidized loan is 6 years (150 percent of 4 years = 6 years). If you are enrolled in a 2-year associate's degree program, the maximum period form which you can receive a subsidized loan is 3 years (150 percent of a 2 year = 3 years).

The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
- while you are in school at least half time,
- during a period of deferment (a postponement of loan payments), and
- for the first six months after you leave school (referred to as a grace period*).
  *Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for paying any interest that accrues during your grace period, the interest will be added to your principal balance.
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.

Federal Unsubsidized Loans

Unsubsidized loans are offered to any student eligible for financial aid regardless of Expected Family Contributions (EFC). Unsubsidized loans are not offered based on financial need. The U.S. Department of Education does not pay the interest on the loan while you are attending school - you are responsible for paying the interest that will accrue on the loan from the time the loan is disbursed until it is paid in full.

View loan limits, prorated loans, interest rates and loan fees

Federal Direct Parent PLUS Loan (for parents of dependent undergraduates)

A parent with good credit history may borrow up to the total of the estimated Cost of Attendance (COA), less all other financial aid received by the student. When completing a Parent PLUS loan application, parents are given the option of which semester(s) to apply to receive the loan. Parents who select a single semester (such as the fall semester only) should be aware that when determining the maximum allowable loan amount only the COA applicable to that period of enrollment can be considered. Additionally, if a parent requests a Parent PLUS loan for the fall semester but later wishes to have the loan applied to the spring semester, it is necessary to complete a new Parent PLUS loan application for the Spring semester. If the student will be attending the entire academic year, it is advised to apply for the Parent PLUS loan for the entire academic year. The estimated cost for an undergraduate Illinois resident can be calculated by using the NIU Planning and Cost Estimator available through the Office of the Bursar. There is no cumulative limit to the amount of PLUS loans that can be taken out over the course of an undergraduate student’s career. Filing a FAFSA is required to receive a PLUS loan.

Identify the interest rates and loan origination fees

To receive a Direct PLUS Loan:

You and your child must meet the general eligibility requirements for federal student aid.
You are the parent (biological, adoptive, or in some cases, stepparent) of a dependent, undergraduate student enrolled at least half-time at a participating school, like NIU.
You have a favorable credit history.

Learn more and apply for a Parent PLUS Loan

What if I get denied the Parent PLUS Loan? If a Federal Direct Parent PLUS Loan Application is denied, it may be possible for the student to borrow an additional amount of the Unsubsidized Direct Loan in their own name. Freshman and sophomore students are eligible to receive up to $4,000 additional unsubsidized loan, while juniors and seniors are eligible up to $5,000 additional unsubsidized loan. If a parent chooses the option of "Not Pursue PLUS Loan" or "Undecided" on the PLUS Application, the additional unsubsidized loan eligibility will automatically be offered to the student. If a parent chooses the option of "Appeal Decision" or "Pursue Endorser", the information about these processes will be provided from and should be submitted back to Direct Loan Servicing. Options for when a PLUS is denied are included on the application. The Financial Aid and Scholarship Office will proceed based on the choice made on the application.

How Refunds Work: Loans are disbursed to the Bursar account after the add/drop period is closed. If the Federal Direct Parent PLUS disbursement generates a refund after University charges are paid, the refunded amount will go to the parent unless the parent borrower indicates on the PLUS application that they authorize the refund to be sent to the student.

If the disbursement generates a parent/guardian refund, the parent borrower has the option of signing up for direct deposit. Direct deposit offers a timely, reliable and safe way to deliver your refund to your checking or savings account. Complete the Direct Deposit Form (PDF) and return it to the Bursar Office. For more information on refunds, please see the Bursar Office website.

For more information about the Direct PLUS Loan for parents, visit the Federal Student Aid website or read our Frequently Asked Questions.

Federal Grad PLUS Loan (for graduate students)

An eligible student may borrow up to the total of the estimated Cost of Attendance (COA), less all other financial aid received by the student. There is no cumulative limit to the amount of PLUS loans that can be taken out over the course of a graduate student’s career. Filing a FAFSA is required to receive a PLUS loan. When completing a Graduate PLUS loan application, students are given the option of which semester(s) to apply to receive the loan. Students who select a single semester (such as the Fall semester only) should be aware that when determining the maximum allowable loan amount only the COA applicable to that period of enrollment can be considered. Additionally, if you request a Graduate PLUS loan for the Fall semester but later wish to have the loan applied to the Spring semester as well it is necessary to complete a new Graduate PLUS loan application for the Spring semester. If you will be attending the entire academic year, it is advised to apply for the Graduate PLUS loan for the entire academic year.

To receive a Graduate Direct Plus Loan:

You must meet the general eligibility requirements for federal student aid.
You are a graduate or professional degree student enrolled at least half-time at a participating school, like NIU.
You have a favorable credit history.

Apply for a Graduate PLUS Loan.

For more information about the Direct PLUS Loan for graduate students, visit the Federal Student Aid website or read our Frequently Asked Questions.

Entrance Counseling and Master Promissory Note

For first-time borrowers of a Direct Student Loan, a student must complete entrance counseling and sign a Master Promissory Note, which is your loan agreement in which you promise to repay your loan(s) to the U.S. Department of Education.

Don't forget this step! Your loans will not be disbursed until it is complete.

Loan Request Deadlines

Requests for Federal Direct Subsidized, Unsubsidized, Graduate PLUS and Parent PLUS loans will be processed throughout the semester of enrollment. However, in order to guarantee disbursement of your loan(s), all requests - SAP, Verification, Entrance Counseling and Master Promissory Note (MPN) and the acceptance of your loan must be received by final deadline date (last week before the semester ends.) Requests received after the final deadline cannot be processed.

Regardless of the loan period, any loan you wish to borrow must be accepted before you cease enrollment. For example, if you accept a loan(s) after the end of the fall semester or have a fall loan based on spring enrollment, federal regulations prohibit us from disbursing your loan until you have official spring enrollment (at least half-time). Spring enrollment is considered official at the end of the two-week add/drop period.

National Student Loan Data System

You can view the total amount of federal loans you have borrowed on the Federal Student Aid website. This site displays information on your loan amounts, outstanding balances, loan status and loan servicer. Students and parents of students who agree to utilize a federal student loan will have their information submitted to Federal Student Aid. This system is accessible to authorized users at guaranty agencies, lenders and institutions in addition to students.