Loans
Federal Direct Loan Program
Students at NIACC are awarded student loans to help finance their education. NIACC participates in the William D. Ford Federal Direct Loan program. The federal government has set limits on how much money a student may borrow:
| Base Eligibility | Additional Unsubsidized Eligibility | ||
| Dependent | Freshman | $3,500 | $2,000 |
| Sophomore | $4,500 | $2,000 | |
| Independent | Freshman | $3,500 | $6,000 |
| Sophomore | $4,500 | $6,000 |
NIACC will determine the type of base loan you are eligible to receive. Direct Loans have a fixed interest rate that is set July 1st. Visit studentaid.gov/understand-aid/types/loans/interest-rates for current interest rate information.
Subsidized Loans:
Subsidized loans are loans that are based upon need. The federal government pays the interest on the loan while the student is enrolled at least half-time (6 or more credits).
** If this is your first time to borrow a student loan, the federal government wants you to understand your rights and responsibilities as a loan borrower. You will learn about your loan by completing a loan entrance counseling session. This session is found easily by logging on to the Direct Loan website. Be sure to list North Iowa Area Community College as the school that you want your results sent to so we know that you have completed your session. You will need to have your entrance counseling session completed before we can give you your student loan.
Unsubsidized Loans:
This loan is also a low-interest loan like the subsidized loan except that interest begins adding up immediately. The Financial Aid Office uses the results from your FAFSA to determine Subsidized loan eligibility before awarding Unsubsidized loans. This program was established to allow students, regardless of income, to receive student loans. The borrower is responsible for all interest which occurs during any enrollment, grace or deferment period.
** If this is your first time to borrow a student loan, the federal government wants you to understand your rights and responsibilities as a loan borrower. You will learn about your loan by completing a loan entrance counseling session. This session is found easily by logging on to the Direct Loan website. Be sure to list North Iowa Area Community College as the school that you want your results sent to so we know that you have completed your session. You will need to have your entrance counseling session completed before we can give you your student loan.
Federal Parent Loan for Undergraduate Students (PLUS):
This program for parents provides a long-term loan from the federal government. Parents may borrow up to the student’s cost of attendance less any financial aid. The application for these loans is easily done at studentaid.gov. The interest rates are fixed and change annually on July 1st. The annual interest rate cannot exceed 9%. You can view current interest rates at studentaid.gov/understand-aid/types/loans/interest-rates. Loan proceeds are put to the students account first and then the excess is sent to the parent. The Direct Loan Servicing Center will contact you to let you know the repayment amount and start date.
Unlike a loan taken out by the student, a parent PLUS loan application must go through a credit check. If the parent’s credit decision has been denied, a parent can appeal the credit decision or seek an endorser. If a parent chooses to appeal or seek an endorser, they must complete PLUS counseling at studentaid.gov before the loan will be applied towards the student’s account. If a parent chooses not to appeal or seek an endorser, they can cancel their original request. The student may apply for additional unsubsidized eligibility if the parent chooses to cancel their PLUS request.
Parents may request a deferment of principal payments until the student is no longer at least a half-time student. Parents should contact their loan servicer to request a parent loan be put into deferment. Interest continues to accrue and should be paid promptly to avoid interest capitalization.
Private/Alternative Student Loan
A private/alternative student loan is a nonfederal loan, made by a lender such as a bank, credit union, state agency or a school. If you need to borrow money to pay for college, start with federal student loans. Federal student loans include many benefits not typically offered by private/alternative loans. Content of disclosures can be found in 15 U.S.C 1638(e) (1) 12 CFR 226.47(a) in the Federal Reserve System regulations.
NIACC understands that, in certain cases, families need to pursue private loans to help bridge the gap between the actual cost of your education and financial aid package offered by NIACC. Private loans are available through private lenders and require a separate loan application. It is NIACC’s policy for students to exhaust their Federal Direct Loan eligibility before seeking private loans and to ensure that students are educated regarding the differences between federal loans and private loans and the future effects of borrowing either type of loan. Students will need to research these private loan options on their own due to restrictions placed on NIACC by federal and state regulations. NIACC does not maintain a preferred lender arrangement. Please let our office know if you have questions or would like to discuss your loan options