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:

NIACC will determine the type of base loan you are eligible to receive based on your FAFSA results. Federal Direct Loans have a fixed interest rate, which is set annually on July 1.
For current interest rate information, visit: https://studentaid.gov/understand-aid/types/loans/interest-rates

Student Loan Repayment Overview

Federal student loans offer flexible repayment options and protections. Learn more at: https://studentaid.gov/manage-loans/repayment

Subsidized Loans:

• Need-based loan: Eligibility is determined by financial need.
• Interest benefit: The federal government pays the interest while you are enrolled at least half-time (6+ credits).
• Entrance Counseling Required:
• If this is your first time borrowing a student loan, you must complete Loan Entrance Counseling at https://studentaid.gov.
  • Be sure to list North Iowa Area Community College so NIACC receives your results.
  • This must be completed before your loan can be disbursed.

Unsubsidized Loans:

• Not need-based: Available to students regardless of income.
• Interest accrues immediately: You are responsible for all interest during enrollment, grace, and deferment periods.
• Eligibility: NIACC will award Subsidized loans first (if eligible) before awarding Unsubsidized loans.
• Entrance Counseling Required: Same process as Subsidized loans.

Federal Parent PLUS Loans:

• For parents of dependent students: Parents may borrow up to the student’s cost of attendance minus other aid.
• Application: Complete at https://studentaid.gov.
• Interest rate: Fixed, changes annually on July 1 (cannot exceed 9%). Current rates: https://studentaid.gov/understand-aid/types/loans/interest-rates
• Credit check required:
  • If denied, parents may appeal, seek an endorser, or cancel the request.
  • If appealing or using an endorser, PLUS Counseling is required at https://studentaid.gov.
• Repayment: Loan proceeds apply to the student’s account first; excess funds go to the parent. Parents may request deferment while the student is enrolled half-time. Interest accrues during deferment.

Private/Alternative Student Loans:

• Non-federal loans: Offered by banks, credit unions, or other lenders.
• Start with federal loans first: Federal loans offer benefits not typically available with private loans.
• NIACC policy:
  • Students should exhaust Federal Direct Loan eligibility before seeking private loans.
  • NIACC does not maintain a preferred lender list.
• Research required: Students must research private loan options independently due to federal/state restrictions.
• Questions? Contact NIACC Financial Aid Office for guidance.