Loans

You have a choice about how you pay for your education.

A Minute to Learn It – Borrowing Student Loans

1 min

Play Next

• Applying for a Federal Direct Loan
  1 min
• What is the Annual Student Loan Acknowledgement?
  1:30 min
• What is a PLUS Loan?
  1:10 min
• What is a Parent PLUS Loan?
  1:23 min
• What if I drop a course or withdraw?
  32 sec
• Loan Exit Counseling
  1:06 min
• Federal Student Loan Repayment
  1:04 min
• What is a Private Loan?
  1:16 min

Federal Direct Loans

Federal Direct Loans are money the government lets you borrow to help pay for college, but you have to pay it back later.

Here is a simple way to think about it. It’s your dream to go to college, but it costs a lot of money, like buying a car or a house. If you don’t have enough money right now, the government can lend it to you through a Federal Direct Loan.

Here are the basics:

• You borrow the money now.
• Use it to help you pay for things like tuition, books, or housing.
• After you finish college or take classes less than half-time, you’ll have to start paying the money back, little by little.

When you apply for financial aid, you might be offered loans as part of your financial aid offer. Visit Federal Student Loan to apply or learn more.

You must be enrolled in an eligible program leading to a certificate or degree and have at least six eligible credit hours to borrow a Federal Direct Loan for any semester. Students who default on student loans do not qualify for student loans or any financial aid – until the default has been resolved with the Federal Government.

• How to Borrow Federal Funds

  Federal loans that are offered to students need to be accepted or declined in MyICC. 

  Students with an SAI of -1500 to 3000 are not automatically offered loans, as part of a default management practice, but do have the opportunity to borrow loans if needed to pay for college. Navigate to the eForms Workcenter in MyICC and submit the Loan Adjustment Form.

  If you’re a first-time borrower, you must also complete loan entrance counseling and a Master Promissory Note (MPN) online at StudentAid.gov.
• Loan Acceptance and Refunds

  You can accept or decline your federal loan(s) for the semester you want to use loan funds.

  Loans will be certified for the amount requested or for the amount you are eligible for, if less than the requested amount. If you are enrolled in fewer than 12 credit hours and/or have a period of enrollment shorter than the full semester, your cost of attendance is adjusted, and your loan award could be recalculated. 

  Any change in your enrollment status (drop, add, or withdrawal) after your loan is certified by ICC may require additional recalculation and revision of your original loan amount. 

  Please refer to your class schedule for the refund dates of your classes.
• Interest Rates & Origination Fees
  • Direct Loan interest rates for undergraduate students in the 2025-2026 academic year are 6.39%. Loan origination fees total 1.057%.
  • Direct PLUS Loans disbursed on or after July 1, 2025, and before July 1, 2026, have an interest rate of 8.94%. Loan origination fees total 4.228%
• Lifetime Loan Limits
  • Undergraduate Dependent Students = $31,000 (no more than $23,000 of which can be subsidized)
  • Undergraduate Independent Students = $57,500 (no more than $23,000 of which can be subsidized)
• How Loans Are Disbursed (Paid)

  Loan disbursements are completed in two payments during the loan period. If you have requested a two-semester loan (i.e., fall and spring loan), you’ll receive one disbursement in each of the semesters after 30 days from the start of the term. If you want a one-semester loan (i.e., only a fall loan), you will receive two disbursements in the semester. The second disbursement is processed after the midterm.

  Per Federal Regulations, disbursements for first-time loan borrowers are not processed until 30 days after the start of the semester (approximately the 5th week of the academic semester).
• Situations That May Delay or Cancel Your Loan
  • Enrollment in late start, courses taken during the 2nd 8-Weeks of the semester, may delay your loan until after these classes start.
  • Changes in your enrollment may require a recalculation of your loan eligibility.
  • Dropping below six credit hours will result in the cancellation of undisbursed loan funds.

   

Federal Direct Student Loan Annual Limits

Loan Exit Counseling and Repayment

Student loan borrowers must complete Student Loan Exit Counseling after ceasing at least half-time enrollment at Illinois Central College. This includes graduating, withdrawing, dropping courses, and leaving or transferring from ICC.

Student loans enter repayment six months after ceasing enrollment in at least six credit hours. This is a one-time grace period. If the student has used the six-month grace period in the past, repayment will begin immediately after falling below an enrollment level of at least six credit hours.

You will receive a notification regarding loan repayment from your loan servicer during your grace period. To look up your loan servicer’s name, contact information, and details on your student loans, go to StudentAid.gov.

• Watch a video about Exit Counseling.
• Watch a video about Loan Repayment.

What if I Can’t Pay Back My Loan?

Student loan default, or failing to repay your student loan debt, carries serious consequences. When taking out a student loan, you want to exhaust all other possible funding methods and borrow conservatively. Students who are in default on their student loans are not eligible for any financial aid until the default is resolved. Defaulted loans prevent students from renewing professional licenses.

The Federal Government can collect on defaulted loans by confiscating federal tax refunds and wage garnishment. It is the student’s responsibility to stay in contact with the loan servicing center to keep their address and enrollment information up to date, which helps avoid default.

If you and your loan servicer disagree about the balance or status of your student loan, and you have done everything you can to resolve the issue, you can contact the Federal Student Aid Ombudsman Group. They can help you find some resolution to the matter.

Please use the following information to contact the FSA Student Loan Ombudsman Group:

US Department of Education
FSA Ombudsman Group

830 First Street, N.E., Mail Stop 5144
Washington, DC 20202-5144

(877) 557-2575
(202) 275-0549 — Fax
StudentAid.gov

Cohort Default Rate

A cohort default rate is the percentage of a school’s borrowers who enter repayment on certain Federal Family Education Loan (FFEL) Program or William D. Ford Federal Direct Loan (Direct Loan) Program loans during a particular federal fiscal year (FY), October 1 to September 30, and default or meet other specified conditions prior to the end of the second following fiscal year.

• FY 2019 National Average – 2.3%
• FY 2019 ICC Average – 3.4%

Private Loans

Private loans, also known as alternative loans, provide another borrowing option. Although the FAFSA is not required, private loans may have varying interest rates and limited repayment options. You should consider alternative loans as a “last resort” lending option. Watch What is a Private Loan?

Illinois Central College will certify private education loan requests for any lender you choose. The lender you choose will provide current interest rates, processing fees, and co-signer requirements. The lender determines interest rates for loans based on the student’s and co-signer’s credit. The Office of Financial Assistance does not endorse, recommend, or promote any lender for private loans.