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Federal Student Loans

It's important that you understand your options in paying for education, including having a knowledge of the loans available to you.

The Federal Direct Loan

The Federal Direct Loan program is a federally-funded, self-help program offering a way to borrow money to pay for higher education. Also known as Stafford Loans, these loans are the most common of all federal loans. For these loans, the US Department of Education is the lender and delivers the loan funds directly to the school.   Federal loans (including fees, interest rates, and limits) are dependent upon funding levels appropriated by the Federal Government and are subject to change.
At Illinois College, we will include these loans on your financial aid award letter if you are eligible to receive them.  There are two types of Federal Direct Loans that may appear on your award:

  • Federal Direct Subsidized Loan: This loan is awarded to students with financial need.  Interest does not accrue on this loan until after graduation.  (This is the most favorable type of loan).
  • Federal Direct Unsubsidized Loan: This loan is award to students who do not have financial need or whose need has been met with other types of financial aid.  Interest begins accruing on this loan immediately.

There are federal limits that specify how much loan eligibility students have each year based on the number of hours or credits the student has completed in college:

 Class Standing        

(Hours Earned)

 Annual Federal Direct Loan Eligibility

Freshman (0 - 26)

$5,500

Sophomore (27 - 56)

$6,500

Junior (57 - 87)

$7,500

Senior (88+)

$7,500

            
 Comparison of Student Loans

Loan Name

Interest Rate

(7/1/19 - 6/30/20)

Origination Fee

(10/1/19 - 9/30/20)

Repayment

Co-signer or endorser needed?

Subsidized Loan

4.53%

(no interest accrued

while enrolled)

1.059%

Begins 6 months 

after graduation or

enrolled less than

half time

No

Unsubsidized Loan

4.53%

1.059%

Begins 6 months

after graduation or

enrolled less than

half time

No

Alternative Loans

Varies

Varies

Varies - Some 

require immediate

repayment

Yes