Federal Direct Loan Program

Direct loans are federal student loans that are made directly by the U.S. Department of Education.

These loan applications can be completed after you enroll for classes for the applicable semester, and will be certified after your financial aid award is determined. Understand, this is a loan that must be repaid.


Students must be enrolled in an eligible program leading to a certificate or degree and be enrolled for at least six eligible credit hours to borrow a Federal Direct Loan for any semester of attendance. Students that are in default on students loans are not eligible for student loans or any financial aid in the future.


A Federal Direct Loan Acceptance Form must be submitted for the appropriate aid year, and students who have not borrowed previously must complete loan entrance counseling and a Master Promissory Note (MPN) online.

Interest Rates & Origination Fees

Direct Loan interest rates for undergraduate students in the 2021-2022 academic year are 3.73%. Loan origination fees total 1.057% of the loan amount for loans that have a first disbursement on or after October 1, 2020, and before October 1, 2022.

Annual Limits

Dependent StudentsBase AmountAdditional Unsubsidized Loan Amount
Independent StudentsBase AmountAdditional Unsubsidized Loan Amount
These amounts are the annual maximums set by Federal regulations. Students attending Illinois Central College may not qualify for the total amounts if they are receiving grants, scholarships, Federal Work Study, waivers or other educational assistance.

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)

Disbursement of Loan Funds

Loan disbursements are completed in two payments during the loan period. If the student has requested a two semester loan (i.e. fall and spring loan), the student will receive one disbursement in each of the semesters after the census date. If the student has requested a one semester loan (i.e. fall only loan), the student 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

Return of Title IV Aid

If a recipient of Federal financial aid withdraws during a payment period (or a period of enrollment), the school must calculate the amount of aid the student earned through the date of last attendance. Unearned aid, including loans, must be returned to Federal financial aid programs.

Loan Default

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 that do not repay their student loans become ineligible for any financial aid, and loans in the future and 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 always stay in contact with the loan servicing center to stay current with address and enrollment information to help 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.

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

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 2017 National Average – 9.7

FY 207 ICC Average – 12.5

Loan Exit Counseling & Repayment

Student loan borrowers are required to 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. The six month grace period for repayment 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 notification regarding loan repayment from your loan servicer during your grace period. In order to look up your loan servicer’s name and contact information, as well as specific information on all of your student loans, go to StudentAid.gov and sign in to view your loan information.

Direct PLUS Loans

Parents of dependent undergraduate students may borrow this loan on their student’s behalf. Students must be enrolled at least half-time (6 hours). Financial need is not required, but the loan is limited to the school’s cost of attendance, which varies depending on the number of credit hours enrolled, minus other aid the student is receiving. FAFSA filing is required and parents must not have an adverse credit history.

The Direct PLUS loan origination fee is 4.228% of the total loan amount borrowed. The fee is deducted from the loan amount prior to disbursement to the borrower. The interest rate is 6.28% for the 2021-2022 academic year and is charged beginning on the date of the first loan disbursement.

Direct PLUS loan repayment begins on the date the loan is fully disbursed as there is no grace period. Payments may be deferred while the dependent student is enrolled at least half-time. A parent borrower who is also a student may defer repayment while he or she is enrolled at least half-time. Deferments must be requested by contacting the agency that services your loan.

Parents have the option to apply for a PLUS loan.

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