Federal Direct Student Loans
Northeast Iowa Community College administers three Federal Direct Student Loans. Students must first complete the Free Application for Federal Student Aid (FAFSA) and receive notification from the College that a student loan (or loans) has been awarded and offered. The three types of loans include:
- Federal Direct Subsidized Loan: Low-interest educational loan offered by the federal government awarded on the basis of need. The federal government pays the interest while the student is enrolled at least half-time.
- Federal Direct Unsubsidized Loan: Low-interest educational loan offered by the federal government not awarded on the basis of need. The student is responsible for all interest, which occurs during any enrollment, grace, deferment or forbearance period. Students can choose to pay the interest or allow it to accumulate. If it accumulates, it will be capitalized and added to the principal amount of the loan increasing the repayment amount.
- Federal Direct PLUS (Parent) Loan: For parents of dependent students. Please contact the Financial Aid Office for more information and to request an application.
For both the Federal Direct Subsidized and Unsubsidized loans, repayment begins six months after graduation or when the student drops below half-time enrollment. The federal government withholds an origination fee from the amount borrowed.
Apply for Federal Direct Student Loan
If qualified, students may apply for the loan as long as they are enrolled and attending at least half-time (minimum six credits). All students wishing to borrow must complete the following steps, including federal requirements (steps 2-4):
- Federal Direct Loan Request form: required by ALL students requesting a loan that did not accept all of their loans through Xpress or chose to break up their loans
- Entrance Counseling: new or first-time borrowers only
- Master Promissory Note: new or first-time borrowers only
- Exit Counseling: must complete at the time of graduation, if student drops below six credits or stops attending
Know Your Loan Servicer
All students who receive Federal Direct Student Loans will be contacted by a loan servicer. It is the student's responsibility to maintain communication with the servicer regarding the status of his or her loans. The College recommends that students create an online account with their loan servicer in order to manage loan debt, track interest and communicate regularly regarding repayment options. Remember that enrollment in less than six credits (due to graduation, less than half-time enrollment or student stops out) the loan grace period will start. Know and explore available options; find out who services the loan is with the National Student Loan Data System.
The College has partnered with Inceptia, a division of National Student Loan Program (NSLP), to provide students with free assistance on Federal student loan obligations to ensure successful, and comfortable, loan repayment. Inceptia’s customer representatives may contact students during the grace period to answer questions about loan obligation and/or repayment options or delinquent loans.
Inceptia is not a collection agency. They will help students explore a variety of possibilities such as alternative repayment plans, deferment, consolidation, discharge, forgiveness, and forbearance options. Inceptia will communicate via phone calls, letters, and/or emails to answer questions and find solutions to student issues.
For additional resources including information on repayment options, please visit Inceptia’s Federal Student Loan Overview website.