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 NICC 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. You can choose to pay the interest or allow it to accumulate. If you allow it to accumulate, it will be capitalized meaning it will be added to the principal amount of your loan and will increase the amount you have to repay.
- 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 you qualify, you may apply for the loan as long as you are enrolled and attending at least half-time (minimum six credits). All NICC 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 account 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 you drop below six credits or stop 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. NICC recommends that students create an online account with their loan servicer in order to 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 you stop out) the loan grace period will start. Know and explore your options; find out who your loan servicer is with the National Student Loan Data System.
You’re not alone when it comes to student loans. NICC has partnered with Inceptia, a division of National Student Loan Program (NSLP), to provide you with free assistance on your Federal student loan obligations to ensure successful, and comfortable, loan repayment. Inceptia’s customer representatives may reach out to you during your grace period to answer questions you have about your loan obligation and/or repayment options. They may also contact you if your loan(s) become delinquent .
Inceptia is not a collection agency. NICC has partnered with them to help you explore a wide variety of possibilities such as alternative repayment plans, deferment, consolidation, discharge, forgiveness, and forbearance options. Inceptia will stay in touch with you via phone calls, letters, and/or emails to help you find answers to your questions and solutions to your issues.
For additional resources including information on repayment options, please visit Inceptia’s Federal Student Loan Overview website.