Loans are money borrowed from a financial institution, the Federal Government, or the university to pay for college expenses and must be repaid.
- To be considered, students must request loan funds via the FAFSA.
- Students must complete a master promissory note for all loans before funds are credited to their account.
- Federal Direct Loan Program: These loans are low interest loans available to students enrolled at least half time. The interest rate is fixed. Interest is paid by the government on federally subsidized (need-based) loans. Interest will be charged beginning when the loan is disbursed on unsubsidized (non-need-based) loans. Repayment begins six months after graduation or when the student drops below half-time status.
Direct Loan Rights and Responsibilities
If you accept a Federal Direct Loan, you will not be borrowing from a bank. Direct Loans are loans made with federal capital and owned by the federal government. Loan repayments are made to the government through one of their service providers.
How to Accept Federal Loans via One.IU
There are two types of Direct Loans available to students—subsidized and unsubsidized.
Subsidized loans are federal loans which the government pays the interest on while the student maintains at least half-time enrollment.
If a student receives an unsubsidized loan, he or she is expected to pay the interest while enrolled in school or have it capitalized. Unsubsidized loans can replace Student Aid Index (SAI).
The Office of Financial Aid uses information provided on the FAFSA to determine loan eligibility. Once the loan is accepted, a Master Promissory Note is signed and funds are transmitted to the school, they will credit directly to your University student account.
Bursar's Loan Cancellation/Reduction Request Form
Please note: Because IU South Bend participates in the Direct Loan program; we do NOT process Subsidized, Unsubsidized Stafford Loans or PLUS Loans through private lenders.
Federal Parent Loans for Undergraduate Student (PLUS): The PLUS program provides an opportunity for parents of dependent undergraduate students to borrow through the Direct Loan program. Repayment begins within 60 days of disbursement of the loan.
Parent PLUS loan applications may only be submitted electronically. Parents will need to complete the form at studentaid.gov by using the SIGN IN button and following these additional steps.
- Request a Direct PLUS Loan,
- Select Parent Plus at the bottom of the page,
- Complete the application, and
- Submit the application.
Loans for Graduate Students
Graduate students often receive help with graduate school expenses through government and private education loans, which all must be repaid. IU South Bend graduate students may be eligible for a Federal Direct Loan. However, those who do not qualify for a federal loan should consider applying for an alternative loan through a private lending institution.
All graduate students receiving a loan from the government must complete a master promissory note and an Entrance Interview before loan funds are credited to their account. The promissory note and forms are available online at https://studentaid.gov.