Understanding your loan options and responsibilities is an important part of financing
your education. Below are answers to some of the questions we hear most often about
Federal Direct Loans, IWU Loans, Federal Nursing Loans, Parent PLUS Loans, and private
education loans.
How is my eligibility for Federal Direct Loans determined?
You must complete the
FAFSA each academic year to be considered for Federal Direct Loans. Once IWU receives your
FAFSA from the federal government, the Financial Aid Office determines eligibility
for available federal loans based on your year in school, financial need, and other
federal requirements.
Federal Direct Loans include
Subsidized and
Unsubsidized Loans.
What should I do if I am offered loans in my financial aid award summary?
You may accept the full amount offered, accept a reduced amount, or decline the loan.
You must make your loan selection through MyIWU each academic year. If you accept
any portion of a loan, you must complete the required loan documents before funds
can be disbursed.
Do I need to complete a Master Promissory Note every year?
Federal Direct Subsidized and Unsubsidized Loans: An MPN is required once when you
first borrow a Federal Direct Loan.
Federal Nursing Student Loan: A new MPN is required each academic year.
Illinois Wesleyan University Loan: A new MPN is required each academic year.
Required loan documents are completed online through the appropriate loan servicer.
Loan Repayment
Federal Direct Subsidized and Unsubsidized Loans - 6 months after you graduate, leave IWU, or drop below half-time enrollment
Federal Nursing Student Loan - 9 months after you graduate, leave IWU, or drop below half-time enrollment
Illinois Wesleyan University Loan - 6 months after you graduate, leave IWU, or drop below half-time enrollment
Less than half-time enrollment means fewer than 2 units at IWU.
Your loan servicer will provide your specific repayment schedule, payment amount,
and available repayment options.
Can I make payments on my Federal Direct Loan while I am still in college?
Yes. You may make payments on your Federal Direct Loan at any time while you are in
school, and there are no prepayment penalties. All payments need to be made directly
to your Federal Loan Servicer.
For an Unsubsidized Loan, making interest-only payments while you are in school can
help prevent accrued interest from being added to your loan balance at the time you
go into repayment.
Who can apply for a Parent PLUS Loan?
Parents, biological or step-parents, of dependent undergraduate students may apply
for a Federal Direct Parent PLUS Loan through the U.S. Department of Education. The
applicant must apply for the Parent PLUS Loan each academic year. First-time Parent
PLUS borrowers must also complete a Master Promissory Note.
What happens if a Parent PLUS Loan is denied?
If a Parent PLUS Loan application is denied because of adverse credit history, the
student may be eligible for additional Federal Direct Unsubsidized Loan eligibility:
- $4,000 for first- and second-year students
- $5,000 for third- and fourth-year students
The Financial Aid Office will contact eligible students with information about the
additional loan eligibility.
A parent may appeal the PLUS credit decision or apply with an eligible endorser.
If the Parent PLUS Loan is later approved, the additional Direct Unsubsidized Loan
eligibility based on the PLUS denial is no longer available.
What are Private Education Loans?
Private education loans are offered by banks, credit unions, and other private lenders
to help students and families pay educational expenses. Unlike federal student loans,
private education loans are generally credit-based, and interest rates, fees, repayment
terms, and borrower requirements vary by lender. IWU can certify a private education
loan up to your cost of attendance minus other financial aid you are receiving. Students
and families should carefully review the terms and conditions of a private education
loan before borrowing.
Can I get a loan to take a May Term travel course?
IWU Financial Aid is available for fall and spring semesters only. However, private
education loans may be available for May Term Travel and summer courses. Eligibility
is based on the lender’s requirements.
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Allecia Correll - Assistant Director of Financial Aid
Department - Financial Aid
