Skip to main content

Federal Student Loans

Students are eligible to borrow loans from the government (co-signer free!) but there are some limitations. For example, a student must be enrolled as a part-time student and be considered "degree-seeking" in order to borrow. Be sure to review your potential eligibility, current interest rates, and borrowing limits as you plan for your educational future.

Before you receive funds from a federal loan, you must complete Entrance Loan Counseling and a Master Promissory Note.


When you graduate or stop attending Illinois State at least half time, you will need to determine your repayment options. It is important to know when you are expected to make your first loan payment. For most federal loans there is a set period of time (grace period) of six months after you graduate or stop attending at least half-time before you must begin making payments. Your loan servicer will let you know when your first payment is due. Borrowers that do not make payments on time or miss making payments become delinquent and at risk for default. For most federal loans, failure to make a payment in more than 270 days may result in loan default. Borrowers that default on a federal student loan may lose eligibility to receive student aid and may experience serious legal consequences.

Cohort Default Rate

A cohort default rate is the percentage of a school’s borrowers who enter repayment on certain federal loans during a specified period of time and default on those loans.

The latest default report by the Federal Student Aid office of the U.S. Department of Education provides loan default rate data for the years 2020, 2019, and 2018.

The most recent 2020 default rate for Illinois State University was 0%. The number of students that entered into repayment for the 2020 cohort was 4,675 students. The number of those students that defaulted on their federal student loans was 0. The National 2020 default rate is 0%. Student Loan default rates can be viewed by visiting the U.S. Department of Education’s Official Cohort Default Rates for Schools.

Note: Default rates are currently at 0% due to the Department of Education payment pause on federal student loans that began March 2020 and ended October 2023.

Reducing Your Loan Amount

Once you see your account charges (or receive your refund), you might decide you do not need to borrow that much money. You can minimize your loan debt by reducing your loan or canceling it completely.

You will get an email message about your right to cancel or reduce your loans after each term disbursement. (If your parent borrowed a Direct Parent PLUS Loan, he or she will get a message as well.)

  • If you would like to reduce or cancel your loan, the request must be completed within 30 days from the date on the notification email or letter stating that loans have been applied to the student’s account.
  • Only the borrower (person who signed the loan promissory note) may request a change to a loan. For example, a student cannot adjust a Federal Direct Parent Plus Loan because the parent is the borrower.
  • Cancellation of the first disbursement of a loan will automatically cancel the second disbursement.
  • Any refunds that have been issues may need to be returned in whole or in part.
  • Requests will be processed in a timely manner and cannot be reversed once completed.
  • If this cancellation/reduction leaves an outstanding balance on the student’s account, the balance must be paid in full to avoid penalties.
  • The borrower may reduce/cancel a loan by sending to following information:
    • Student ID Number
    • Loan to Reduce
    • Amount to reduce to (loan amount you want to keep) Round to nearest dollar.

Parent PLUS Loans

The Parent Loan for Undergraduate Students (PLUS) is a loan borrowed in a parent's name for the student's educational expenses. Before a parent applies, please consider the interest rates, origination fees, and eligibility requirements for borrowing and repaying the loan.

Already know you want the PLUS loan? Great- don't forget to complete the application and Master Promissory Note, which is typically available mid-April for the following academic year.

If a parent is denied for a parent plus loan, they have the option to request an additional unsubsidized loan for the student. They would need to choose the "Do Not Purse" option to have the loan automatically added to the students account. If any other option is chosen, they would need to send in an email to with the students first name, last name, University ID number and indicate they do not wish to pursue the Parent PLUS Loan and would like to have the additional loan added in the students name. 

Federal Nursing Loan Program

An additional federal loan option for which a student may be considered is the Nursing Loan. If a student is offered the Nursing Loan and wishes to borrow, the Financial Aid Office will require the Nursing Loan Personal Data Form to process the loan. After the form is submitted, the student will be contacted by the Student Accounts Office to sign a Promissory Note.


To be considered for this type of loan, you must:

  • File the FAFSA by the November 15 preferential filing date and indicate you are interested in student loans;
  • Fall in the lowest range for Expected Family Contribution;
  • Major in Nursing; and
  • Be enrolled at least half-time.

Terms and Conditions

  • 5% interest rate (subsidized)
  • Payments begin 9 months after the student stops attending at least half-time.
  • Freshmen and sophomores may borrow up to $5,022 per year.
  • Juniors and seniors may borrow up to $7,899 per year.
  • Graduate students may borrow up to $7,899 per year.
  • Aggregate lifetime limit is $ 24,768

Alternative Loans

Various banks offer alternative loans (also referred to as private loans) to credit-worthy applicants and co-signors. The interest rates vary and may be much higher than the rates of the federal loans, so investigate your federal loan options before choosing an alternative loan. If you choose to move forward with an alternative loan, we recommend following these easy steps:

  • Choose a lender/bank
  • Determine how much you need to borrow for the year
  • Complete the application with your lender (your lender may also need this self-certification form from you, too)
  • Once approved, follow up with our office to check on the status of your loan

Additional helpful information about alternative loans...

  • has tips on what you should know about alternative loans.
  • U.S. News and World Report has an informative article about alternative loans.