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Student Loans — Frequently Asked Questions

Heartland Community College will participate in the federal Stafford and PLUS Direct Loan programs beginning with the Fall 2008 semester.

Federal Stafford and PLUS loans are educational loans that must be repaid with interest, so we encourage you to consider all other options for financing your education first and use a student loan only as a "last resort." Think carefully before you borrow under these loan programs because there are serious consequences to not repaying student loans.

Under the federal Direct Loan program, loan eligibility is determined by the Heartland Financial Aid Office and the loans are actually made by the U.S. Department of Education.

What types of student loans are available?

There are two types of loans available, Stafford Loans for students and Parent Loans for Undergraduate Students (PLUS) for parents.

How do I qualify for a Stafford Loan?

You must complete the Free Application for Federal Student Aid (FAFSA) in order to be considered for a Stafford loan.  There are two types of Stafford Loans: subsidized and unsubsidized.

A subsidized Stafford loan is a need-based loan which means that students must demonstrate need according to data submitted on the FAFSA. Interest begins accruing on the loan at the time the loan funds are disbursed, but the federal government pays (subsidizes) the interest for you while you are enrolled in school on at least a half-time basis.

An unsubsidized Stafford loan is not based on need. Interest begins accruing on the loan at the time the loan funds are disbursed and you are responsible for paying the interest while you are in school. Interest can be capitalized which means you will not have to pay the interest while in school, but the interest accruing is added to the amount you borrow, so the loan amount continues to increase.

To be considered for a Stafford Loan you must meet the following eligibility requirements:

  • Apply for financial aid using the FAFSA
  • Have a completed and verified if necessary, student aid record on file
  • Complete a Stafford Student Loan Request Form
  • Be admitted to HCC in a degree seeking program or approved certificate program
  • Meet Satisfactory Academic Progress Standards
  • Be enrolled in at least six credit hours
  • Not be in default on any educational loan, show an unwillingness to repay an educational loan, or owe any refund on a grant or student loan

How much can I borrow under the Stafford Loan Program?

Under the Stafford loan program (both subsidized and unsubsidized combined) you may generally borrow up to $3,500 as a freshman and up to $4,500 as a sophomore. Under special circumstances, dependent students may be eligible to borrow additional funds of up to $2000 and independent students may be eligible to borrow additional funds of up to $6,000. Need for the additional funds will be considered on a case by case basis.

What is the interest rate on Stafford Loans?

For the 2008-2009 academic year, the interest rate on subsidized Stafford loans is 6% and the interest rate on unsubsidized Stafford loans is 6.8%

What is a PLUS Loan?

A PLUS loan is a loan that parents of dependent students can receive to cover educational expenses for their dependent undergraduate student.

How do parents apply for a PLUS Loan?

The first step is completing the FAFSA. Eligibility for a PLUS loan will not be considered until eligibility for a Stafford loan is first considered. In addition to completing the FAFSA, parents should complete a Heartland PLUS loan application, available from the financial aid office.

How much can a parent borrow, and what is the interest rate on the loan?

Parents can borrow up to the cost of education at Heartland, less any financial aid their student is receiving.

The current interest rate is 7.9% and interest accrues on the PLUS loan as soon as the loan is disbursed. Repayment of the loan begins within 60 days of the loan being fully disbursed.

What is Entrance Loan Counseling?

Because borrowing under the Stafford loan program is a serious financial obligation that should not be entered into lightly, all students who borrow a Stafford loan must complete an entrance loan counseling session before loan funds can be disbursed.

The entrance loan counseling session is designed to inform students about their rights and responsibilities as a borrower, explain the importance of loan repayment and make sure that students understand the consequence of defaulting on a student loan.

Students can complete online loan counseling through the U.S. Department of Education's Web site. Click on the Entrance and Exit Counseling option and then select "Take the Entrance Counseling Session."

Financial aid advisors are available to answer any questions students have about information contained in the online loan counseling. Please contact the Financial Aid Office if you have any questions.

How do I complete my Master Promissory Note?

Because Stafford loans must be repaid with interest, all students borrowing under the Stafford loan program, must sign a promissory note each time they borrow. This is your promise to repay the loan and it is a legally-binding document between you and the U.S. Department of Education.

Once your student loan request is processed by the Heartland Financial Aid Office and you receive an award letter indicating the amount you are eligible to borrow, you need to complete the Master Promissory Note (MPN). The MPN is completed online through the U.S. Department of Education.

If you have any questions about completing the MPN, contact the Financial Aid Office.

What is Exit Loan Counseling?

Before a student graduates or drops below half-time attendance, an exit loan counseling session must be completed. The exit loan counseling session will review your repayment obligation, provide information regarding typical monthly repayment amounts based on various levels of borrowing, explain deferment and forebearance options and stress the serious consequences of defaulting on a federal student loan. In-person exit loan counseling sessions will be scheduled with students during their last semester of attendance. Online exit loan counseling is available for students under certain circumstances.

Please contact the financial aid office if you have any questions concerning the exit loan counseling requirement.

Who can I contact with questions?

Financial Aid Office
Community Commons Building (CCB), Room 1106
1500 W. Raab Rd.
Normal, IL 61761
(309) 268-8020
Email: Financial Aid