What do I need to know about the borrowing process?

Many students and families rely on borrowing to finance their education and Federal student loans are often the primary source of these funds.  The Office of Student Financial Aid (OSFA) encourages students and families only to borrow when it is a necessity, rather than borrowing as a convenient way to finance their educational expenses.

Once a student and family make the decision to finance their educational expenses through borrowing, it is important they make informed and educated decisions about the type of loan(s) to borrow and the amount of borrowing required to pay their educational costs.  Factors that should be considered and discussed throughout this process include: understanding what is means to be a responsible borrower, understanding the types of loans available and the application process for each, and understanding the repayment requirements and options for any loans borrowed.

The Borrowing Process

The process of applying for all types of need-based aid, including Federal loans at the University of Illinois at Urbana-Champaign is simple.  The Free Application for Federal Student Aid (FAFSA) is required to apply for financial aid using our school code of 001775.  All students are encouraged to apply for financial assistance as soon after January 1 as possible, and before the priority filing date of March 15.

After you file a FAFSA, the information is forwarded to OSFA by the federal government. OSFA processes the information and sends award letters to students starting in March indicating the amount of financial assistance applicants will receive.

Eligible students will see any of the types of Federal loans below for which they are eligible on the award letter provided by OSFA.

When a student or family elects to borrow one of these Federal student loans, an entrance counseling process and Master Promissory Note (MPN) must be completed.  Entrance counseling is designed to help you understand what it means to take out a federal student loan and understand your borrower rights and responsibilities.  The MPN is the legal document in which you promise to repay what you borrow and any accrued interest and fees to the U.S. Department of Education.