How to Pay for Indiana University: Financial Aid and Student Loan Options

Christy Rakoczy

Updated on September 4, 2020

September 4, 2020September 4, 2020Paying for CollegeFeatured, Student Loans1763Christy RakoczyMichael GalvisSEO

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Indiana University is a highly regarded school with nine campuses and regional centers across the state, including its flagship campus in Bloomington. If you’re interested in attending this school, you’ll want to know how to finance your education, including getting Indiana University student loans.

Thankfully, there are many financing options, including federal and private student loans, as well as the Cox scholarship program, which offers six separate scholarships for students attending IU.

To finance your Indiana University education, you’ll want to start by filling out the Free Application for Federal Student Aid (FAFSA) and then seek out the following funding sources:

To pay for Indiana University, start with the FAFSA

To get federal aid — including loans, grants and work-study — for Indiana University, you must first complete the Free Application for Federal Student Aid (FAFSA). The FAFSA can be completed online, and you’ll need to provide basic information about your financial situation. If you’re an undergraduate and aren’t considered independent of your family, you’ll also have to include information about your parent or guardian’s income.

The FAFSA becomes available Oct. 1 for the following school year and you should complete it as soon as possible, as some forms of aid are limited in funding and offered on a first-come, first-served basis. The sooner you apply, the better chances you have of gaining access to federal grant and work-study programs, which you’ll also need to fill out the FAFSA for.

Grants for Indiana University students

Federal grants and other types of grants and scholarships are a great option to pay for your Indiana University education because they generally don’t need to be repaid, as loans will. Because of that, you should consider maxing out your grant and scholarship possibilities before taking out any kind of loan.

Grants are usually made available to students with financial need. Through the federal government, you can also get work-study positions that provide part-time employment while you’re in school. There’s also EARN Indiana, a state-run work-study program providing paid internship opportunities specifically for Indiana resident students with financial need that attend in-state schools.

Consider these grants to pay for Indiana University:

• Federal Pell Grants: Undergraduates can receive these need-based grants for up to 12 semesters. Amounts can change yearly.
• Federal Supplemental Educational Opportunity Grants: Through this program, you can earn up to $4,000 a year depending on your financial need.
• Indiana state grants: As you research funding opportunities, check out our guide to state grants. You’ll see that Indiana offers need-based grant aid through the Commission for Higher Education. The Frank O’Bannon Grant, for instance, offers up to $9,200 in the 2020-21 academic year for Indiana students depending on their school of choice (and even has incentives available for a student’s performance in school). The Adult Student Grant allows working adults to receive $2,000 toward beginning or continuing their higher education.

Scholarships for Indiana University students

Many scholarships are based on merit rather than or in addition to need, and the criteria may even consider your background, unique talents or field of study. If you’re part of any specific organizations or groups, check to see if you qualify for any scholarships offered by them.

Indiana University has an Office of Scholarships that may assist you as you seek funding. Using its search tool, you can find a wide range of scholarships offered to in-state and out-of-state students, as well as incoming freshmen. The scholarship categories on the site include first-year scholarships, transfer student scholarships, nontraditional student scholarships and non-IU scholarship options.

Among the scholarships you can find here are:

• Cox Scholars Program: This donor-funded Indiana University scholarship program offers a series of scholarships for incoming and current students:
  • Cox Access Scholarship (nontraditional Indiana resident students)
  • Cox Civic Scholarship (Indiana resident freshman students with a commitment to social justice causes)
  • Cox Engagement Scholarship (Indiana resident freshman students with a commitment to community service)
  • Cox Exploratory Scholarship (Indiana resident freshman students with a commitment to college peer assistance and mentorship)
  • Cox Legacy Scholarship (Indiana resident students committed to developing career skills)
  • Cox Research Scholarship (Indiana resident students committed to scholarly research)
• Dean’s Scholarship (IU Academic): Incoming out-of-state students with high academic performance can become eligible based on information provided on their admission application. The award amount ranges from $1,000 to $11,000.
• IU Global Engagement Scholarship: This scholarship is offered to incoming freshman international students who are high academic achievers. The award amount ranges from $1,000 to $11,000.
• Provost’s Scholarship (IU Academic): This scholarship is offered to incoming Indiana resident students with high academic achievement. The award amount ranges from $1,000 to $8,000.
• Annexstad Family Foundation Award: The foundation provides a total award of $25,000 distributed over a maximum of five years as part of the Leaders for Tomorrow Scholarship. This award is based on merit and financial need and is especially aimed at students who have overcome adversity.
• Indiana County Bicentennial Scholarship: This scholarship awards incoming freshmen from select counties in Indiana. Qualifying students will receive a $2,500 annual scholarship over four years to attend Indiana University Bloomington.
• Hudson & Holland Scholars Program: This program is for high-achieving minority students and provides a $6,000 renewable scholarship, along with partnership scholarships and support services. Primary consideration is given to applicants who are part of an underrepresented population.
• Office of Disability Services for Students Scholarships: These scholarships provide funds for students with disabilities to help offset tuition costs for Indiana University. The award amounts vary.
• Phi Theta Kappa Transfer Scholarship: This is awarded each year to high-performing students who are transferring to Indiana University. Recipients must be members of the Phi Theta Kappa international honor society and have an overall 3.5 cumulative GPA. The award amount is $3,000 for one academic year.
• Students in Transition Scholarships: These scholarships of varying amounts are available for nontraditional students who have traveled unique paths and may have taken a break from college. Scholarships are available from these five funds:
  • The Bloomington Business and Professional Women’s Organization
  • Ford P. Hall Scholarship
  • Myron and Babs Forman Scholarship Fund
  • Osher Reentry Scholarship
  • Returning Student Services Fund

These are just some of the scholarships available on the site. To see the entire list for each category, you can go to their scholarships page.

There are also many scholarship opportunities outside of what Indiana University offers. You can use these scholarship search tools to help get started looking for scholarships from multiple sources.

Federal student loans

Federal student loans are usually (though not always) superior to private student loans due to all the benefits and protections the former come with.

Options for federal loans include:

• Direct subsidized loans: These are need-based loans available to undergrads. The government covers interest charges while you’re in school, during your grace period and during any periods of deferment.
• Direct unsubsidized loans: Undergraduate and graduate students are eligible for direct unsubsidized loans, regardless of financial need. You’ll accrue interest while loans are deferred, including while you’re still in school.
• Direct PLUS loans: Graduate students and parents can qualify for PLUS Loans, but unlike with other direct loan programs, you can’t have bad credit. Interest isn’t subsidized on these loans.
• Direct consolidation loans: These loans allow you to combine all your federal loans into one loan with one servicer.

There are annual and aggregate limits on direct loans, but you should consider maxing out this source of funding before turning to private loans, as noted above. Students who have borrowed from the federal government can benefit from income-driven repayment options. Direct loan borrowers also have the option of Public Service Loan Forgiveness after working in a qualifying job. It’s also easier to qualify for forbearance and deferment programs when you have federal loans.

Direct loans, other than the PLUS loan, don’t require students to have good credit or proof of income to qualify, and fixed interest rates and origination fees are set by the federal government.

Private student loans

If you’ve exhausted all other funding options, you may consider private student loans. These loans are offered by private institutions, such as banks, credit unions and online lenders, and can help you cover remaining educational expenses.

Unlike federal loans, private student loans don’t generally offer you benefits similar to those of federal loans, such as loan forgiveness options or the opportunity to adjust your payments according to your discretionary income. Although some lenders may allow you to pause payments if you face financial hardship, this isn’t a feature for all private student loans. Furthermore, you’ll need to meet credit requirements to get private student loans — that means you may need a cosigner to qualify if your credit might not be considered adequate by the lender.

Still, while there are clear downsides to private student loans, you can find loans with reasonable terms if you shop around. If you have solid credit and are confident in your ability to repay your loans, this form of private debt may allow you to secure a lower interest rate than the ones offered on federal student loans.

Shopping around is important when you’re considering private loans. You’ll find that different lenders may offer different interest rates, loan repayment options and eligibility criteria. You can go here to compare and contrast private student lenders.

Final thoughts on paying for Indiana University

Knowing how to pay for Indiana University requires a lot of legwork. To start, remember to fill out the FAFSA as soon as you’re able — that application will be key as you seek federal money to pay for school.

Before turning to student loans, both federal and private, you can exhaust your options for grants, scholarships and work-study programs. That way, you can minimize the amount of debt you’ll have to repay after graduation.

For further help on financing your education, please see our guide to paying for college and how tuition works, as well as our complete guide to federal student loans.

Rebecca Stropoli contributed to this report.