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Understanding Loans

Undergraduate Loans

 

Educational loans are often a necessary and, at times, a desirable way to help finance a college education. In addition to using family savings, scholarships, grants and student employment, many families may still need or want to take out loans as part of their college financing plan.  Educational loans can be obtained through the federal government or through private sources—or a combination of both. There are various types of loans for families seeking assistance in funding the family contribution toward college costs and for students for whom loans are part of the financial need-based package.  Loans are disbursed equally between the fall and spring semesters (if the student is enrolled in both semesters).  Loans can be disbursed for summer term if student was not enrolled for one of the fall or spring semesters.

WAU participates in several federal low-interest loan programs. Below are the various types of loans for families to consider. Some are need-based; others are not.


Federal Perkins Loan Program

The Federal Perkins Loan is awarded to students who demonstrate need. Award amounts depend upon the demonstrated need of the student and funding levels. To be considered for this loan, students must submit a completed FAFSA. If eligible, the financial aid award from WAU will include this loan, and WAU will be the lender. This loan has an interest rate of 5 percent, which begins to accrue nine months after graduation or when the student drops below half-time status. Repayment generally starts three months later and may continue for up to 10 years, excluding periods of deferment.


Federal Direct Loan Program

The Federal Direct Loan Program is funded by the U.S. Department of Education. To receive a Federal Direct Loan—whether subsidized or unsubsidized—applicants for admission to WAU must submit a completed FAFSA, an e-mpn and Entrance Counseling at www.studentloans.gov. The financial aid award may include one or both of the following Federal Direct Loans.

There are two types of Federal Direct Student Loans for Undergraduates Both loans require a student be enrolled at least half-time (at least 6 credits per semester):

Federal Direct Subsidized Loans: Direct Subsidized Student Loans are for students with financial need, as determined by federal regulations.  No interest is charged while you are in school at least half-time, and during a period of deferment (a postponement of loan payments).

Federal Direct Unsubsidized Loans:  Direct Unsubsidized Student Loans are not based on financial need; interest begins accruing on the date the loan is received. Applicants may choose to pay the interest only or allow it to accumulate and capitalize (added to the principal amount of the loan) until they graduate or leaving WAU.

For more complete information on the Direct Loan Program, visit the federal web site, http://www.direct.ed.gov/.

Direct Loan amounts increase each year as the student successfully matriculates. The interest rate on the Federal Direct Loan is a fixed rate. For the 2013-2014 academic year, the interest rate is 3.86 percent for first time disbursed subsidized and unsubsidized loans.

Grade Level

Maximum Subsidized

Maximum Unsubsidized

Total

Freshmen

$3,500

$2,000

$5,500

Sophomore

$4,500

$2,000

$6,500

Junior

$5,500

$2,000

$7,500

Senior

$5,500

$2,000

$7,500

An additional amount in Federal Direct Unsubsidized Loan funding is made available to an independent undergraduate student or dependent student whose parent is ineligible for a Direct PLUS loan. Those limits are as follows.

Grade Level

Maximum Subsidized

Maximum Unsubsidized

Total

Freshmen

$3,500

$6,000

$9,500

Sophomore

$4,500

$6,000

$10,500

Junior

$5,500

$7,000

$12,500

Senior

$5,500

$7,000

$12,500


Federal Direct Plus Loan for Undergraduate Students

Federal Direct PLUS Loans for Undergraduate Students (PLUS) loans funded by the U.S. Department of Education are available to credit-worthy parents. With a Direct PLUS loan, parents may borrow up to the full cost of a student's education, including tuition, room and board, books and supplies, transportation and living expenses, less any other financial aid. There are no maximum or minimum income guidelines for eligibility for the loan. Additional advantages include a 6.41% percent fixed interest rate. Interest may be tax deductible.


Private Alternative Loan Options

Private alternative loans are non-federal, private credit-based loan products offered by various lending institutions. The loans are credit dependent and may require a co-signer.  The loans generally require school certification of enrollment and eligibility information and are issued in the student's name. They can be used like a federal PLUS loan to borrow up to the cost of attendance less any financial aid. We encourage students to exhaust all federal loans described on this page before considering private loans.

Leaving school: graduating, withdrawing, or dropping below half-time

Once you are no longer enrolled at least half time in an eligible program, you'll receive a 6-month grace period (see below) on your Direct Subsidized and Unsubsidized Loans during which you are not required to make loan payments. You must begin repayment at the end of your grace period.  For more information visit Exiting Direct Loans.

National Student Loan Data System (NSLDS)

Loan Reporting

All federal student loans obtained by a student or parent are reported to and tracked on the National Student Loan Data System (NSLDS).  NSLDS loan records are accessible to all authorized NSLDS users, including schools, student loan guaranty agencies, lenders, federal agencies, and other authorized users. 

Alternative and private education loan information is not reported to NSLDS.

Accessing NSLDS

Student and parent loan borrowers may view their federal loan information at NSLDS.  Borrowers access the system using their federal PIN.  Students can also access prior federal grant information at NSLDS