Understanding Loans

Undergraduate Loan Options

In addition to using family savings, scholarships, grants, and student employment, many families may need loans as part of their college financing plan. Educational loans are often a desirable way to help finance a college education. Educational loans can be obtained through the federal government, 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 need-based financial package. Loans are disbursed equally between the fall and spring semesters (if the student is enrolled in both semesters). Loans could be disbursed for the summer term if the 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.

1. Federal Direct Loan Program

The Federal Direct Loan program is funded by the U.S. Department of Education and consists of a Subsidized Loan and an Unsubsidized Loan. To receive a Federal Direct Loan, applicants for admission to WAU must submit a completed the online FAFSA, MPN, Entrance Counseling, and Annual Student Loan Acknowledgment Counseling at https://studentaid.gov/

There are two types of Federal Direct Student Loans for undergraduates. Both loans require a student to be enrolled at least half-time (at least six credits) per semester. The financial aid award may include one or both of the following Federal Direct Loans.

    • 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 or allow it to accumulate and capitalize (added to the principal amount of the loan) until they graduate or leaving WAU.

For complete information on the Direct Loan Program, visit the federal website https://studentaid.gov/.

Direct Loan amounts increase each year the student successfully matriculates. The interest rate on The Federal Direct Loan is a fixed rate. For the 2020-2021 academic year, the interest rate is 2.75 percent for first-time disbursed Subsidized and Unsubsidized Loans for undergraduate students. For the 2021-2022 academic year, the interest rate is 3.73 percent for first-time disbursed Subsidized and Unsubsidized loans for undergraduate students.

Grade LevelMaximum SubsidizedMaximum UnsubsidizedTotal

An additional amount in Federal Direct Unsubsidized Loan funding is made available to an independent undergraduate student or a dependent student whose parent is ineligible for a Direct Plus Loan. The limits are 

Grade LevelMaximum SubsidizedMaximum UnsubsidizedTotal

2. Federal Direct Plus Loan for Parents of Dependent Undergraduate Students 

Direct Plus Loans are federal loans that parents of dependent undergraduate students can use to help pay for their student’s education.

Federal Direct Parent Plus Loans for undergraduate students (plus) loans funded by the U.S. Department of Education are available to creditworthy parents. 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. The fixed interest rate for 2020-2021 is 5.30 percent. The fixed interest rate for the 2021-2022 academic year is 6.28 percent. A parent borrower can apply for a direct parent plus loan and complete the MPN and the annual student loan acknowledgment online at https://studentaid.gov/. A parent can request a six-month deferment after your student graduates, leaves school, or drops below half-time enrollment. Contact your loan servicer for more information.

For complete information on the Direct Parent Plus Loan program, visit the federal website https://studentaid.gov/.

Leaving School: Graduating, Withdrawing, or Dropping Below Half-Time

Once you are no longer enrolled at least half-time in an eligible program, you may receive a 6-month grace period 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  https://studentaid.gov/.

National Student Loan Data System: 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 servicers, and federal agencies.

Accessing NSLDS

Student and parent loan borrowers may view their federal loan information at https://studentaid.gov/. Borrowers access the system using their federal FSA ID.  

3. Private Alternative Loans

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 cosigner, generally require school certification of enrollment and eligibility information, and are issued in the student’s name. The loans can be used 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.

Private alternative education loan information is not reported to NSLDS.

Washington Adventist University does not have a preferred lending arrangement.


For more information about financial aid at WAU, email finaid@wau.edu, or call 301.891.4005 or 1-800-835-4212 to speak to a financial aid advisor.

Student Financial Aid
Washington Adventist University
7600 Flower Avenue, Suite 351
Takoma Park, MD 20912
email: finaid@wau.edu
phone: 301-891-4005
toll-free: 800-835-4212
general fax: 301.560.5364