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[[*1* Throughout this letter, subsidized Direct Stafford/Ford Loans and subsidized Stafford Loans will be referred to as "Subsidized Loans," and Direct Unsubsidized Stafford/Ford Loans and Unsubsidized Stafford Loans will be referred to as "Unsubsidized Loans." This letter does not address PLUS or Consolidation Loans. *2* The term "base" amount refers to the Subsidized Loan and/or Unsubsidized Loan amounts that are equal to the annual and aggregate Subsidized Loan limits applicable to undergraduate and graduate borrowers, as described in 685.203(a), 685.203(d), 682.204(a), and 682.204(b). The term "additional" Unsubsidized Loan amounts refers to the Unsubsidized Loan amounts available to independent undergraduate borrowers, dependent borrowers, whose parents do not qualify for PLUS Loans, and graduate borrowers, as described in 685.203(c) and 682.204(d). *3* The terms "grade level 1" and "grade level 2" in this letter refer tot the academic level of borrowers who have not yet successfully completed the first or second year of an undergraduate program, respectively. Similarly, the terms "grade level 3" and "grade level 4" refer to the academic level of borrowers who have successfully completed the first and second years of an undergraduate program but have not yet successfully completed the third or fourth year of an undergraduate program.]] [[This file contains the "Direct Loan AND FFEL Program Loan Maximums" chart in Portable Document Format (PDF). It can be viewed with version 3.0 or greater of the free Adobe Acrobat Reader software. ]] EXAMPLES: LOAN ELIGIBILITY DEPENDENT UNDERGRADUATE BORROWER LIMITS A dependent borrower is eligible to receive a COMBINED AGGREGATE Subsidized and Unsubsidized loan amount of up to $23,000. If the borrower has not reached the $23,000 limit, the borrower may qualify for the ANNUAL loan amount applicable to his or her grade level. To calculate the borrower's remaining AGGREGATE eligibility, subtract the Subsidized and Unsubsidized Loan amounts the borrower has received from the aggregate loan limit of $23,000. EXAMPLE 1: A grade level 3 dependent undergraduate borrower who has received $10,000 in Subsidized Loans and $13,000 in Unsubsidized Loans is ineligible for any additional loans because the borrower has reached the AGGREGATE undergraduate limit for a dependent student. The dependent undergraduate limit applies to the COMBINED amount of Subsidized and Unsubsidized Loans received. Example 1: Determining a Dependent Borrower's Remaining Aggregate Eligibility aggregate dependent undergraduate loan limit $23,000 minus amount of Subsidized Loans received - 10,000 minus amount of Unsubsidized Loans received - 13,000 remaining aggregate eligibility 0 EXAMPLE 2: A grade level 3 dependent undergraduate borrower has received $5,000 in Subsidized Loans and $8,000 in Unsubsidized Loans. The borrower is eligible for an additional $10,000 in combined Subsidized/Unsubsidized Loans. In the third year, the student could receive the ANNUAL maximum combined Subsidized/Unsubsidized amount of $5,500. The amount of Subsidized Loans the borrower could receive is based on a need determination that takes into account the student's EFC. Example 2: Determining a Dependent Borrower's Remaining Aggregate Eligibility aggregate dependent undergraduate loan limit $23,000 minus amount of Subsidized Loans received - 8,000 minus amount of Unsubsidized Loans received - 5,000 remaining aggregate eligibility $10,000 INDEPENDENT UNDERGRADUATE BORROWER LIMITS An independent undergraduate borrower (or a dependent borrower whose parent does not qualify for a PLUS Loan) is eligible to receive an AGGREGATE amount of up to $23,000 in Subsidized Loans. In addition, the borrower is eligible for an AGGREGATE amount of up to $46,000 in Unsubsidized Loans, minus the amount of Subsidized Loans received. Even if the borrower has received $23,000 in Subsidized Loans, the borrower may qualify for the maximum independent borrower ANNUAL loan limit in Unsubsidized Loans. To calculate the borrower's remaining AGGREGATE Subsidized Loan eligibility, subtract the Subsidized Loan amount the borrower has received from the AGGREGATE Subsidized Loan limit of $23,000. To calculate the borrower's remaining aggregate Unsubsidized Loan eligibility, subtract the Subsidized and Unsubsidized amounts the borrower has received, including any new Subsidized amounts awarded, from the aggregate Unsubsidized Loan limit of $46,000. EXAMPLE 3: A grade level 3 independent borrower who has received $23,000 in Subsidized Loans and $0 in Unsubsidized Loans is eligible for AGGREGATE Unsubsidized Loans of up to $23,000 and an ANNUAL Unsubsidized Loan of up to $10,500 (as shown on the chart above). Example 3a: Determining an Independent Borrower's Remaining Aggregate Subsidized Loan Eligibility aggregate undergraduate limit for Subsidized Loans $23,000 minus amount of Subsidized Loans received - 23,000 remaining aggregate Subsidized Loan eligibility 0 Example 3b: Determining an Independent Borrower's Remaining Aggregate Unsubsidized Loan Eligibility aggregate independent undergraduate limit for Unsubsidized Loans $46,000 minus amount of Subsidized Loans received - 23,000 minus amount of Unsubsidized Loans received - 0 remaining aggregate Unsubsidized Loan eligibility 23,000 An independent undergraduate borrower who has received a COMBINED amount of Subsidized and Unsubsidized Loans that equals or exceeds the $23,000 dependent borrower AGGREGATE limit continues to be eligible for Subsidized Loans until the borrower reaches the $23,000 Subsidized limit. In addition, the borrower continues to qualify for Unsubsidized Loans until the borrower reaches the combined $46,000 Subsidized/Unsubsidized AGGREGATE limit. EXAMPLE 4: A grade level 4 independent borrower has received $15,000 in Subsidized Loans and $10,000 in Unsubsidized Loans. Under the AGGREGATE limit, the borrower is eligible for an additional $8,000 in Subsidized Loans (based on need). In addition, the borrower is eligible for an AGGREGATE Unsubsidized Loan amount of $46,000, minus the amount of Subsidized and Unsubsidized Loans already received (in this case, the remaining amount is $21,000). Thus, in the fourth year, the borrower could receive the annual maximum Subsidized Loan amount of $5,500 and $5,000 in an Unsubsidized Loan, for an annual maximum of $10,500. Example 4a: Determining an Independent Borrowers Remaining Aggregate Subsidized Loan Eligibility aggregate undergraduate limit for Subsidized Loans $23,000 minus amount of Subsidized Loans received -15,000 remaining aggregate Subsidized Loan eligibility 8,000 Example 4b: Determining an Independent Borrower's Remaining Aggregate Unsubsidized Loan Eligibility aggregate independent undergraduate limit for Unsubsidized Loans $46,000 minus amount of Subsidized Loans received - 15,000 minus amount of Unsubsidized Loans received - 10,000 remaining aggregate Unsubsidized Loan eligibility 21,000 Note: The borrower's aggregate Unsubsidized Loan eligibility is reduced by any new Subsidized Loans awarded. In Example 4b above, if the borrower received the annual maximum of $5,500 in Subsidized Loans for the current academic year, the borrower's aggregate eligibility for Unsubsidized Loans would be $15,500 ($21,000 - $5,500). GRADUATE BORROWER LIMITS A graduate borrower is eligible for an AGGREGATE amount of up to $65,500 in Subsidized Loans. In addition, the borrower is eligible for an AGGREGATE amount of up to $138,500 in Unsubsidized Loans, minus the amount of Subsidized Loans received. Even if the borrower has received $65,500 in Subsidized Loans, the borrower may qualify for the maximum graduate borrower ANNUAL loan limit of $18,500 in Unsubsidized Loans. To calculate the borrower's remaining AGGREGATE Subsidized Loan eligibility, subtract the Subsidized Loan amount the borrower has received from the AGGREGATE Subsidized Loan limit of $65,500. To calculate the borrower's remaining aggregate Unsubsidized Loan eligibility, subtract the Subsidized and Unsubsidized amounts the borrower has received from the AGGREGATE Unsubsidized Loan limit of $138,500. EXAMPLE 5: A graduate borrower who has received $65,500 in Subsidized Loans and $0 in Unsubsidized Loans is eligible for AGGREGATE Unsubsidized Loans of up to $73,000 and an ANNUAL maximum of $18,500 in Unsubsidized Loans (as shown on the chart above). Example 5a: Determining a Graduate Borrower's Remaining Aggregate Subsidized Loan Eligibility aggregate graduate limit for Subsidized Loans $65,500 minus amount of Subsidized Loans received - 65,500 remaining aggregate Subsidized Loan eligibility 0 Example 5b: Determining a Graduate Borrower's Remaining Aggregate Unsubsidized Loan Eligibility aggregate graduate loan limit for Unsubsidized Loans $138,500 minus amount of Subsidized Loans received - 65,500 minus amount of Unsubsidized Loan received - 0 remaining aggregate Unsubsidized Loan eligibility 73,000 A graduate borrower who has received a COMBINED amount of Subsidized and Unsubsidized Loans that equals or exceeds the $65,500 AGGREGATE Subsidized limit continues to be eligible for Subsidized Loans until the borrower reaches the $65,500 Subsidized limit. In addition, the borrower continues to qualify for Unsubsidized Loans until the borrower reaches the combined $138,500 Subsidized/Unsubsidized AGGREGATE limit. EXAMPLE 6: A graduate borrower has received $35,000 in Subsidized Loans and $30,000 in Unsubsidized Loans. The borrower is eligible for an additional $30,500 in Subsidized Loans, assuming he or she had the need. In addition, the borrower is eligible for an AGGREGATE Unsubsidized Loan amount of $138,500, minus the amount of Subsidized and Unsubsidized Loans already received (in this case, the remaining amount is $73,500). Thus, the borrower could receive the maximum ANNUAL Subsidized Loan amount of $8,500 and the $10,000 Unsubsidized Loan amount, for a total of $18,500. Example 6a: Determining a Graduate Borrower's Remaining Aggregate Subsidized Loan Eligibility aggregate graduate limit for Subsidized Loans $65,500 minus amount of Subsidized Loans received - 35,000 remaining aggregate Subsidized Loan eligibility 30,500 Example 6b: Determining a Graduate Borrower's Remaining Aggregate Unsubsidized Loan Eligibility aggregate graduate limit for Unsubsidized Loans $138,500 minus amount of Subsidized Loans received - 35,000 minus amount of Unsubsidized Loans received - 30,000 remaining aggregate Unsubsidized Loan eligibility 73,500 Note: The borrower's aggregate Unsubsidized Loan eligibility is reduced by any new Subsidized Loans awarded. In Example 6b above, if the borrower received the annual maximum of $8,500 in Subsidized Loans for the current academic year, the borrower's aggregate eligibility for Unsubsidized Loans would be $65,000 ($73,500 - $8,500). DEPENDENCY STATUS CHANGES AND PLUS LOAN ELIGIBILITY CHANGES If a borrower received loans as an independent student for one year or more, but then becomes a dependent student, special calculations are required to determine the borrower's remaining loan eligibility. A borrower's status could change from independent to dependent if a financial aid administrator (FAA) had used professional judgment to grant an otherwise dependent borrower independent status because of special circumstances and those circumstances have changed or the FAA at another school chooses not to make the same professional judgment decision. In addition, if a borrower (under the age of 24) qualified as independent in a previous year because the borrower had a dependent or was married and that condition changes, the borrower would now be considered dependent. In calculating the now dependent borrower's remaining aggregate eligibility, the school should total only those portions of loans previously received that represent "base" amounts. Any "additional" Unsubsidized Loan amounts that the borrower received are not included because they were provided only because of the prior independent status. In order to include only the loan amounts that were part of the base, schools should determine the borrower's total base amount received (annual base loan limits are shown on the chart below) and count only those base amounts against the dependent undergraduate aggregate limit of $23,000. If a dependent borrower was previously eligible for the independent borrower loan limits because his or her parent did not qualify for a PLUS Loan and then becomes eligible only for the lower dependent borrower limits because the parent becomes eligible for PLUS, the same calculations discussed above for changes in dependency are required to determine the student borrower's remaining eligibility. The example on the following pages illustrates the calculations necessary to include only the "base" loan amounts that the borrower received while his or her parent did not qualify for a PLUS Loan. The chart below shows base and additional amounts that should be used to calculate loan eligibility for a borrower who changes dependency status or who was previously eligible for additional Unsubsidized Loan amounts because a parent did not qualify for PLUS Loans. [[This file contains the "Direct Loan AND FFEL Program Loan Maximums" chart in Portable Document Format (PDF). It can be viewed with version 3.0 or greater of the free Adobe Acrobat Reader software. ]] EXAMPLE: An otherwise dependent borrower who qualified as an independent student based upon a professional judgment determination during the first three years of the program received $6,625 ($2,625 Subsidized and $4,000 Unsubsidized) in the first year of his program, $7,500 ($3,500 Subsidized and $4,000 Unsubsidized) in the second year of the program, and $10,500 ($5,500 Subsidized and $5,000 Unsubsidized) in the third year for a total of $24,625. In the fourth year of the program, the borrower becomes dependent. Because the borrower is now a dependent student, the school must include only the base amounts of loans received in order to calculate the borrower's remaining AGGREGATE eligibility. The school should calculate the total base amount the borrower has received, by totaling the annual base limits applicable to this borrower (assuming that the borrower had borrowed at least up to the base amount). Once the school has determined the total base amount the borrower has received, the school should subtract this amount from the dependent undergraduate limit of $23,000 to determine the student's remaining eligibility. In this example, the student has received a base amount of $11,625 ($2,625 + $3,500 + $5,500). Therefore, in the third year, the borrower has remaining AGGREGATE eligibility of $11,375 ($23,000 - $11,625) and is eligible for the grade level 4 dependent undergraduate ANNUAL loan limit of $5,500 (Subsidized and/or Unsubsidized Loans). If this adjustment were not made the student would not have had any aggregate eligibility remaining. Determining the Additional Amount a Dependent Borrower has Received base Subsidized/Unsubsidized Loan limit in year 1 2,625 plus base Subsidized/Unsubsidized Loan limit in year 2 3,500 plus base Subsidized/Unsubsidized Loan limit in year 3 + 5,500 total base amount received 11,625 Determining a Dependent Borrower's Remaining Eligibility aggregate dependent undergraduate loan limit $23,000 minus base Subsidized/Unsubsidized Loans received - 11,625 remaining base Subsidized/Unsubsidized Loan eligibility 11,375 |