By Sheryl Ross-Mahoney, Senior Policy Specialist
The end of many spring terms is upon us — and with it comes a number of students who are changing schools for the summer or the next academic year. USA Funds Ask PolicySM
recently has received many questions on the topic of overlapping academic years
and their effect on awarding Stafford loans.
Here are answers to a few of the most frequently asked questions:
How does a school determine if a transfer student has overlapping academic years?
Your school has two options to determine if an overlap exists:
- Documented dates: Obtain documentation from the prior school of the actual begin and end dates of the student’s final academic year there.
- Assumed dates: Use the loan period data available on the National Student Loan Data System to assume that the student’s final academic year at the prior school ends on the later of:
- 30 calendar weeks after the first day of the student’s last loan period there.
- The end date for the student’s last loan period there.
If you determine that the prior school’s ending date is before the new school’s beginning date, then no overlap exists. If the prior school’s ending date is after the new school’s beginning date, however, an overlap exists.
If my school determines that an overlap in academic years exists, then how do we determine the amount of Stafford loans to originate for the transfer student?
Determine the student’s loan limit according to the student’s grade level and dependency status at the current school. For the year that “overlaps,” your school may originate Stafford loans only if that student does not exceed the annual loan limit less the amount received at the prior school.
When does the period of overlap end and the student gain eligibility for a new annual loan limit?
The end of the academic year depends on whether your school uses a borrower-based academic year or scheduled academic year.
- If your school uses a BBAY for the transfer student, generally the student’s new academic year begins with the first payment period at your school that begins after the end of the overlapping period. The end of the prior school’s academic year also may depend on the student’s academic program and whether your school accepts transfer hours from the prior school.
- If your school uses a SAY for the transfer student, the student regains eligibility for a new annual loan limit beginning with the term that follows the overlapping period. The student can receive only the amount of that student’s annual loan limit less the amount borrowed during the overlapping period at the current school.
Still need clarification? The USA Funds Ask Policy team put together a fact sheet on this topic that provides additional information and helpful examples and graphics. Take a look at that fact sheet
to learn more.
USA Funds Ask Policy with questions you have about overlapping academic years or any other federal financial aid policy issue.