USA Funds Policy Team Addresses Recent Aggregate Loan Limit Increase

An April 18 Dear Colleague Letter from the U.S. Department of Education announced an increase in the aggregate Stafford loan limit for graduate and professional students enrolled in certain approved health profession programs. USA Funds^®’ policy advisers outline the following key points regarding this new aggregate limit:

• Effective for unsubsidized Stafford loans first disbursed on or after April 18, 2008, for loan periods that end on or after April 18, 2008, eligible students may borrow subsidized and unsubsidized Stafford loan funds up to a total outstanding principal of $224,000.
• Subsidized Stafford loan funds may comprise no more than $65,500 of that sum.
• This change to the aggregate loan limit acknowledges the increase in annual loan limits mandated by the Higher Education Reconciliation Act of 2005. The change does not permit schools to certify higher annual loan limits than those previously outlined in statute, regulation and common policy.
• These newly increased aggregate loan limits do not apply to students enrolled in non-health profession courses of study or in health profession courses that are not covered under the extended loan limits noted in regulation and common policy. These students still may borrow no more than an aggregate Stafford loan amount of $138,500, and subsidized Stafford loans may comprise no more than $65,500 of that amount.
• If a school already has certified a Grad PLUS loan for the period for which the new aggregate is applicable, the school may choose to cancel or amend that certification. The school then may certify additional unsubsidized Stafford funds for that student in addition to or in lieu of the Grad PLUS funding, up to the limits of the student's cost of attendance minus other aid for the loan period. 
• The new aggregate loan limits are applicable only for loans that are first disbursed for loan periods that end on or after April 18, 2008. Note that a school must certify a Federal Family Education Loan Program loan prior to the student's last date of at least half-time attendance or the date of the student's withdrawal, whichever is earlier. The school may deliver the loan funds as a “late disbursement” after the student ceases at least half-time attendance, if the loan is certified prior to that point.
• USA Funds is working with its guarantor-servicer to make the necessary system updates to permit loans to guarantee for the affected students when they exceed the previous aggregate loan limits, and anticipates implementing those changes by May 16. Schools may submit loan certifications based on the new aggregate loan limits starting on that date.

Until those changes are complete, schools should not submit loan certifications that exceed the previous aggregate limit for these students.

For more information about the increase in aggregate loan limits for graduate and professional students in certain health profession programs, contact USA Funds’ policy staff.