Policy Frequently Asked Question: Awarding Loan Funds for One Term

I have an undergraduate student who is enrolled for the full academic year, including both fall and spring terms. But the student wants to take out loans only for one term. Should I award the student half the annual loan amount of the subsidized Stafford loan and half the amount of unsubsidized Stafford loan for the year?

Unless the loan is subject to proration, a school is required to certify a student’s entire eligible loan amount, even if the loan period is only a single term. A school may not refuse to certify a loan for a student — and for the full amount for which the student is eligible — unless it does so on a case-by-case basis, document the student’s file with the reason for the reduction or refusal, and communicate the reason to the student.

There are only a few scenarios in which a school may choose to limit loan certification or to refuse to certify a loan. A school may limit or refuse certification in cases in which the school is aware that the student does not intend to repay the loan, or when the school is aware that the student has other resources with which to meet the educational costs, for example.

Schools are required to prorate a loan if the student’s program of study is longer than a year but the student is enrolled in a final period of study that is less than a full academic year, or the student’s actual program of study is less than a full academic year.