Frequently Asked Question: Handling FFELP Loans Issued for Borrower in Same Loan Period at Different Schools

One of our students has received subsidized Stafford loans at two different schools for the same loan period. What is the obligation of the student and the school in this scenario?

A student may receive a Federal Family Education Loan Program loan for more than one school for the same period of enrollment — if the student is enrolled at least half time at each school, and the total amount of those loans does not exceed the student’s annual loan limit. 

If both schools are aware of the student’s dual enrollment when certifying the loans, then the schools must coordinate with each other to ensure that the student’s eligibility for a Stafford or Grad PLUS loan, if applicable, and the parent’s eligibility for a parent PLUS loan are determined properly. If the first school already has certified a loan for the student, the second school is required to take the following actions:

• Eliminate the student’s cost-of-living expenses from the cost-of-attendance amount, because the cost-of-living expenses were included in the COA at the first school.
• Ensure that the student does not receive loan funds in excess of the annual Stafford-loan limits at the second school and that the total amount of the loans received by the student for enrollment at both schools does not exceed the student’s highest applicable annual Stafford-loan limit, per Common Manual 5.15.

If neither school is aware of the student’s simultaneous enrollment until after both schools have certified Stafford loans, and the student receives loan funds in excess of the highest applicable annual Stafford-loan limit, then the schools must coordinate with each other to adjust the student’s aid package at one or both schools to eliminate the excess loan amount. According to Common Manual 5.15, if neither school is able to eliminate the excess loan amount, they must report the excess loan amount to the lender.

If the student inadvertently has exceeded the annual loan limit, the school may not certify or deliver any additional Title-IV aid to the student until one of the following occurs:

• The school — with the student’s authorization — reallocates the excess subsidized Stafford-loan amount to unsubsidized Stafford funds.
• The school eliminates the excess amount by adjusting future disbursements, if future disbursements are pending.
• The student repays the excess amount in full.
• The student makes satisfactory repayment arrangements for the excess amount with the lender, such as signing an agreement to repay the funds.