A student must be in a degree program to be eligible for the Stafford Loan or Direct Loan. However, there are special programs that have loan eligibility limitations.
As an undergraduate, if you are graduating mid-year, such as the fall semester, by federal regulations your undergraduate Subsidized and Unsubsidized loans must be prorated based on your enrollment. This rule does not apply to full year program, but only to programs less than a full academic year. Nor does it apply to graduate students. For example, say your university's standard enrollment is 15 semester hours of credit, or 30 hours total for the academic year. If you are enrolled for 12 hours for the fall semester and graduating in December, your loan would be prorated to $2,200 for fall instead of the regular 1/2 ($2750) of your Subsidized $5,500 eligibility for the year. That's because it's your last semester, so the loan has to be prorated at 12/30 X $5,500 = $2,200 for the fall semster.
The situations listed below are instances where a student may receive a limited loan for coursework that is not part of a "normal" undergraduate or graduate degree program.
- Preparatory coursework (also called "pre-requisites") required for enrollment in an undergraduate degree or certification. Preparatory coursework cannot exceed 12 consecutive months. Loan limits are $2,625 Subsidized/Unsubsidized loan for a dependent student and $4,000 additional Unsubsidized for an independent student or a dependent student whose parent is denied the PLUS loan. Your school may only pay on those courses identified a preparatory courses by your department's chairperson or academic advisor. Courses to raise a grade point average do not qualify as preparatory courses.
- Preparatory coursework required for enrollment in a graduate or professional program. Subsidized/Unsubsidized loans are limited to $5,500 for a dependent/indepednet student, and $7,000 additional Unsubsidized loan for an independent student whose parent is denied the PLUS loan. Preparatory coursework are usually undergraduate courses required prior to entrance into a graduate or professional degree program. Your school may pay only on those courses identified as preparatory by your graduate/professional degree chairperson. Courses to raise a grade point average do not qualify as preparatory courses.
- Coursework necessary for state certification (or professional credential) required for teaching. These are students who already have a bachelor's degree but need state certification to teach. Loan limits are $5,000 for Subsidized/Unsubsidized loans, and $7,000 additional unsubsidized loan. The school will most likely verify the coursework you are taking for state certification prior to disbursing loan funds.
- Second bachelor's degree students are those who have graduated with one bachelor's degree (and even possibly a master's degree) but are returning for another undergraduate degree. These students cannot file the FAFSA as a graduate students, and dependency is determined in Step 3 of the FAFSA. Some schools will assume the student is an upper-level student and award the $5,500 Subsidized/Unsubsidized loan, while other schools (like mine) are stricter and verify the number of total semester hours required to earn the second bachelor's degree. Using the latter process, depending on how many hours are required, the loan limit may be $3,500, $4,500, or $5,500 for Subsidized/Unsubsidized and $4,000 or $5,000 for additional unsubsidized loan for independent students or a student whose parent has been denied the PLUS loan. If you are working on a second bachelor's degree, check with your financial aid office to see how they determine loan eligibility.
Keep in mind that you must be enrolled at least half-time in a program to be considered eligible for loans. If you are taking a combination of courses in more than one program, you must be enrolled at least half-time for at least one in one of the programs for the financial aid office to determine eligibility. Schools may also implement additional restrictions for these programs, depending on their university's policies. It's important to check with your college if you are planning admission to any of these programs.