Student Loan Proration
When an undergraduate student’s final period of study before graduation is less than an academic year, the annual Federal Direct Subsidized and Unsubsidized Loan amounts must be prorated. Proration may result in reduced or increase loan eligibility based on enrollment. Typically, this rule impacts seniors who are graduating in December.
Three Final Periods of study less than an academic year:
- Student will graduate at the end of the Fall semester
- Student does not attend the Fall semester, and will graduate at the end of the Spring semester
- Student does not attend Fall or Spring semesters, and will graduate at the end of Summer term
How is the prorated loan amount calculated?
The formula provided by the federal government is below:
Credit Hours Enrolled / 24* = Prorated % x Annual Loan Limit
*Full-time credit hours in an academic year
In some cases, this proration may result in reduced loan eligibility, while enrollment could also result in increased loan eligibility.
What other factors could affect the loan amount offered?
- The actual loan amount may be less if you have reached your annual or lifetime loan limits prior to your graduation semester.
- The amount could also be less if your remaining Cost of Attendance (COA), after all other aid is subtracted, is less than the prorated loan amount.
What to do if you will no longer be graduating:
Your academic advisor must email FASO to let us know you have not met graduation requirements for your current degree(s) and must tell us what courses are required for you to graduate.
Frequently Asked Questions (FAQ)
If you are an undergraduate, your Federal Direct Loans must be prorated based on the number of credit hours for which you are enrolled.
Graduating undergraduate students who are only attending one term of the academic year will have their Direct Loans prorated based on the number of credit hours they are enrolled.
Note: Graduate and professional students are excluded from the loan proration requirement.
See Three Final Periods of study less than an academic year above.
Federal Direct Subsidized and Unsubsidized Loans. Note: Parent PLUS Loans are not prorated.
Your academic advisor must email FASO to let us know you have not met graduation requirements for your current degree(s) and must tell us what courses are required for you to graduate.
Your loan funding may be impacted in Spring semesters if loans were prorated in the Fall with Fall graduation anticipated.
Adjustments to loan amounts may also occur after the term census date if you have changed enrollment or if you are enrolled in more than 12 credits. If your enrollment changes before census and you are enrolled in fewer credits, you may owe money back to the university.