Federal Direct Loan Program Loan Proration – Federal regulations require that when a student is enrolled in a program that is one academic year or more in length, but is in a remaining period of study that is shorter than a full academic year, the loan amount must be prorated.

Students who graduate in Summer Session or Fall term will have their Federal Direct Loans prorated during their final term of study.  The loan limit proration determines the maximum loan amount that a student may borrow for the final term of study. 

Prorating loan limits for remaining period of study shorter than a full academic year

Calculating annual loan limits – the annual limit for the student's grade level is multiplied by the following fraction to determine the prorated loan limit

Semester hours enrolled in program / Semester hours in academic year

Academic Year = 24 semester hours

Step #1 – Convert the fraction based on credit hours enrolled to a decimal

Step #2 – Multiply the decimal by the student's undergraduate loan maximum

Step #3 – Calculate subsidized and unsubsidized separately

Example:  Student is enrolled in 6 credit hours and will graduate at end of fall term with a Bachelor's Degree

6/24           X             $5,500                   =             $1,375                   Subsidized

6/24          X             $2,000                   =             $ 500                      Unsubsidized

You must calculate the unsubsidized separately in order to determine the maximum for each program.  In this example, the student can receive a total of $1,875; however, the maximum subsidized amount is $1,375.