Direct Loan Proration

(Undergraduate Only)

The annual maximum loan amount an undergraduate student may receive must be prorated when the borrower 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. (Federal Handbook Chapter 5, 3-113)

At William Paterson University all undergraduate students graduating at the end of the fall semester are subject to the proration of Direct Subsidized/Unsubsidized Loans. This also pertains to the additional Unsubsidized Loan for a parent Plus denial. The additional Unsubsidized Loan amount must be prorated. This is also true for students who take a leave of absence for the fall but comes back for the spring semester and will graduate in May. Since the student has less than the academic year left in his/her study and the student did not attend in the first semester (fall) of our academic year the student is subject to proration.

Loan proration is not required when a student is full time in the fall and less than full-time in the spring and graduating in May. The cost of attendance must be adjusted from full-time enrollment for both semesters to full-time enrollment one semester and half-time enrollment for the last semester. Because the student is attending both payment periods of our academic year (fall and spring) proration is not required.

Bear in mind that loan limit proration determines the maximum loan amount that a student may borrow for a program or remaining balance of a program, not the loan amount that the student actually receives. In some cases, the actual loan amount that a student is eligible to receive (based on costs, EFC, and other aid) may be less than the prorated loan limit.

*Please note that loan proration does not pertain to PLUS or Perkins loans. Graduate student loans are also exempt from loan proration.*