Introduction
Under the William D. Ford Federal Direct Loan Program (Direct Loan Program), the U.S. Department of Education (the Department) makes loans to help students and parents pay the cost of attendance at a postsecondary school. This volume of the Federal Student Aid Handbook provides information to assist schools in determining student and parent eligibility for Direct Loans, counseling student borrowers, and awarding Direct Loans.
Content and organization of new Volume 8
This volume is new to the Federal Student Handbook for 2023-24. It consolidates into a single volume everything that was previously in Volume 3, Chapter 5 (“Direct Loan Periods and Amounts”), the information on Direct Loan-specific student and parent eligibility requirements that was previously in Volume 1, Chapter 5, guidance specific to Direct Loans that was previously in Volume 1, Chapter 3, and the Direct Loan counseling requirements that were previously in Volume 2, Chapter 6.
New Volume 8 also incorporates guidance on Direct Loan overawards, correcting Direct Subsidized Loan and Direct Unsubsidized Loan awarding errors, disbursing Direct Loan funds to students who begin attendance on a less than half-time basis, and inadvertent overborrowing that was previously in Volume 4, Chapter 3.
Some Direct Loan-related content previously in Volume 1, Chapter 5 and Volume 4, Chapter 3 was partially or entirely duplicated by content previously in Volume 3, Chapter 5. We have attempted to eliminate duplicative content, while ensuring that all relevant information previously in other volumes has been included in new Volume 8.
New Volume 8 is divided into seven chapters:
-
Chapter 1: Student and Parent Eligibility for Direct Loans
-
Chapter 2: Direct Loan Counseling
-
Chapter 3: Direct Loan Origination, Loan Periods, and Disbursements
-
Chapter 4: Annual and Aggregate Loan Limits
-
Chapter 5: Loan Limit Proration
-
Chapter 6: Monitoring Annual Loan Limit Progression
-
Chapter 7: Annual Loan Limits for Students Who Transfer or Change Programs
Chapter 1 consists mostly of guidance that was previously in Volume 1, Chapter 5, with additional content related to student eligibility for Direct Loans that was previously in Volume 3, Chapter 5. Chapter 2 contains the information on Direct Loan counseling requirements that was previously in Volume 2, Chapter 6. Chapters 3 through 7 include guidance that was previously in Volume 3, Chapters 1 and 5, as well as some content specific to the Direct Loan Program that was previously in Volume 4, Chapter 3, organized into different chapters by topic, as shown above.
Significant changes for 2023-2024
We have established a standard format for examples and numbered the examples sequentially within Volume 8, so that any example can be easily referenced by its number. In addition, we have simplified the examples by eliminating the use of fictitious school and student names.
In Chapter 1, in the section on “Exceptions to the ‘regular student’ requirement for Direct Loans,” we have added guidance on Direct Loan eligibility for students enrolled in teacher certification coursework. The guidance on exceptions to the regular student requirement that was previously in Volume 1, Chapter 5 covered the exception for students enrolled in preparatory coursework, but did not cover the other exception for teacher certification coursework. We also added a section on ineligible borrowers to replace a reference to the ineligible borrower provision that was previously in Volume 4, Chapter 3.
Guidance previously in Volume, 3, Chapter 5 under the heading “Resolving conflicting information in NSLDS” has been moved to Volume 1, as this topic is a general student eligibility issue that is not specific to the Direct Loan Program.
Volume 1, Chapter 5 and Volume 3, Chapter 5 of the 2022-2023 FSA Handbook included text explaining that prior regulations under which members of certain religious orders were considered to have no financial need for Direct Loans had been eliminated through a regulatory change, and that a statutory change had repealed the 150% time limit on borrower eligibility for Direct Subsidized Loans. Because these changes have now been in effect since 2021, we do not see a need to continue noting the regulatory and statutory amendments in the FSA Handbook and therefore have not included the prior text in new Volume 8.
In Chapter 2, we have updated the “Annual student loan acknowledgement” section (previously in Volume 2, Chapter 6) to reflect the most recent guidance issued by the Department.
In Chapter 3, we have added a section on determining the minimum loan period when a standard term is combined with an intersession based on guidance that has been provided to schools in Federal Student Aid training presentations.
In Chapter 4, we have added longstanding guidance on annual loan limits for associate’s degree programs that require more than two academic years of study for a full-time student to complete.
Also in Chapter 4, we have removed the definitions of “undergraduate student” and “graduate or professional student” and the discussion of Title IV aid eligibility for students enrolled in programs that lead only to a graduate or professional degree, but that may admit students who do not meet the regulatory requirements to be considered graduate or professional students. This content (previously in Volume 3, Chapter 5) has been moved to Volume 1, as it pertains to general student eligibility and is not specific to the Direct Loan Program.
In Chapter 5, we have added examples to the section on “Proration of the annual loan limit for students who graduate early from a clock-hour program” (previously in Volume 3, Chapter 5) to better illustrate the principles discussed in the text.
COVID-19 guidance and waivers
The Department of Education recognizes that the ongoing COVID-19 pandemic has created many unique challenges for postsecondary institutions. The Department has provided a variety of special guidance and regulatory flexibilities due to the President’s declaration of the COVID-19 national emergency on March 13, 2020. In addition, Congress has passed legislation offering relief from certain statutory requirements related to the Title IV, HEA programs.
The end of the COVID-19 national emergency and public health emergency will cause most COVID-19 waivers to sunset during the 2023-24 award year. For guidance on the sunset of the COVID-19 waivers and flexibilities and other COVID-19 related guidance, please see the following webpages and Electronic Announcements: