Extended Eligibility for Increased Loan Limits

The Department of Education (ED) published a guidance letter (GEN-99-21), dated July 1999, that announces the extension of school eligibility to award increased unsubsidized loan amounts for the 1999-2000 academic year, due to the phaseout of the Health Education Assistance Loan (HEAL) Program. This new guidance now allows schools that have students enrolled in eligible Health Professions programs to award increased loan limits for unsubsidized loans regardless of whether the school previously participated in the HEAL Program.

Previous Guidance
In 1996, ED decided that only those schools that had participated in the HEAL Program during the last federal fiscal year in which HEAL was fully authorized, FY 1995 (October 1, 1994, through September 30, 1995), would be eligible to award unsubsidized loans in excess of the regular maximum amounts. This was because students at schools that did not participate in the HEAL program during FY 1995 (as well as those that subsequently dropped out of HEAL) became ineligible for HEAL when their school decided not to participate in the program (not because of the phaseout).

New Guidance
Section 428H(D)(2) of the Higher Education Act of 1965 (HEA), as amended, authorizes ED to increase loan limits for unsubsidized loans to certain student borrowers under the Federal Family Education Loan Program. This provision was included in the HEA to address the needs of health professions students who were affected by the phaseout of the HEAL Program.

In connection with the phaseout of HEAL, ED reviewed the initial policy limiting increased loan amounts to schools participating in HEAL during FY 1995. They determined that the completion of the phaseout of HEAL has changed the basis for the original policy and that it is not fair to health professions students to base their maximum loan amount on their schools' former participation in a program that no longer provides loans. Therefore, ED is extending to all schools the eligibility to award increased loan amounts to students enrolled in eligible Health Professions programs. This extended authority is effective for any loan period that begins on or after May 1, 1999.

Annual and Aggregate Limits
The annual unsubsidized Stafford loan limits for eligible health profession students supplement the regular Stafford loan limits the student would be eligible to receive in the same loan period, and cannot exceed the lesser of the following:

• The student's cost of attendance less other financial aid.
• The student's regular unsubsidized Stafford loan limit plus the student's applicable HEAL loan maximum.

HEAL loan maximums are specified in section 104.3.2 of the Department of Health and Human Services, Student Financial Aid Guidelines. Schools should consult this manual for determining a specific student's increased loan eligibility. The manual is available on TG Online at www.tgslc.org under Resources for Schools and Lenders, More Information. Schools must follow HEAL proration requirements and other HEAL program restrictions when awarding students increased unsubsidized Stafford loans, except that the HEAL program needs test is not required to receive the increased unsubsidized Stafford loan amount.

In general, the maximums are as follows:

• $12,500 for a nine-month academic year, not to exceed $16,667 for a 12-month academic year for students enrolled in a bachelor or master of science in pharmacology, graduate of public health, doctor of chiropractic, doctoral degree in clinical psychology, or masters or doctoral degree in health administration.
• $20,000 for a nine-month academic year, not to exceed $26,667 for a 12-month academic year, for students enrolled in doctoral programs in allopathic medicine, osteopathic medicine, dentistry, veterinary medicine, optometry, and podiatric medicine.

Health profession students who are eligible for increased unsubsidized Stafford loans may receive an aggregate amount of $189,125. Subsidized Stafford loans may comprise no more than $65,500 of this amount. Undergraduate five-year bachelor of pharmacology students may receive an aggregate amount of $70,625. Subsidized Stafford loans may comprise no more than $23,000 of this amount.

Questions
If your school receives guarantee rejects from Texas Guaranteed Student Loan Corporation (TG) because of system edits that are currently in place but your school otherwise qualifies as an eligible school to award increased unsubsidized loan amounts per ED's new guidance, you should immediately contact TG Loan Guarantee Operations at (800) 446-5616, or send an e-mail message to lgo.helps@tgslc.org.

Schools are responsible for monitoring loan limits. However, TG edits serve as a backup to ensure that loans are not guaranteed if the loan amount exceeds statutory limits. Please be aware that if these edits are removed for your school to facilitate the guarantee of increased unsubsidized loan amounts for eligible Health Professions students, the edits are removed for all students at your school.

If you have questions about letter, contact Vanessa Freeman in ED's Program Development Division of the Office of Student Financial Assistance at (202) 708-8242, or send an e-mail message to vanessa_freeman@ed.gov.