Trends and Issues

Question of the week

Q.: I'm a little confused about how the new undergraduate Stafford loan limits in the Ensuring Continued Access to Student Loans Act (ECASLA) will impact undergraduates whose parents are unable to borrow a PLUS loan.

For example, if a junior, dependent undergraduate borrows the subsidized Stafford annual limit of $5,500 and the new additional unsubsidized Stafford annual loan limit of $2,000, and then the student's parents apply for a PLUS loan and are denied, is the student now eligible to borrow the new increased $7,000 ($5,000 + $2,000) additional unsubsidized Stafford annual loan limit?

A.: No. A student cannot receive both the dependent undergraduate additional unsubsidized Stafford limit of $2,000 and the increased additional unsubsidized Stafford limit for students whose parents are unable to borrow a PLUS loan — he or she can have the benefit of one or the other. The most Stafford loan funds this student can borrow for the year is $12,500 (no more than $5,500 of which can be subsidized).

This is per Dear Colleague Letter GEN-08-08, which states "Dependent, undergraduate students whose parents are unable to borrow a PLUS loan are not eligible for both the new $2,000 annual loan limit available to dependent undergraduate students and the increased $6,000 or $7,000 additional Unsubsidized Stafford Loan annual loan limit."

TG Online offers a handy chart with the new annual and aggregate Stafford loan limits that became effective July 1, 2008.

Do you have a question?
If you have a question that needs an answer, feel free to Ask TG™. Ask TG is TG's online query tool for borrowers, schools, and lenders. It includes a database of frequently asked questions about financial aid, student loan processing, and TG's products and services. To submit a question to Ask TG, visit tgslc.custhelp.com.

  Back to Top