student	to	earn	that	number	of	credits.	For	instance,	if	your	school	has	a	baccalaureate	program	that	requires	120
semester	hours	of	work	and	is	typically	completed	in	four	academic	years,	then	you	might	use	a	standard	of	30	hours
completed	at	each	grade	level.
Standard	Term	and	SE9W	Nonstandard	Term	Programs:	Grade	Level	Progression	Within	the	Same	Academic	Year
In	standard	term	programs	or	SE9W	nonstandard	term	programs,	a	student	who	has	already	received	the	full	annual	limit
within	an	academic	year	can	receive	additional	loan	funds	if	the	student	progresses	to	a	grade	level	with	a	higher	annual
loan	limit	during	that	same	academic	year.	(See	
Volume	3,	Chapter	1	for	a	discussion	of	academic	year	requirements.)
Increasing	the	Loan	Amount	When	a	Student9s	Grade	Level	Changes	During	an	Academic	Year
There	are	two	options	for	awarding	an	additional	loan	amount	when	a	student	progresses	to	a	grade	level	with	a	higher
annual	loan	limit	during	an	academic	year:
1.	 Originate	a	new	loan	at	the	new	grade	level	for	the	difference	between	the	new	loan	limit	and	the	amount	of	the	first
loan.	The	loan	period	for	the	new	loan	must	correspond	to	the	term(s)	during	which	the	student	qualifies	for	the
higher	loan	limit.	You	could	also	choose	to	cancel	any	pending	disbursements	of	the	first	loan	and	originate	a	new
loan	for	an	amount	equal	to	the	canceled	disbursements	of	the	first	loan	plus	the	additional	amount	for	which	the
student	is	eligible	due	to	the	grade	level	change.
2.	 Adjust	the	amount	of	the	current	loan.	Change	the	grade	level	in	the	loan	record	and	increase	the	amount	of	the
existing	loan	to	the	new	amount.
With	either	option,	the	student9s	remaining	loan	eligibility	must	be	calculated	using	only	the	COA	and	OFA	for	the	term(s)
during	which	the	student	qualifies	for	the	higher	loan	limit.
As	a	reminder,	a	student	can	progress	to	a	higher	grade	level	during	an	academic	year	only	in	a	program	with	standard
terms	or	SE9W	nonstandard	terms.
Volume	8,	Chapter	6,	Example	8:	Grade-Level	Progression	Within	the	Same	SAY
A	dependent	second-year	undergraduate	student	qualifies	for	the	maximum	annual	combined	subsidized	and
unsubsidized	annual	loan	limit	of	$6,500,	not	more	than	$4,500	of	which	may	be	subsidized.	For	purposes	of	this
example,	assume	that	the	student	is	eligible	to	receive	the	maximum	$4,500	in	Direct	Subsidized	Loan	funds	and
the	remaining	$2,000	in	Direct	Unsubsidized	Loan	funds.	The	student	receives	a	first	disbursement	of	$2,250	in
Direct	Subsidized	Loan	funds	and	$1,000	in	Direct	Unsubsidized	Loan	funds	at	the	beginning	of	the	fall	semester
of	a	fall-spring	SAY.
Based	on	the	coursework	completed	during	the	fall	semester,	the	student	progresses	to	third-year	academic
status	at	the	beginning	of	the	spring	semester.	The	student	now	qualifies	for	the	$7,500	combined	subsidized	and
unsubsidized	annual	limit	(maximum	$5,500	subsidized)	that	applies	to	third-year	and	beyond	dependent
undergraduates.	If	otherwise	eligible,	for	the	spring	term	the	student	could	receive	up	to	the	difference	between
the	amount	already	received	in	the	fall	and	the	new	annual	limit	in	the	spring	term.	If	the	student	again	qualifies
for	the	maximum	subsidized	loan	amount,	eligibility	for	the	spring	term	is	as	follows:
$5,500	-	$2,250	subsidized	received	in	the	fall	=	$3,250	subsidized	eligibility	for	spring;	and
$2,000	-	$1,000	unsubsidized	received	in	the	fall	=	$1,000	additional	unsubsidized	eligibility	for	spring.
However,	only	the	COA	and	OFA	associated	with	the	spring	term	can	be	used	in	determining	the	student9s
eligibility	for	the	additional	loan	amount	in	that	term.	The	COA	and	OFA	for	the	fall	term	cannot	be	considered.
The	school	may	either	originate	a	new	spring-only	subsidized	loan	for	the	additional	subsidized	loan	eligibility	in
the	spring	term	(note	that	the	grade	level	progression	does	not	increase	the	student9s	additional	unsubsidized
eligibility)	or	may	increase	the	amount	of	the	original	fall-spring	subsidized	loan	and	make	the	appropriate
adjustment	to	the	second	disbursement	of	that	loan.