Prorating	Loan	Limits	for	Remaining	Periods	Shorter	Than	an	Academic	Year
You	must	also	prorate	loan	limits	for	students	enrolled	in	remaining	periods	of	study	shorter	than	an	academic	year.	This
circumstance	can	occur	when	a	student	is	enrolled	in	a	program	that	is	one	academic	year	or	more	in	length,	but	the
remaining	period	of	study	needed	to	complete	the	program	(sometimes	called	a	<final=	period	of	study)	will	be	shorter
than	an	academic	year.
Proration	is	required	only	when	you	know	in	advance	that	a	student	will	be	enrolled	for	a	remaining	period	of	study	that	is
shorter	than	an	academic	year.	With	one	exception,	if	a	student	originally	enrolls	for	a	remaining	period	of	study	that	is	a
full	academic	year	in	length,	but	completes	the	program	in	less	than	a	full	academic	year,	there	is	no	requirement	to
retroactively	prorate	the	annual	loan	limit	(for	the	exception,	see	<Proration	of	the	Annual	Loan	Limit	for	Students	Who
To	determine	the	maximum	portion	of	the	$2,420	prorated	annual	loan	limit	that	the	student	may	receive	in
subsidized	loan	funds,	multiply	the	maximum	subsidized	annual	loan	limit	of	$3,500	by	the	smaller	decimal
(0.44):
$3,500	x	0.44	=	$1,540	subsidized	prorated	annual	loan	limit
The	maximum	combined	Direct	Subsidized	Loan	and	Direct	Unsubsidized	Loan	amount	the	student	can	borrow	for
the	program	is	$2,420,	but	no	more	than	$1,540	of	this	amount	may	be	in	subsidized	loans.
Note:	In	Example	1	above	and	in	the	other	proration	examples	that	follow,	the	fractions	are	converted	to
decimals.	As	an	alternative	you	could	choose	to	multiply	the	annual	loan	limit	by	the	original	fraction,	though	you
should	be	consistent	in	using	one	method	or	the	other.	Using	the	fraction	400/900	in	Example	1	instead	of	the
decimal	0.44	would	result	in	a	slightly	higher	prorated	loan	limit:	$5,500	x	400/900	=	$2,444.
Volume	8,	Chapter	5,	Example	2:	Non-Term	Credit-Hour	Program	Shorter	Than	an	Academic	Year
An	independent	student	is	enrolled	in	a	24	quarter-hour,	20-week	program.	The	school	defines	the	academic	year
for	this	program	as	36	quarter	hours	and	30	weeks	of	instructional	time.
To	determine	the	maximum	loan	amount	the	student	can	borrow,	convert	the	fractions	based	on	weeks	and
quarter-hours	to	decimals:
20	weeks	in	program/30	weeks	in	academic	year=	0.67
24	hours	in	program/36	hours	in	academic	year=	0.67
Multiply	the	smaller	decimal	(in	this	case,	both	are	0.67)	by	the	combined	Direct	Subsidized	Loan	and	Direct
Unsubsidized	Loan	annual	loan	limit	for	a	first-year	independent	undergraduate	($9,500,	not	more	than	$3,500	of
which	may	be	subsidized):
$9,500	x	0.67	=	$6,365	combined	subsidized	and	unsubsidized	prorated	annual	loan	limit
To	determine	the	maximum	portion	of	the	$6,365	prorated	annual	loan	limit	the	student	may	receive	in
subsidized	loan	funds,	multiply	the	maximum	subsidized	annual	loan	limit	of	$3,500	by	the	same	decimal	(0.67):
$3,500	x	0.67	=	$2,345	subsidized	prorated	annual	loan	limit
The	maximum	combined	Direct	Subsidized	Loan	and	Direct	Unsubsidized	Loan	amount	the	student	can	borrow	for
the	program	is	$6,365,	not	more	than	$2,345	of	which	may	be	in	subsidized	loans.
Note:	Using	the	fraction	24/36	in	Example	2	instead	of	the	decimal	0.67	would	result	in	a	slightly	lower	prorated
loan	limit:	$9,500	x	24/36	=	$6,333.