Maximum Loan Eligibility

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• I. PURPOSE
• II. REFERENCES
• III. DEFINITIONS
• IV. POLICY
• V. PROCEDURES
• Policy Maintenance Information

I. PURPOSE

This policy identifies calculation procedures for student’s maximum loan eligibility.

Scope: This policy applies to all Western Governors University (WGU) students

II. REFERENCES

1. Cost of Attendance
2. Financial Aid Overview
3. Financial Aid: Your Rights and Responsibilities
4. State Financial Aid Information
5. US Department of Education - How the amount of your federal student aid is determined

III. DEFINITIONS

1. Direct Subsidized Loan: Loans that the U.S. Department of Education gives to eligible undergraduate students who demonstrate financial need. The interest is paid by the U.S. Department of Education while the student is enrolled in school at least half time or during deferment periods.
   
   
2. Direct Unsubsidized Loan: Loans given to eligible undergraduate, graduate, and professional students which are not based on financial need. Therefore, they are available to most WGU students. Students are responsible for the interest from the day the student borrows the money until they pay off the loan.
   
   
3. Direct PLUS Loans: Loans given to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses. The borrower (student or parent, in case of Parents PLUS loan) is responsible for interest during all periods.
   
   
4. Need-Based Aid: Financial aid that student can receive if they have financial need and meet other eligibility criteria. The need-based federal student aid programs are Federal Pell Grant, Federal Supplemental Educational Opportunity Grant (FSEOG), Direct Subsidized Loan, and Federal Work Study.
   
   
5. Cost of Attendance (COA): An estimated cost of a student’s educational expenses for the academic year. The total student aid funds may not exceed the student's COA. The COA components for all federal student aid (FSA) programs are:
   
   
   • Tuition and Fees (including the electronic versions of the required textbooks and other learning resources)
   • Supplies (including printer paper and cartridges)
   • Room and Board
   • Other Educational Costs
     
     
6. Expected Family Contribution (EFC): Expected Family Contribution (EFC) is calculated by using the information the student provides on the Free Application for Federal Student Aid (FAFSA). This number is used to calculate how much financial aid the student is eligible to receive. It is neither the amount of money the student will have to pay at the University, nor the total amount of federal student aid the student will receive.
   
   
7. Estimated Financial Assistance (EFA): Estimated Financial Assistance (EFA) refers to aid from the federal student aid (FSA) programs, as well as grants, scholarships, loans, and need-based employment awarded by the University or by an individual or organization outside the University as a result of postsecondary enrollment.
   
   
8. Non-Need Based Aid: Financial aid not based on a student’s EFC, but instead based on the student’s
   COA. Direct Unsubsidized Loan, Federal PLUS Loan, and TEACH Grant are non-need-based federal
   student aid programs.

IV. POLICY

1. Students’ maximum loan eligibility is calculated based on a number of factors including the federal direct annual and aggregate loan limits (in the table below, IV.2), enrollment status, Cost of Attendance (COA), Expected Family Contribution (EFC), and other Estimated Financial Assistance (EFA).
   
   
2. Loan Limits as established by the US Department of Education in the Federal Student Aid Handbook 
   

   Direct Subsidized and Unsubsidized Annual Loan Limits

   Year	Dependent Undergraduate Student	Independent Undergraduate Student (and dependent students whose parents are unable to obtain PLUS Loans)
   First Year [completed 23 Competency Units (CUs) or less]	$5,500 – No more than $3,500 of this amount can be subsidized loan	$9,500 – No more than $3,500 of this amount can be subsidized loan
   Second Year [completed 24-47 CUs]	$6,500 – No more than $4,500 of this amount can be subsidized loan	$10,500 – No more than $4,500 of this amount can be subsidized loan
   Third Year and Beyond [completed 48 CUs or greater]	$7,500 – No more than $5,500 of this amount can be subsidized loan	$12,500 – No more than $5,500 of this amount can be subsidized loan
   Graduate or Professional Student [all years]	Not applicable (all graduate and professional students are considered independent)	$20,500 (Unsubsidized loan only)

   
   

   Direct Subsidized and Unsubsidized Aggregate Loan Limits

   Student Type	Subsidized	Total Subsidized & Unsubsidized
   Dependent Undergraduate students (excluding those whose parents cannot borrow Direct PLUS)	$23,000	$31,000
   Independent Undergraduate students and Dependent Undergraduate students whose parents cannot borrow Direct PLUS	$23,000	$57,500
   Graduate and Professional Students*	$65,500	$138,500

   
   *Note: Aggregate loan limits for graduate and professional students include loans received for undergraduate study. The $65,500 subsidized aggregate loan limit shown here for graduate and professional students includes subsidized loans received for loan periods beginning before July 1, 2012, and prior subsidized loans received for undergraduate study.
   
   
3. A dependent student whose parent cannot obtain a parent PLUS loan is allowed to borrow additional Unsubsidized Direct Loan amounts. The information regarding parents’ PLUS loan eligibility and additional Unsubsidized Direct Loan amounts student may be eligible for, is automated. WGU reports the information to the student as a part of their financial aid offer. Student dependency status will be determined based on answers to questions on the FAFSA.
   
   
4. Except for Pell Grants, federal student aid award amounts are constrained by the other aid or Estimated Financial Assistance (EFA).

V. PROCEDURES

1. Determining Financial Need: To calculate student financial need, the Expected Family Contribution is subtracted from the Cost of Attendance (Cost of Attendance (COA) - Expected Family Contribution (EFC)= Financial Need). Please visit Cost of Attendance for the current estimated COA and additional information.
   
   
2. Determining Non-Need Based Aid: To calculate the Non-Need Based Aid, the Financial Aid Awarded is subtracted from the Cost of Attendance (Cost of Attendance (COA) - Financial Aid Awarded (or EFA) = Eligibility for Non-need-based Aid).
   
   
3. Students may visit https://studentaid.gov/complete-aid-process/how-calculated to learn how the amount of federal student aid is determined.
   
   
4. Students may access their financial aid offer in their student portal

Policy Maintenance Information

• Policy: Maximum Loan Eligibility
• Responsible Department: Financial Aid
• Effective Date: 9/6/2016
• Approved Date: 9/6/2016
• Viewability: Student Facing

Policy Action	Date	Authorization
Reviewed	4/15/2022	Annie Reyes
Non-Substantive Revision	7/17/2023	Patti Kohler