COA	(see	Volume	3,	Chapter	3);
For	parents	receiving	a	Direct	PLUS	Loan,	ensure	that	the	student	has	completed	a	FAFSA	form	(review	the	student9s
ISIR	or	FAFSA	Submission	Summary);	and
Ensure	that	the	loan	disbursement	dates	meet	cash	management	and	disbursement	requirements.
For	a	Direct	Subsidized/Unsubsidized	Loan,	you	must	also:
Determine	the	student9s	Pell	Grant	eligibility	and,	if	they	are	eligible,	include	the	grant	in	the	student9s	aid	package;
For	a	Direct	Unsubsidized	Loan	made	to	an	undergraduate	student,	first	determine	the	student9s	eligibility	for	a
Direct	Subsidized	Loan	and,	if	the	student	is	eligible,	include	the	Direct	Subsidized	Loan	in	the	student9s	aid	package;
Ensure	that	the	amount	of	the	loan	will	not	exceed	the	student9s	annual	or	aggregate	loan	limits;	and
Prorate	the	annual	loan	limit	for	an	undergraduate	enrolled	in	a	program	or	remaining	period	of	study	that	is	shorter
than	an	academic	year	(as	described	in	Chapter	5	of	this	volume).
No	Alternate	SAI	When	Originating	Loans	for	Periods	Other	Than	Nine	Months
If	you	originate	a	Direct	Loan	for	a	period	shorter	than	a	full	academic	year	(for	example,	a	loan	for	a	single	term	or	for	a
program	shorter	than	an	academic	year),	the	loan	amount	must	be	based	on	the	reduced	costs	for	that	shorter	period	of
enrollment	rather	than	the	costs	for	the	full	academic	year.	However,	as	explained	in	Volume	3,	Chapter	3,	there	are	no
alternate	SAIs	for	periods	of	enrollment	other	than	nine	months	comparable	to	the	alternate	EFCs	for	periods	other	than
nine	months	that	were	used	prior	to	the	2024-2025	award	year.	In	all	cases	you	must	use	the	student9s	full	calculated	9-
month	SAI	in	the	formula	to	determine	financial	need	for	Direct	Subsidized	Loans	and	other	need-based	aid	even	though
the	COA	will	reflect	the	reduced	costs	for	the	shorter	loan	period.	This	means	that	students	enrolled	for	periods	shorter
than	nine	months	will	have	less	financial	need	than	would	have	been	the	case	in	the	past	when	using	a	smaller	alternate
EFC,	because	now	the	full	calculated	SAI	must	be	subtracted	from	the	reduced	COA	for	the	shorter	period	of	enrollment
when	determining	financial	need	for	purposes	of	Direct	Subsidized	Loan	eligibility.
Volume	8,	Chapter	3,	Example	1:	Effect	of	No	Alternate	SAI	on	Financial	Need	When	Originating	Loans	for	Periods
Less	Than	Nine	Months
A	first-year	dependent	student	has	a	COA	of	$10,800	for	an	academic	year	consisting	of	the	fall	and	spring
semesters	and	an	SAI	of	8,000,	so	the	student9s	financial	need	for	the	fall-spring	enrollment	period	is	$2,800	(see
Volume	3,	Chapter	3	for	guidance	on	determining	financial	need).	The	student	is	not	eligible	for	a	Pell	Grant	and
receives	no	Title	IV	aid	except	for	Direct	Loans.	The	student	qualifies	for	a	$2,800	Direct	Subsidized	Loan	to	fully
cover	their	financial	need.	(The	student	could	also	receive	a	Direct	Unsubsidized	Loan,	but	for	purposes	of	this
example	we	cover	only	Direct	Subsidized	Loan	eligibility.)
The	student	will	also	be	enrolled	for	the	summer	term,	which	the	school	treats	as	a	<trailer=	to	the	preceding	fall-
spring	Scheduled	Academic	Year	(SAY)	for	purposes	of	monitoring	annual	loan	limits	(see	Chapter	6	of	this
Volume).	The	summer	term	is	four	months	in	length	and	the	COA	for	that	term	is	$4,000.	For	students	who	attend
the	summer	term	and	request	Direct	Loan	funds,	the	school9s	normal	practice	is	to	originate	a	separate	loan	for
the	summer	term	only.	Because	there	is	no	alternate	SAI	for	periods	of	enrollment	less	than	nine	months	and	the
student9s	SAI	of	8,000	is	greater	than	the	summer	term	COA,	the	student	has	no	financial	need	for	summer	and	is
therefore	ineligible	to	receive	a	Direct	Subsidized	Loan	for	that	term	(but	could	receive	a	Direct	Unsubsidized
Loan).
As	an	alternative	to	originating	a	separate	summer-only	loan,	the	school	could	choose	to	originate	a	single	loan
for	a	loan	period	covering	the	fall-spring	SAY	plus	the	summer	trailer	term.	The	student9s	COA	for	that	period	of
enrollment	is	$14,800.	Subtracting	the	student9s	SAI	of	8,000	from	the	COA	results	in	financial	need	of	$6,800.
The	student	would	therefore	be	eligible	to	receive	a	$3,500	Direct	Subsidized	Loan	(the	maximum	subsidized
annual	loan	limit	for	a	dependent	first-year	student)	for	the	fall-spring-summer	loan	period.
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