additional	Direct	Unsubsidized	Loan	funds	to	the	student.	However,	the	Direct	PLUS	Loan	funds	that	the	parent	previously
received	during	the	same	period	of	enrollment	must	be	treated	as	OFA	when	determining	the	additional	Direct
Unsubsidized	Loan	amount	that	the	student	is	eligible	to	receive.
A	Parent	Is	Unable	To	Borrow	a	Direct	PLUS	Loan	For	Reasons	Other	Than	Adverse	Credit	History	(Exceptional
Circumstances)
In	addition	to	cases	in	which	a	parent	has	been	denied	a	Direct	PLUS	Loan	due	to	adverse	credit,	a	dependent
undergraduate	student	may	also	be	eligible	for	increased	unsubsidized	loan	amounts	if	you	determine	and	document	the
existence	of	exceptional	circumstances	other	than	adverse	credit	that	would	prevent	a	parent	from	borrowing	a	Direct
PLUS	Loan.
If	you	make	such	a	determination,	you	may	award	increased	Direct	Unsubsidized	Loan	amounts	to	a	dependent
undergraduate	even	if	the	student9s	parent	previously	applied	for	a	Direct	PLUS	Loan	and	was	found	to	not	have	an
adverse	credit	history.	Similarly,	if	you	make	such	a	determination	before	a	parent	has	requested	a	Direct	PLUS	Loan,	you
may	award	the	increased	Direct	Unsubsidized	Loan	funds	to	the	dependent	student	without	requiring	the	parent	to	apply
for	a	Direct	PLUS	Loan.
Examples	of	such	exceptional	circumstances	include,	but	are	not	limited,	to	the	following:
The	parent	is	incarcerated.
The	parent9s	whereabouts	are	unknown.
The	parent	has	filed	for	bankruptcy	and	has	provided	a	letter	from	the	bankruptcy	court	stating	that	as	a	condition	of
the	bankruptcy	filing,	the	parent	may	not	incur	any	additional	debt.
The	parent9s	income	is	limited	to	public	assistance	or	disability	benefits,	and	you	have	documented	that	the	parent
would	not	be	able	to	repay	the	Direct	PLUS	Loan.
You	have	examined	the	family	financial	information	and	documented	the	parent9s	likely	inability	to	repay	the	Direct
PLUS	Loan	due	to	an	existing	debt	burden	or	the	parent9s	expected	income-to-debt	ratio.
The	parent	of	a	dependent	student	is	not	a	U.S.	citizen	or	permanent	resident,	is	not	a	qualified	alien,	or	is	not	able
to	provide	evidence	from	the	Department	of	Homeland	Security	(DHS)	that	they	are	in	the	United	States	for	other
than	a	temporary	purpose	with	the	intention	of	becoming	a	citizen	or	permanent	resident.
Before	originating	a	loan	for	the	increased	Direct	Unsubsidized	Loan	amounts	based	on	a	parent9s	ineligibility	for	a	Direct
PLUS	Loan	due	to	adverse	credit	or	other	exceptional	circumstances,	you	must	document	the	basis	of	the	dependent
student9s	eligibility.
A	determination	that	a	parent	is	ineligible	for	a	Direct	PLUS	Loan	in	one	academic	year	based	on	adverse	credit	or	other
exceptional	circumstances	does	not	automatically	support	the	dependent	student9s	additional	unsubsidized	loan	eligibility
in	subsequent	years.	If	a	dependent	student	is	determined	to	be	eligible	for	additional	unsubsidized	loan	amounts	in	one
academic	year,	you	must	re-examine	and	document	that	the	basis	for	the	student9s	eligibility	continues	to	exist	before
originating	additional	unsubsidized	loan	amounts	for	the	student	in	a	subsequent	year.
Annual	Loan	Limit	for	Graduate	and	Professional	Students
The	annual	loan	limit	for	graduate	or	professional	students	is	shown	below	in	Table	1C.	Graduate	and	professional
students	are	not	eligible	to	receive	Direct	Subsidized	Loans,	so	the	annual	loan	limit	for	these	students	represents	only
Direct	Unsubsidized	Loans.
A	student	in	an	undergraduate	program	is	not	eligible	for	the	graduate	loan	limit	based	on	taking	graduate	coursework	as
a	part	of	the	undergraduate	program.	In	contrast,	a	graduate	student	taking	some	undergraduate	coursework	is	eligible
for	the	graduate	loan	limit	if	the	student	is	enrolled	at	least	half	time	in	courses	(graduate	or	undergraduate)	that	can	be
applied	to	the	graduate	program.	However,	the	student	must	already	be	admitted	into	the	graduate	program.
A	student	with	a	bachelor9s	degree	who	is	taking	preparatory	work	for	graduate	school	(or	whose	full	admission	to	the
graduate	program	is	contingent	upon	completion	of	certain	undergraduate	courses)	is	not	eligible	for	graduate	loan	limits.
See	the	discussion	later	in	this	chapter	on	annual	loan	limits	for	students	taking	preparatory	coursework.
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