installments,	with	the	second	disbursement	made	at	the	calendar	midpoint	of	the	abbreviated	loan	period	regardless
of	how	many	clock	or	credit	hours	or	weeks	of	instructional	time	have	been	completed.	The	normal	payment	period
disbursement	rules	do	not	apply	in	this	situation.
The	next	loan	period	and	a	new	BBAY	3	at	the	new	school	begins	the	day	after	the	last	day	of	the	abbreviated	loan
period.
Once	the	new	loan	period	and	BBAY	3	begin,	all	normal	rules	for	the	timing	of	disbursements	and	annual	loan	limit
progression	apply.
Examples	2	and	3	illustrate	the	principles	described	above.	Although	this	is	not	shown	in	the	abbreviated	loan	period
examples,	in	some	cases	a	student	who	transfers	into	a	program	after	having	received	a	loan	at	another	school	for	an
overlapping	academic	year	may	be	eligible	to	receive	a	higher	total	loan	amount	for	the	program	at	the	new	school	than	a
non-transfer	student	would	be	eligible	to	receive	for	that	same	program.	In	other	cases,	a	transfer	student	may	be	eligible
to	receive	a	lower	total	loan	amount	for	the	same	program	than	a	non-transfer	student.	The	total	loan	amount	that	a
transfer	student	may	receive	depends	on	factors	such	as	the	length	of	the	program	at	the	second	school,	the	program9s
COA,	and	the	loan	amount	the	transfer	student	received	at	the	prior	school	for	the	overlapping	academic	year.
Exceptions	to	the	Minimum	Loan	Period	Rules	(Abbrev iated	Loan	Periods)
34	CFR	685.301(a)(10)(ii),	(iii)
Volume	8,	Chapter	7,	Example	2:	Transfer	Into	a	Clock-Hour	Program	One	Academic	Year	or	Greater	in	Length
A	dependent	first-year	undergraduate	student	receives	the	first	disbursement	($2,750)	of	a	Direct	Unsubsidized
Loan	at	School	A.	The	loan	period	and	academic	year	dates	are	April	1	to	December	31.	For	purposes	of	this
example,	assume	that	the	student	has	no	financial	need	for	a	Direct	Subsidized	Loan	and	receives	only	Direct
Unsubsidized	Loans.	The	student	transfers	from	School	A	to	an	1,800	clock-hour	program	at	School	B	and	begins
attendance	on	June	25.	The	student	is	still	classified	as	a	dependent	first-year	undergraduate.	The	program	at
School	B	has	an	academic	year	of	26	weeks	of	instructional	time	and	900	clock	hours.
The	student9s	first	loan	period	at	School	B	will	be	an	abbreviated	loan	period	from	June	25	(the	beginning	date	of
attendance	at	School	B)	through	December	31	(the	date	the	academic	year	would	have	ended	at	School	A).	For
the	initial	abbreviated	loan	period,	School	B	may	originate	a	loan	for	up	to	the	difference	between	the	student9s
annual	loan	limit	($5,500)	and	the	loan	already	received	at	School	A	for	the	overlapping	loan	period	($2,750).	The
loan	amount	available	to	the	student	during	the	abbreviated	loan	period	is	$2,750.
On	January	1,	the	day	after	the	last	day	of	the	abbreviated	loan	period,	a	new	BBAY	3	begins,	and	the	student
becomes	eligible	for	a	new	annual	loan	limit.	The	loan	period	for	the	new	loan	the	student	receives	following	the
completion	of	the	abbreviated	loan	period	will	correspond	to	the	lesser	of	the	academic	year	or	the	remainder	of
the	program	at	School	B.	If	there	is	less	than	a	full	academic	year	of	the	program	remaining	after	the	abbreviated
loan	period	has	ended,	the	loan	limit	for	the	new	loan	must	be	prorated.
Volume	8,	Chapter	7,	Example	3:	Transfer	Into	a	Clock-Hour	Program	Shorter	Than	an	Academic	Year
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