may	not	notify	the	school	or	the	loan	servicer	right	away,	particularly	if	the	parent	borrower	had	requested	a	deferment	of
payments	while	the	student	was	enrolled	at	least	half	time.
If	a	school	is	required	to	return	Direct	PLUS	Loan	funds	that	were	disbursed	after	the	date	of	the	parent	borrower9s	death,
the	school	should	determine	whether	there	is	a	surviving	parent	who	can	take	out	a	Direct	PLUS	Loan	for	the	amount	of
the	original	Direct	PLUS	loan	that	must	be	returned.	If	this	is	not	an	option,	the	school	may	award	additional	Direct
Unsubsidized	Loan	funds	(up	to	the	amounts	normally	available	only	to	independent	undergraduates)	to	the	dependent
student	(see	<Annual	Loan	Limits	for	Independent	Undergraduates	and	Certain	Dependent	Undergraduates=	in	Chapter	4
of	this	volume).	In	this	specific	circumstance,	a	school	may	originate	a	Direct	PLUS	Loan	for	a	surviving	parent	or	originate
a	Direct	Unsubsidized	Loan	for	the	dependent	student	even	if	the	loan	period	has	ended.
For	additional	guidance	on	other	actions	that	a	school	must	take	when	a	Title	IV	aid	recipient	dies,	see	Appendix	B	of	the
FSA	Handbook.
Exceptions	to	the	Normal	Loan	Period	and	Disbursement	Requirements	When	Clinical	Work	is	Included	in	a	Standard	Term
Volume	3,	Chapter	1	of	the	FSA	Handbook	describes	standard	terms	(semesters,	quarters,	and	trimesters)	and
nonstandard	terms,	and	explains	that	standard	terms	or	nonstandard	terms	that	are	substantially	equal	and	at	least	nine
weeks	in	length	(<SE9W=	nonstandard	terms)	may	not	include	periods	of	clinical	work,	such	as	medical	and	education
program	work	which	is	conducted	outside	the	classroom,	unless	certain	requirements	are	met	(see	<Inclusion	of	Clinical
Work	in	a	Standard	Term=).	If	a	standard	term	or	SE9W	nonstandard	term	contains	clinical	work	that	meets	all	the	criteria
to	be	included	in	the	term,	this	may	result	in	certain	exceptions	to	the	normal	loan	period	and	disbursement	rules	as
discussed	earlier	in	this	chapter.	We	discuss	these	exceptions	below.
If	clinical	work	meets	the	criteria	described	in	Volume	3	to	be	included	in	a	standard	term	or	SE9W	nonstandard
term,	the	school	must	associate	the	clinical	work	with	the	term	during	which	the	majority	of	the	clinical	work	occurs.
If	a	student	receives	a	Direct	Loan	for	a	term	that	includes	clinical	work	and	the	clinical	work	begins	before	the
starting	date	of	the	term	with	which	the	clinical	work	is	associated,	the	loan	period	start	date	is	the	beginning	date	of
the	clinical	work	(rather	than	the	starting	date	of	the	term,	as	would	normally	be	the	case).
For	example,	if	a	school	originates	a	Direct	Loan	for	a	Scheduled	Academic	Year	(SAY)	consisting	of	fall	and	spring
semesters	that	run	from	September	1	through	May	31,	and	the	fall	semester	includes	clinical	work	that	begins	on
August	15,	the	school	would	report	the	loan	period	dates	as	August	15	through	May	31.	If	the	clinical	work	does	not
begin	until	on	or	after	the	starting	date	of	the	term	with	which	it	is	associated,	the	loan	period	start	date	would	be
the	beginning	date	of	the	term.
If	the	clinical	work	ends	after	the	ending	date	of	the	term	with	which	it	is	associated,	the	loan	period	end	date	for	a
Direct	Loan	is	the	ending	date	of	the	clinical	work	(instead	of	the	ending	date	of	the	term,	as	would	normally	be	the
case).
For	example,	if	a	school	originates	a	Direct	Loan	for	a	Scheduled	Academic	Year	(SAY)	consisting	of	fall	and	spring
semesters	that	run	from	September	1	through	December	31	(fall)	and	January	1	through	May	31	(spring),	and	the
spring	semester	includes	clinical	work	that	ends	on	June	20,	the	school	would	report	the	loan	period	dates	as
September	1	through	June	20.	However,	if	the	clinical	work	ends	on	or	before	the	ending	date	of	the	term	with	which
it	is	associated,	the	loan	period	end	date	would	be	the	ending	date	of	the	term.
If	loan	period	dates	are	adjusted	as	explained	above	to	account	for	clinical	work	that	begins	before	or	ends	after	the
normal	term	starting	and	ending	dates,	the	academic	year	period	to	which	the	Direct	Loan	annual	loan	limit	applies,
and	the	payment	period	dates	must	also	be	adjusted	accordingly.	Using	the	example	above	where	the	spring	term	of
a	fall-spring	SAY	contains	clinical	work	that	ends	on	June	20,	and	assuming	that	the	annual	loan	limit	applies	to	that
fall-spring	SAY	period,	the	school	would	report	the	academic	year	dates	associated	with	the	loan	as	September	1
through	June	20,	and	would	report	the	dates	of	the	second	payment	period	(the	spring	semester)	as	January	1
through	June	20	(see	Volume	3,	Chapter	1	for	guidance	on	payment	periods,	and	Chapter	6	of	this	volume	for
information	on	SAYs	and	monitoring	annual	loan	limits).
If	there	are	two	consecutive	loan	periods	for	standard	terms	or	SE9W	nonstandard	terms	that	include	clinical	work,
and	the	first	loan	period	has	not	ended	when	the	clinical	work	associated	with	the	next	loan	period	is	scheduled	to
begin	(because	the	clinical	work	associated	with	the	term	has	not	yet	been	completed),	it	is	permissible	for	the	two
loan	periods	(and	the	associated	payment	periods)	to	overlap.
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