Direct	Loan	Eligibility	After	Inadvertent	Overborrowing
A	student	who	has	inadvertently	received	Direct	Loan	funds	in	excess	of	the	annual	or	aggregate	loan	limits	is	ineligible	to
receive	any	Title	IV	funds	until	the	overborrowing	is	resolved.	As	explained	in	more	detail	below,	the	student	can	regain
eligibility	for	aid	by	repaying	the	amount	that	exceeded	the	annual	or	aggregate	loan	limits,	or	by	making	satisfactory
arrangements	with	the	loan	servicer	to	repay	the	excess	amount.
The	school	where	the	student	is	requesting	additional	Title	IV	funds	is	responsible	for	identifying	the	loan(s)	that	resulted
in	the	overborrowing,	determining	that	the	overborrowing	was	inadvertent,	discussing	the	overborrowing	with	the
student,	and	resolving	any	discrepancies	in	the	information	that	is	obtained.	If	the	loan(s)	that	caused	the	student	to
exceed	the	annual	or	aggregate	loan	limit	were	received	for	attendance	at	a	different	school,	in	some	cases	it	may	be
necessary	for	the	school	the	student	is	currently	attending	to	contact	the	other	school	for	additional	information	in	order
to	determine	that	the	excess	borrowing	was	inadvertent.
Examples	of	circumstances	that	may	have	resulted	in	a	student	inadvertently	exceeding	an	annual	or	aggregate	loan	limit
include,	but	are	not	limited	to:
School	processing	errors;
Missing	or	incorrect	NSLDS	information;	or
Unintentional	student	error	or	omission.
Overborrowing	is	not	considered	inadvertent	if	there	is	any	evidence	that	it	was	the	result	of	deliberate	action	on	the	part
of	the	school	that	determined	the	borrower9s	eligibility	for	the	loan,	or	on	the	part	of	the	borrower	who	received	the	loan.
If	a	school	determines	that	the	overborrowing	was	the	result	of	deliberate	action	on	the	part	of	another	school	or	the
borrower,	it	must	notify	the	Department9s	Office	of	the	Inspector	General	and	provide	evidence	(see	the	contact	number
at	the	end	of	this	section).
Once	the	school	where	the	student	is	requesting	
Title	IV	funds	has	documented	that	the	student	has	either	repaid	the
excess	loan	amount	or	has	made	satisfactory	arrangements	to	repay	the	excess	amount,	it	may	award	additional	aid.	For
Direct	Loans,	the	student9s	eligibility	is	retroactive	to	the	beginning	of	the	academic	year	in	which	the	overborrowing	was
resolved.
A	student	who	regains	eligibility	after	inadvertent	overborrowing	may	or	may	not	be	eligible	to	receive	additional	loan
funds,	depending	on	the	circumstances.	For	example,	a	dependent	undergraduate	who	inadvertently	exceeded	the
$23,000	aggregate	limit	for	subsidized	loans	could	not	receive	any	additional	Direct	Subsidized	Loan	funds	as	a
dependent	undergraduate	unless	the	outstanding	debt	was	paid	down	below	the	$23,000	limit	(see	Chapter	4	of	this
volume	for	information	on	aggregate	loan	limits).	However,	the	student	could	potentially	receive	additional	Direct
Unsubsidized	Loan	funds,	up	to	the	$31,000	aggregate	loan	limit,	or	non-loan	aid.	An	independent	undergraduate	who
inadvertently	exceeded	the	$23,000	subsidized	limit	(but	who	has	not	reached	the	$57,500	combined	aggregate	loan	limit
for	independent	undergraduates)	could	borrow	additional	Direct	Unsubsidized	Loan	funds	once	they	make	satisfactory
arrangements	to	repay	the	subsidized	amount	that	exceeds	$23,000.	For	more	on	overborrowing	and	overawards,	see
Volume	4.
A	student	who	regains	Title	IV	eligibility	after	having	inadvertently	exceeded	an	annual	loan	limit	for	an	academic	year	is
not	eligible	to	receive	additional	Direct	Loan	funds	for	that	same	academic	year,	but	could	receive	other	types	of	Title	IV
aid.	However,	if	the	student	exceeded	only	the	annual	subsidized	limit	and	has	regained	eligibility,	the	student	would	be
eligible	to	receive	Direct	Unsubsidized	Loans	up	to	the	applicable	annual	maximum.
Note:	A	student	who	inadvertently	exceeded	an	undergraduate	annual	or	aggregate	loan	limit	does	not
automatically	become	eligible	to	receive	additional	Direct	Loans	if	they	become	eligible	for	an	increased	annual
loan	limit	as	a	result	of	progressing	to	a	higher	grade	level,	or	if	they	become	eligible	for	a	higher	aggregate	loan
limit	due	to	their	dependency	status	changing	from	dependent	to	independent	or	by	their	enrollment	in	a
graduate	or	professional	degree	program.	In	either	case,	the	inadvertent	overborrowing	must	still	be	resolved
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