Financial Aid: Accept Full Subsidized Loan, before Accepting Unsubsidized Loan

Owned by Emily Bivona (Deactivated)
Last updated: Jan 31, 2020 by Heather Smith

Overview

If a student has been offered both Subsidized and Unsubsidized Loans in a given AY, the Department of Education requires that the student must first accept the full amount of the Subsidized Loan before accepting any portion of the Unsubsidized Loan.  For Subsidized Loans, the student won’t be charged interest while enrolled in school and during a grace period after they finish school (about six months). For Unsubsidized Loans, interest starts accruing (accumulating) from the date of your first loan disbursement, so it's advantageous for the student to take the full Subsidized Loan amount first.  

The Student Experience portal was designed to ensure that the student must always accept the full amount of Subsidized Loan being offered, prior to accepting any Unsubsidized Loan.


Functional Details

If both Subsidized and Unsubsidized Loans are offered to the Student within an Academic Year, the student must accept the full eligible amount of the Subsidized Loan first, before proceeding with accepting any portion of the Unsubsidized Loan for the displayed Academic Year.

  • If there is Offered Subsidized Loan and Offered Unsubsidized Loan in the same Academic Year, then only the "Declined" option is available for the Unsubsidized Loan and the following message is shown: You must accept your full Subsidized Loan eligibility prior to accepting an Unsubsidized Loan.

Generally, the student’s remaining eligibility for the Subsidized Loan should be calculated as:

  • The lessor of either the offered or eligible amount of the award or
  • If the award is manual, and the override eligibility flag is true, it is the offered amount of the award.

If the remaining unaccepted eligibility for the total of the Subsidized Loans in the Academic Year is greater than zero, then the Unsubsidized Loans in the Academic Year cannot be accepted. The only action available for these Unsubsidized Loans will be “Decline.” The student can Decline the Unsubsidized Loan and select “Save changes.”

Once the Subsidized Loan for the Academic Year is fully accepted (Remaining Eligibility = 0), all actions for the Unsubsidized Loan for the Academic Year display.

Once the student has accepted any portion of any of the Unsubsidized Loans for the displayed AY, they cannot reduce any Subsidized loans for the displayed AY, unless the Unsubsidized Loans are first reduced to zero.

The student may always Decline the full amount of the Unsubsidized loan prior to accepting any of the Subsidized loan.

Multiple Loans

If there are multiple Subsidized Loans and/or multiple Unsubsidized Loans offered to the student, the system will ensure that only loans within a given Academic Year are considered together.  For example, within the Academic Year, there may be Loans offered on loan periods that do not span all payment periods within the Academic Year. 

  • The student may have multiple Subsidized and or Unsubsidized Loans in the Academic Year due to, for example, a mid-year grade level increase resulting in additional eligibility awarded via single term loans. All Subsidized Loans must be accepted prior to any Unsubsidized Loans.

If the student has 1 Subsidized and 1 Unsubsidized, both fully accepted; and later another Subsidized and Unsubsidized are added to the AY, the newly added Unsubsidized loan can only be “Declined.” The student must fully accept the newly added Subsidized loan before they can accept the newly added Unsubsidized loan.

If the student has 1 Subsidized and 1 Unsubsidized loan; Subsidized is fully accepted and Unsubsidized is partially accepted; later an additional Subsidized loan is added to the AY. The Unsubsidized loan must once again have only the "Decline" action available, then the student must fully accept the additional Subsidized loan before they can accept any more of the existing Unsubsidized loan. In other words, the additional Subsidized loan would have to be fully accepted before all the actions would become available, again, for the Unsubsidized.


Note:  Overlapping Academic Year scenarios are not being addressed with this functionality.