A student may apply for a Federal Direct Stafford Loan for preparatory coursework that the college has documented as necessary for him/her to enroll in an eligible program. Courses must be part of an eligible program otherwise offered by the college. If enrolled at least half-time in these prerequisite courses, a student may be eligible for loans for one consecutive 12-month period beginning on the first day of the loan period.
Preparatory coursework prepares a student to be eligible for admission as a regular student into an educational program. In other words, a preparatory course is any prerequisite that must be completed for a specific academic program before being admitted into that academic program at the postsecondary level. For example, this could include being required to complete certain foreign language or other prerequisite courses before being admitted into a postsecondary program. A student must not yet be admitted when he or she takes those preparatory courses for the purposes of Title IV aid. After the student has been admitted as a regular student by the school, the student cannot receive Title IV aid pay for any preparatory coursework; at that point, Title IV aid can only be paid for courses which count toward degree completion requirements. After admission, prerequisite courses that do not count toward degree completion and are not remedial courses cannot be paid with Title IV aid.
An undergraduate student may borrow up to $8,625 (for the one consecutive 12-month period) in Federal Direct Stafford Loans if they are taking prerequisites coursework. A student in an undergraduate program cannot receive the graduate loan limits based on taking graduate coursework as a part of the undergraduate program. A student enrolled in preparatory coursework has a subsidized/unsubsidized annual loan limit of $2,625 if the student is taking coursework in preparation for enrollment. Breakdown of the loan limits for undergraduate degree preparatory coursework is as follows:
- Direct Subsidized or Unsubsidized = $2,625**
- Additional Direct Unsubsidized (for independent students and dependent undergraduates whose parents are unable to receive a PLUS loan) = $6,000**
** Loan limit is not prorated if the coursework lasts less than an academic year. See Volume 1, Chapter 6, 2018–2019 FSA Handbook for more information on FSA eligibility for this coursework.
To be eligible for loans under this exception, a student must be taking prerequisite classes for full admission into a graduate program. If a student is only taking them to raise his/her GPA in order to be admitted, he/she would not qualify. The ability to borrow funds requires that a student has not reached undergraduate loan limits for subsidized and unsubsidized Stafford Loans.
Eligibility for a federal student loan may be granted to a student for up to one calendar year (one consecutive 12-month period) if he/she is enrolled in coursework required to meet prerequisites for admission into a degree program.
Reference: 2018–2019 FSA Handbook Vol. 1, Ch. 1, p. 6, plus Code of Federal Regulations Title 34 CFR 668.20, Code of Federal Regulations Title 34 CFR 668.8(j), and Code of Federal Regulations Title 34 CFR 668.32
ESL courses taken when a student is enrolled in an ESL Program are not eligible for financial aid. ESL courses are nonacademic courses, which are not counted toward the completion of a student’s degree. ESL courses are used in preparing a student for being able to pursue their courses to obtain their degree; these noncredit courses do not go toward the student’s federal financial aid. Federal aid is provided for courses that are required for the degree the student is pursuing.
ESL courses do not count against the one-year limitation on remedial coursework, and they need not be at the secondary school level.
If taken as part of an approved academic program and have credit equivalencies, student’s taking ESL courses are eligible for financial aid purposes and aid will be awarded to cover tuition costs for these courses. In order to be aid eligible, an ESL program must meet the general requirements for eligible programs (e.g., it must lead to a degree or other credential), and a school must request an eligibility determination for it from the department. The program may admit only students who need instruction in English to be able to use the knowledge, training, or skills they already have. The school must document its determination that the ESL instruction is necessary for each student enrolled. Awarding Pell Grants over a series of semesters for such work can exhaust eligibility for Pell Grants before the student completes their program. In other words, students enrolled in a program that consists solely of English as a second language (ESL) instruction are only eligible for Pell Grants.
Students admitted as conditional are regular students only if the school officially accepts them into the eligible degree or certificate program. The Federal Department of Education does not define official acceptance or admission. If the student is merely allowed to take some courses before being officially admitted to the program, s/he is not considered a regular student and is not eligible for FSA funds until s/he is officially admitted.
If part of a student’s academic program, a student can receive aid for a limited amount of remedial coursework that is included as part of a regular program. As long as the student qualifies for aid for remedial courses, you must include the remedial courses in the student’s enrollment status. Some schools give no credit or reduced credit for remedial classes. To determine enrollment status, credit hours for the remedial class should be the same as for the comparable full-credit class.
More information about ESL course grading can be found in Academic Policies. Students can also review the English Language Institute (ELI) coursework and program information online.