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FAQ: What steps should schools take when borrowers have exceeded their annual or aggregate Stafford Loan limits?

September 11, 2012

Nelnet continues to receive questions from schools about borrowers who have exceeded their annual or aggregate loan maximums. To resolve this loan issue, schools or borrowers need to work directly with the servicer of the loan that caused the overage.

Q: Why is it critical to work with servicers when aggregate limits are exceeded?  

A:  Federal regulations state that borrowers cannot receive Title IV aid until lending overages are resolved.  Three options are available for resolution:

  1. The borrower can sign an agreement acknowledging the debt and affirming his or her intention to repay the excess amount as part of the normal repayment process. This is called a Reaffirmation Letter.*
  2. The school can either process an adjustment and return the borrower’s excess loan amount, or reallocate funds between the subsidized Stafford loan and the unsubsidized Stafford loan for which the borrower is eligible.
  3. The borrower can repay in full the excess loan amount.

* Option 1 is the most widely used by schools and borrowers.  The Reaffirmation Letter is required because the repayment obligations included in the Master Promissory Note do not cover loan amounts that exceed annual or aggregate limits.

Q:  Is the reaffirmation process handled the same by all servicers?

A:  There are some differences in practices among servicers. To obtain guidance on the correct procedures, and to obtain the correct version of the forms that pertain to the borrower’s specific circumstances, schools or students should contact the servicer of the loan that caused the overage.

Q:  Can consolidation fix the overage?

A:  If a student is eligible to consolidate his or her loan (prior to returning to in-school status), a consolidation is considered a satisfactory repayment arrangement.  When NSLDS shows that the loan that caused the overage has been included in a consolidation, the overage can be resolved.  IMPORTANT: All loans included in an overage amount must be included in a consolidation to be considered a satisfactory repayment arrangement. If you have questions about whether consolidation has resolved the full overage, please contact the loan servicer for further guidance.

Q:  Where can I obtain contact information for federal loan servicers?

A:  Servicer contact information for schools is here. Servicer contact information for borrowers is at this website.

Q:  Where can I find additional information?

 A:  Additional information is available at  Simply enter the words “Student Financial Aid Handbook Reaffirmation” in the search field to get a list of applicable information.

Anne Del Plato, Eastern Reginal Director, Nelnet Partner Solutions

One Comment leave one →
  1. Eileen Thomas permalink
    September 20, 2012 8:13 am

    We always return the excess or reallocate between sub & unsub. Good to know about other options. Thanks.

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