There is a new provision that limits a first-time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150 percent of the length of the borrower’s educational program (“the 150% limit”).

  • A Subsidized Direct loan is a loan for students with financial need as determined by federal regulations. No interest is charged while you are in school at least half-time, during your grace period, and during deferment periods.

    • Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150 percent limit to lose the interest subsidy on their Direct Subsidized Loans.

  • The 150% Direct Subsidized Loan Limit provision applies only to “first-time borrowers” on or after July 1, 2013:

  • The Department of Education will determine whether borrowers are “first-time borrowers” for purposes of the 150% limit.


First-Time Borrower, Example 1:

  1. Student has never borrowed before
  2. Student enrolls
  3. Student receives a Direct Loan
  4. Student is a first-time borrower


First-Time Borrower, Example 2:

  1. Student received FFEL/Direct Loans prior to July 1, 2013
  2. Student pays off all FFEL/DL in June 2015
  3. Student enrolls in 2017
  4. Student receives a new Direct Loan in 2017
  5. Student is a first-time borrower


Maximum Eligibility Period

The 150 Percent Direct LSubsidized Loan Limit provision uses a calculation that includes the borrower's "Maximum Eligibility Period."

* A borrower's Maximum Eligibility Period is a period of time that is equal to 150% of the published length of the student's academic program. 

Maximum Subsidized Loan Eligibility Period
Program Length 150 Percent Maximum Subsidized Loan Eligibility Period
2-Year Associates X 1.5 3.00 Years (Based on Full-Time Enrollment)
1-Year Certificate X 1.5 1.50 Years (Based on Full-Tme Enrollment)
1-Semester Certificate Program X 1.5 1 Semester (Based on Full-Time Enrollment),2,3,25,4,5,16,6,7,17,8,9,10,21,11,18,75,74,12,76,13,19,14,26,15,20,27
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