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Limit on Subsidized Loan Eligibility

As per the Department of Education, new borrowers "cannot receive subsidized loans for more than 150 percent of the published length of the borrower’s educational program".(FSA Handbook Apr 2015 pg.1-79)

This means, for example, that students in a Bachelor program that is meant to be completed in 4 years, cannot exceed 6 years worth of Subsidized loan usage.

  • A first-time borrower is considered one of the following:
      • Has no balance on any FFEL or Federal Direct Loan as of July 1, 2013,
    • OR
      • Receives their first Direct Loan (any type) on or after July 1, 2013
  • When a student has received Federal Direct Subsidized loans for a period of time that is equal to 150% of the published length of the student’s current academic program, the student may no longer receive subsidized loans for enrollment in that program or any program of equal or lesser length.
  • A student’s maximum time to receive subsidized loans is established based upon the length of the program in which the student is enrolled.
  • Remaining subsidized eligibility is calculated by subtracting the time the student has already received subsidized loans from maximum eligibility for the program in which the student is currently enrolled.

For a more in-depth understanding of this regulation and the impact to loan eligibility, please refer to this document.

Modified 5/26/2016
Article ID: 1969