150% Subsidized Loan Eligibility
2013 Tri-State Fall Conference
Angie HovatterAndrew Harvey
Who’s Counting
Public Law 112-141O Moving Ahead for Progress in the 21st
Century (MAP 21) – enacted July 6, 2012.O Amended the HEA to establish a limit
on Direct Subsidized Loan eligibilityO Waived requirement for negotiated
rulemaking and master calendar.
What did it say?O A new borrower
on or after July 1st, 2013 cannot receive subsidized loans for more than 150% of the published length of the borrower’s educational program.
O Affects only 1st time borrowersO NO effect on Unsubsidized Loans or
PLUS loans
O Determining When 150% Limit is Met
O Maximum Eligibility Period (less) Total Subsidized Usage Periods (equals) Remaining Eligibility Period
Maximum Eligibility Period Examples
Program Length
Max. Eligibility Period
5-Year Bachelor’s Degree
X 1.5 7.50 Years
4-Year Bachelor’s Degree
X 1.5 6.00 Years
2-Year Associate’s Degree
X 1.5 3.00 Years
2-Year Certificate Program
X 1.5 3.00 Years
Direct Subsidized Loan Limitation
O Student’s maximum time to receive Direct Subsidized Loans is established based on the length of the program in which the student is currently enrolled.
Examples
O Student receives 3 full years of Direct Subsidized Loans while enrolled in two-year program.
O Max = 3 years (less) Usage (3 years) = ZERO remaining eligiblity.
O Student receives 3 full years of Direct Subsidized loans while enrolled in a two-year program.
O Student transfers to a four-year program.
O Maximum Eligibility Period = 6 years.
O Total Usage = 3 YearsO Remaining Eligibilty =
3 Years
O Student receives 2 full years of Direct Subsidized Loans while enrolled in a four-year program.
O Student transfers to a two-year certificate program.
O Maximum Eligibility = 3 years
O Total Usage = 2 yearsO Remaining Eligibility =
1 year
O Student receives 5 full years of Direct Subsidized Loans while enrolled in a four-year program.
O Student enrolls in another four-year program.
O Maximum Eligibility Period = 6 year
O Total Usage = 5 yearsO Remaining Eligibility =
1 year
O Student receives 6 full years of Direct Subsidized Loans while enrolled in a four-year program.
O Student continues enrollment in the same four-year program.
O Maximum Eligibility = 6 years
O Total Usage = 6 yearsO Remaining Eligibility
=ZERO
O Student received on Direct Subsidized Loan while enrolled in an 18-week certificate program.
O Student enrolls in a two-year program.
O Maximum Eligibility = 3 years
O Total Usage = 0.50 yearsO Remaining Eligbility =
2.5 years
Loss of Interest Subsidy
O Borrower responsible for interest triggered from date of continued or subsequent enrollment.
O Responsible for interest whether or not student continues borrowing.
O Loan remains Direct Subsidized Loan (just loses subsidy)
O Lost interest subsidy on a loan cannot be regained.
O Borrower enrolls in a four-year program (max 6 years)
O Received 4 years of Direct Subsidized Loans.
O Has 2 years remaining in eligibility.O Borrower transfers to a two-year program
(max 3 years)O Borrower has NO REMAINIG ELIGIBILITY.
Whose keeping track?O ED/FSA will calculate, and
inform studentsO CPS – Codes and Comments
on SAR/ISIRO NSLDS – New BorrowerO NSLDS – Loss of Subsidy
IndicatorO COD – Reports to SchoolO COD – Editing & EnforcementO Direct Loan Servicers – Loss
of Subsidy Benefits
What you we have to do?
O Report and Update enrollment and loan periodO <AcademicYearBeginDa
te> &<AcademicYearEndDate>
O <FinancialAidBeginDate> & <FinancialAidEndDate>
2014-2015 and beyondO Additional Information to Report
O Student’s Enrollment Leve (FT, TQT, HT)
O Classification of Instructional Program Code (CIP)
O Credential Level (Certificate, Diploma, Degree)
O Length of Program (years, months, weeks)
O Special Program Flag (Teacher Certification, Preparatory)
Entrance Counselinghttp://ifap.ed.gov/eannouncements/attachments/051613DirectSubsidizedLoanLimit150PercentAnnounce1Attach.pdf
Additional ResourcesO Dear Colleague Letter GEN-13-13O 150% Webinar (June 4 or June 6)O FSA Handbook (Chapter 6 – Eligibility
for Specific FSA Programs) pg 1-71O NASFAA Your Questions Answered:
The 150 Percent Rule