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.
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:
First-Time Borrower, Example 2:
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.