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150% Direct Subsidized Loan Limit

New federal regulations (Public Law 112-141, Moving Ahead for Progress in the 21th Century Act) have set a limit on the amount of time for which an undergraduate student is eligible for a Direct Subsidized Loan. A student is only eligible for a maximum timeframe of 150% of the published length of the borrower’s current educational program. The changes affect all students who were or are first-time borrowers after July 1, 2013.

A student is no longer eligible for Direct Subsidized Loans once he/she has received Direct Subsidized Loans for the maximum timeframe. The 150% maximum timeframe is measured in academic years. Most undergraduate degree programs at Indiana State University require 120 earned credit hours for degree completion, and are scheduled to be finished in 4 years. You can multiply your program’s published length by 1.5 to find the maximum timeframe for your program. For example, a 4-year Bachelor’s Degree program would have a maximum timeframe of 6 years (4 X 1.5 = 6). In this example the student would not be eligible for Direct Subsidized Loans after the 6 year window has elapsed.

There are additional ramifications to not completing the degree in the maximum timeframe. If the student continues enrollment in their program or enrolls in another program of equal or lesser length, they will lose their loan subsidy on outstanding subsidized loans. Those loans would start accruing interest starting with the date of the enrollment that caused the subsidy to be lost. Enrollment in a graduate program will not cause a borrower to lose interest subsidy on previous loans. Graduate students are not eligible for Direct Subsidized Loans. All interest accrued after subsidy has been lost is the borrower’s responsibility.





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