Considerations for Returning to School

If you return to school in the future, keep in mind that a new Direct Loan borrower on or after July 1, 2013 (who didn’t have an outstanding balance on a prior FFELP or Direct Loan as of the date a Direct Loan is received on or after July 1, 2013), may not receive Direct Subsidized Loans for more than 150 percent of the published length of the educational program in which he or she is enrolled.

For example, if you are enrolled in a four-year bachelor’s degree program, the maximum length of time for which you can receive Direct Subsidized Loans is six years (150% x 4 years). Likewise, if you are attending a two-year program, you can receive Direct Subsidized Loans for three years (150% x 2 years).

When considering whether to borrow loans in the future, keep in mind:

• Your maximum eligibility can change if you change programs. If you receive Direct Subsidized Loans for one program, they will generally count against your new maximum subsidized eligibility period and you eventually may not be eligible for further Direct Subsidized Loans. This may especially affect you if you go from a longer program to a shorter one and have already borrowed subsidized loans.
• If you borrow the maximum Direct Subsidized Loan limit, you may still be eligible for Direct Unsubsidized Loans.
• If you reach this Direct Subsidized Loan limit, you will become responsible for the accruing interest on the Direct Subsidized Loans (instead of the federal government paying the interest for you) and the Direct Loan Program will notify you that you will be responsible for the interest that would have previously been subsidized.
  • For example, on subsidized loans totaling $15,000, you could be responsible for the $1,020 in interest that accrues per year if you lose the interest subsidy.
  • The Direct Loan Program and your school will help monitor your subsidized eligibility to try to help prevent this from occurring
• More information about your loan history and this 150% rule is available through:
  • The NSLDS website, http://nslds.ed.gov, where you can review your loan history and determine if you are responsible for accruing interest on your Direct Subsidized Loans.
  • The U. Department of Education publication http://ifap.ed.gov/eannouncements/attachments/051613DirectSubsidizedLoanLimit150PercentAnnounce1Attach.pdf
  • Your financial aid office.

The bottom line with the 150% rule is to make good educational choices and complete your program within 150% of the published length of the program.