Subsidized Loan Eligibility Limited for New Borrowers Effective July 1, 2013
As a result of federal legislation enacted in July 2012, eligibility for the Direct Loan interest subsidy will be limited for new borrowers on or after July 1, 2013. The law restricts the period of time for which a borrower may receive subsidized loans, in the aggregate, to 150 percent of the published length of the student's current educational program. Once the student reaches that limit, he or she may borrow only unsubsidized loans, and interest begins to accrue on the student's outstanding subsidized loan. This is regardless to whether the student has completed the undergraduate level program at the institution. Current loan borrowers will not be affected by this provision.
New borrowers will not see the effect of the subsidy limit until a minimum of 150 percent of his or her published program length has elapsed. The law measures a new borrower's access to the interest subsidy as the period of time for which the borrower has received subsidized loans, in the aggregate (including, but not limited to undergraduate study, part-time attendance, preparatory coursework, and teacher certification coursework, Post Baccalaureate coursework.