Direct Subsidized Stafford Loans Time Limitation

There is a limit on the maximum period of time that you can receive Direct Subsidized loans. All first-time borrowers as of July 1, 2013 are affected by this time limit.

  • A first-time borrower is a student with no outstanding balance on a FFEL or Direct Loan when receiving a Direct Loan on or after July 1, 2013.

The time limitation restricts the period of time for which a borrower may receive Subsidized Stafford loans to 150 percent of the published length of the borrower’s current educational program.

For example, if you are enrolled in a 4-year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Stafford Loans is 6 years (150% x 4 years = 6 years). If you are enrolled in a 2-year associate degree program, the maximum period for which you can receive Direct Subsidized Stafford Loans is 3 years (150% x 2 years = 3 years).

Impact to students (Exceptions may apply)

Once you reach the 150 percent limit you will have the following consequences:

  • Eligibility Loss – you will lose eligibility for additional Direct Subsidized loans when you have received Direct Subsidized loans for 150% of your current academic program.
  • Interest Subsidy Loss – if you continue enrollment in any undergraduate program after you have received Direct Subsidized loans for your maximum eligibility period, you will lose eligibility for the interest subsidy (with certain exceptions).
  • If Eligibility is lost, you may still be eligible for Direct Unsubsidized loans.

Periods that count toward your 150% maximum eligibility period:

The periods of time that counts toward your 150% maximum eligibility period include periods of enrollment (also known as ‘loan periods’) for which you received Direct Subsidized Loans.

Example 1: if you are a full-time student and you receive a Direct Subsidized Loan that covers the fall and spring semesters (a full academic year) this will count as one year toward your 150% maximum eligibility period.

If you receive a Direct Subsidized Loan for a period of enrollment that is shorter than a full academic year, the period that counts toward your 150% maximum usage period will generally be reduced accordingly.

Example 2: if you are a full-time student and you receive a Direct Subsidized Loan that covers the fall semester but not the spring semester, this will count as one-half of an academic year toward your 150% maximum eligibility period.

Effect of borrowing while enrolled less than full-time:

If you receive a Direct Subsidized Loan when you are enrolled less than full-time, the period that is counted toward your 150% maximum eligibility period will be reduced.

Example 3: if you are enrolled half-time and receive a Direct Subsidized Loan for a period of enrollment that covers a full academic year, this will count as only one-half of a year toward your 150% maximum eligibility period.

Loss of eligibility for additional Direct Subsidized Loans and becoming responsible for paying interest:

After you have received Direct Subsidized Loans for your 150% maximum eligibility period, you are no longer eligible to receive additional Direct Subsidized Loans. However, you may continue to receive Direct Unsubsidized Loans.

In addition, if you continue enrollment in any undergraduate program after you have received Direct Subsidized Loans for your 150% maximum eligibility period, you will lose your interest subsidy (with certain exceptions). This means that the government will no longer pay the interest that accrues on your Direct Subsidized Loans. In addition interest begins to accrue on your outstanding (unpaid) Subsidized Stafford Loan(s).

Click here for additional information from Federal Student Aid. Visit StudentLoans.gov to take loan entrance counseling.