Direct Subsidized Stafford Loans Time Limitation

Once you reach the 150 percent limit you may only borrow Unsubsidized Stafford Loans.  In addition you lose eligibility for the interest subsidy (with certain exceptions) and interest begins to accrue on your outstanding (unpaid) Subsidized Stafford Loan(s).

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% times 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% times 2 years = 3 years).

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.  For example, 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.  For example, 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.  For example, 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 unless you receive the maximum annual Direct Subsidized Loan.

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 to be enrolled 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 for periods when it normally would have done so.  In addition interest begins to accrue on your outstanding (unpaid) Subsidized Stafford Loan(s).

Click on the additional information link to receive details and examples from Federal Student Aid.  Take loan entrance counseling at www.studentloans.gov.