1. Overview of 150% Direct Subsidized Loan Limit
Sabrina Osborn,
Metropolitan Community College
& Robin Elkthunder,
Columbia college

2. 150% Direct Subsidized Loan Limit
July 6, 2012 signed into Public Law
Eliminates subsidy on Subsidized Loans when “first-time borrower” enrollment exceeds 150% of the published program length
Subsidized Usage Limit Applies (SULA)
September 16, 2018
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3. First-time Borrower
Applies only to first-time borrowers as of July 1, 2013:
No outstanding balance on FFEL or Direct Loan when receiving Direct Loan on or after July 1, 2013
September 16, 2018
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4. Consequence: Eligibility Loss
Borrower loses eligibility for additional Direct Subsidized Loans when borrower has received Direct Subsidized Loans for 150% of their current academic program.
If eligibility is lost, borrower still eligible for Direct Unsubsidized Loans.
Generally measured in time, not dollars.
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5. Consequence: Interest Subsidy Loss
Based on enrollment, not borrowing, or requesting aid!
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6. Determining When Eligibility is Lost
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7. Maximum Eligibility Period (MEP)
Maximum eligibility period is 150% of the published length of borrower’s current or upcoming academic program
Varies by program
Multiply published length of program by 1.5
Measured in academic years or portions
ED will calculate using school-reported information
Two exceptions
September 16, 2018
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8. Exception 1: Bachelor’s Completion
Bachelor’s degree-completion programs will have a Maximum Eligibility Period of six years
Definition:
Only admits students who have completed
Associate degree or
Two years of prior undergraduate coursework
September 16, 2018
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9. Exception 2: Special Admission
Special admission associate degree programs will have a Maximum Eligibility Period of six years
Definition:
Only admits students who have completed
Associate degree or
Two years of prior undergraduate coursework
Admits students on a competitive basis (i.e., no open enrollment)
Prepares students for occupation requiring licensure from state
Example: Nursing program
September 16, 2018
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10. Subsidized Usage Period (SUP)
A Subsidized Usage Period is the period of time for which a borrower receives a Direct Subsidized Loan
Calculated loan-by-loan
Measured in academic years or portions
Rounded up/down to nearest tenth of a year
Includes only periods when Direct Subsidized Loan received
ED will calculate using school-reported information
Two exceptions
September 16, 2018
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11. Calculating Subsidized Usage Period
Loan Period: Period of enrollment for which loan is intended
Academic Year: Period used to track annual loan limits (SAY/BBAY)
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12. Exception 1: Enrollment Status
Calculated subsidized usage period is prorated by enrollment status
Proration occurs before rounding
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13. Exception 2: Annual Loan Limit
Only circumstance where dollars are considered is when a student receives a Direct Subsidized Loan in the amount of the annual loan limit
Can only occur for standard-term programs or for non-standard-term SE9W programs
September 16, 2018
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14. Remaining Eligibility Period (REP)
How much eligibility a borrower has left under the 150% limit
Accounts for Direct Subsidized Loans received for all enrollment in all programs (except teacher certification programs)
Eligibility lost when remaining eligibility is zero or less
ED will calculate using school-reported information
September 16, 2018
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15. Loss of Interest Subsidy
No Remaining Eligibility Period
No Completion
Enroll
Subsidy loss
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16. Enrollment Types & Subsidy Loss1
Student lost eligibility
Enrolled at least ½ time in same undergraduate program 2
Enrolled at least ½ time in an undergraduate program of equal or lesser length 3
Student had remaining eligibility
Enrolled at least ½ time in shorter undergraduate program where usage ≥ maximum
September 16, 2018
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17. Periods of Interest Subsidy
In-school
Grace
Std. Repay
Defer.
Forbear.
IBR & PAYE
Borrower with interest subsidy:
Borrower who lost interest subsidy:
In-school
Grace
Std. Repay
Defer.
Forbear.
IBR & PAYE
Subsidized
Unsubsidized
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18. Which interest is the borrower’s?
Interest accrued before subsidy loss
Interest accrued after subsidy loss
ED’s responsibility
Borrower’s responsibility
Subsidy loss is not retroactive to the date of disbursement or from the date of the loss of eligibility. Loss of subsidy is from the date of the enrollment that caused the loss of subsidy.
September 16, 2018
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19. Example 1
Student received 6 years of Subsidized Loans while enrolled in a 4-year BA program. Student does not complete at the end of the 6th year, and enrolls for a 7th year.
Maximum Eligibility Period
6 Years
All Subsidized Usage Periods
Remaining Eligibility Period
0 Years
Subsidy Loss
Yes, enrolled with no remaining eligibility and without completing
September 16, 2018
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20. Example 2
Student received 3 years of Subsidized Loans in a 2-year program. After completing 3rd year but not completing the program, student transfers into a 4-year program.
End of year 3 of 2-year program
Upon transfer to 4-year program
Maximum Eligibility Period
3 Years
6 Years
All Subsidized Usage Periods
Remaining Eligibility Period
0 Years
Subsidy Loss
No, borrower has not re-enrolled.
No, borrower has remaining eligibility.
September 16, 2018
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21. Example 3
Student is enrolled in a 2-year program and received 3 years of Subsidized Loans for enrollment in that program. Student enrolls for one more semester in the 2-year program, and then transfers to a 4-year program.
Before transfer to 4-year program
Upon transfer to 4-year program
Maximum Eligibility Period
3 Years
6 Years
All Subsidized Usage Periods
Remaining Eligibility Period
0 Years
Subsidy Loss
Yes, borrower enrolled after eligibility loss.
No, borrower enrolled in a longer program.
Student regains eligibility for Subsidized Loans upon transfer.
Any new Subsidized Loans will have interest subsidy.
Prior Subsidized Loans that lost subsidy do not regain subsidy.
September 16, 2018
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22. Example 4
Student received 5 years of Subsidized Loans while enrolled in a 4-year BA program. The student completes the program and then enrolls in a 2-year AA program.
End of year 5 of 4-year program
Upon transfer to 2-year program
Maximum Eligibility Period
6 Years
3 Years
All Subsidized Usage Periods
5 Years
Remaining Eligibility Period
1 Year
-2 Years
Subsidy Loss
No, borrower has remaining eligibility.
No, borrower graduated from prior program on time.
September 16, 2018
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23. Example 5
Student received 5 full years of Direct Subsidized Loans while enrolled in a 4-year BA program. The student does not complete the program and then enrolls in a 2-year AA program.
End of year 5 of 4-year program
Upon transfer to 2-year program
Maximum Eligibility Period
6 Years
3 Years
All Subsidized Usage Periods
5 Years
Remaining Eligibility Period
1 Year
-2 Years
Subsidy Loss
No, borrower has remaining eligibility.
Yes, transfer caused borrower to exceed maximum eligibility.
September 16, 2018
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24. Special Provisions: Preparatory Coursework
For Enrollment in an Undergraduate Program
Maximum Eligibility Period is 150% of program for which coursework is preparing the student.
Subsidized Usage Periods count against maximum eligibility.
Enrolling could result in loss of interest subsidy.
For Enrollment in a Grad/Professional Program
Maximum Eligibility Period is 150% of program for which borrower most recently received Direct Subsidized Loan.
NOT possible to lose interest subsidy by enrolling.
September 16, 2018
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25. Special Provisions: Teacher Certification Programs
Programs that do not lead to a degree/certificate at institution, but lead to State credential that is required for teaching
Total subsidized usage period attributable to loans received for teacher certification programs
Total subsidized usage period attributable to loans received for all other undergraduate programs and preparatory coursework
Not only does the "clock restart", but the borrower cannot lose interest subsidy by enrolling in teacher certification program
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26. COD to NSLDS
COD sends Direct Loan data to NSLDS on a daily basis to be used by NSLDS for 150% calculation purposes
Used by NSLDS to calculate eligibility for continued subsidy
Includes student, award, and disbursement data from prior-day COD processing
(Subsidized, Unsubsidized, and Direct PLUS Loan data)
September 16, 2018
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27. NSLDS – Display SULA Flag
Display of Subsidized Usage Limit Applies (SULA) Flag
Indicates whether the borrower is subject to the 150% Direct Subsidized Loan Limit provision
Sent to NSLDS by COD and by Federal Loan Servicers
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28. Subsidized Usage Web Page
The Subsidized Usage Period Page displays a student’s:
Maximum Eligibility Period
Subsidized Usage Period
Sum SUP
Loan-Level SUP
Program-level Enrollment
Remaining Eligibility Period
Link to Subsidized Usage Page found on Enrollment Summary page
September 16, 2018
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29. September 16, 2018
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30. NSLDS – Loss of Subsidy
NSLDS FAP displays the new Loss of Subsidy warning icon for borrowers who have lost interest subsidy on any:
D0 - Direct Stafford Subsidized (SULA Eligible) loans
D9 - Direct Consolidation Subsidized (SULA Eligible) loans
A field has also been added to Loan Summary for (D0) and (D9) loans to display the status of the interest subsidy:
September 16, 2018
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31. COD Website Inquiry and Calculator
This is the Subsidized Eligibility Information page
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32. Student Notifications
COD produces a disclosure statement for each loan origination record it receives and accepts. That statement will include the SUP for that loan, sum of SUPs, and the REP. Therefore, each loan keeps the borrower informed until no further loans are accepted
The SAR will communicate if they are subject to 150% and will also include the sum of SUPs. It will also tell them if they’ve lost subsidy and are responsible for the accruing interest
The federal loan servicer informs students when a loan has lost interest subsidy
This information is also available in NSLDS
September 16, 2018
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33. Resources NSLDS Enrollment Reporting NSLDS Enrollment Reporting Guide
NSLDS Customer Support Team Phone:
150% Regulations & Processing
Federal Registers, Electronic Announcements, Webinar recordings, NSLDS Newsletters, COD Technical Reference
FAQs: 20 new ones recently posted
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34. Questions?
September 16, 2018
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