150% Direct Subsidized Loan
Limits
Greg Martin
U.S. Department of Education
First-Time Borrower and
Consequences
2
First-Time Borrower
Applies only to first-time borrowers as of July 1, 2013:
Student who has no outstanding balance on a FFEL or Direct
Loan when receiving a Direct Loan on or after July 1, 2013.
Example A
Student has
never
borrowed
before
Student
enrolls in
August 2013
Student
receives a
Direct Loan
Student is a
first-time
borrower
Example B
Student received
FFEL and Direct
Loans prior to
July 1, 2013
3
Student pays off
all FFEL and
Direct Loans in
2015
Student enrolls
in 2017
Student receives
a new Direct
Loan in 2017
Student is a firsttime borrower
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.
Generally measured in
time, not dollars.
If eligibility is lost, borrower still eligible for Direct
Unsubsidized Loans.
4
Consequence: Interest Subsidy Loss
Lost eligibility
due to 150%
limit
Did not
complete
program
Enrolls in
program of
equal or
shorter length
Based on enrollment, not borrowing, or requesting aid.
5
Subsidy loss
Loss of Eligibility
6
Determining When Eligibility is Lost
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
150% limit is met and further
eligibility is lost when Remaining
Eligibility Period is zero (or less).
7
Remaining
Eligibility
Period
Maximum Eligibility Period
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
150% limit is met (eligibility is
lost) when remaining eligibility
period is zero (or less).
8
Remaining
Eligibility
Period
Maximum Eligibility Period
•
Maximum eligibility period is 150% of the published
length of borrower’s current or upcoming academic
program
•
•
•
•
9
Varies by program
Multiply published length of program by 1.5
Measured in academic years or portions
ED will calculate using school-reported information
Converting Months/Weeks To Years
10
Subsidized Usage Period
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
150% limit is met (eligibility is
lost) when remaining eligibility
period is zero (or less).
11
Remaining
Eligibility
Period
Subsidized Usage Period
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 down to nearest quarter of a year
• Includes only periods when Direct Subsidized Loan
received
• ED will calculate using school-reported information
12
Calculating Subsidized Usage Period
Loan Period: Period
of enrollment for
which loan is
intended
13
Academic Year: Period
used to track annual
loan limits (SAY/BBAY)
Example 1: Usage
Program is semester-based. Scheduled academic year
includes the fall and spring semesters. Student receives
loan for fall semester only.
14
Begin Date
End Date
Number of
Days
Loan Period
August 27, 2013
December 21, 2013
117
Academic Year
August 27, 2013
May 17, 2014
264
Enrollment Status Exception


Calculated
subsidized usage
period is prorated by
enrollment status
Proration occurs
before rounding
Full-time =
1.00
¾-time = 0.75
½-time = 0.50
Prorate Subsidized
Usage Period based
on enrollment status.
15
Example 2: Enrollment Status
Program is semester-based. Scheduled academic year
includes the fall and spring semesters. Student receives
loan for both semesters while enrolled half-time for both
semesters.
16
Begin Date
End Date
Number of Days
Loan Period
August 27, 2013
May 17, 2014
264
Academic Year
August 27, 2013
May 17, 2014
264
Annual Loan Limit Exception
Only circumstance where dollars are considered is when a
student receives a Direct Subsidized Loan in the amount of
the annual loan limit.
Borrow full
annual
loan limit
Received
for less
than 1 AY
Subsidized
Usage
Period = 1
Can only occur for standard-term programs or for nonstandard-term programs that are substantially equal and
are each at least nine weeks in length.
17
Example 4: Annual Loan Limit
Program is semester-based. Scheduled academic year
includes the fall and spring semesters. Third year student
receives loan of $5,500 for fall semester only.
18
Begin Date
End Date
Number of Days
Loan Period
August 27, 2013
December 21, 2013
117
Academic Year
August 27, 2013
May 17, 2014
264
Loan Period & Academic Year
•
•
•
Determines the Subsidized Usage Period
Covered in DCL GEN-13-13, applies to all Direct Loans
Loan Period – period of enrollment for which borrower
received loan
•
19
Must be updated if student’s actual enrollment or eligibility doesn’t
match originally reported loan period
Loan Period & Academic Year
•
Academic year – period to which the annual loan limit
applies
•
•
20
For credit-hour programs that use standard terms or non-standard
SE9W terms, corresponds to calendar period of terms in SAY or
BBAY
For clock-hour programs or credit-hour programs that use nonstandard NSE9W terms or do not use terms, corresponds to period
of time required for borrower to complete a Title IV academic year’s
worth of coursework (BBAY)
Example 5
•
•
•
•
•
Program: 2-years, credit hours, standard terms
Academic year: 30 weeks, 24 semester hours, SAY (Fall
2013 and Spring 2014)
Borrower enrollment: Spring semester 2014
Loan period: Spring semester 2014
Academic year: Begins on first day of the fall 2013
semester. Ends on last day of the spring 2014 semester.
•
21
An academic year that corresponds to a term is never correct.
Example 6
•
•
•
•
•
22
Program: 18 weeks, clock hours, non-term, ~35 clock
hours/week
Academic year: 26 weeks, 900 clock hours, BBAY
Borrower enrollment: Full program; borrower progresses
through payment periods on schedule
Loan period: Beginning and ending of 18 week program
Academic year: Beginning of enrollment in program
through end of the later of borrower’s completion of 26
weeks of instruction or 900 clock hours
Updating Loan Periods
•
•
•
•
Student does not enroll for a payment period covered by the
originally reported loan period
Student withdraws from a payment period and all loan funds
associated with the payment period are returned (R2T4)
Student cancels all of a disbursement of a loan that is
attributable to a payment period
Student is not otherwise eligible for a loan for a payment
period covered by the loan period
23
Updating Loan Periods - Continued
•
The student (in clock-hour programs, non-term programs,
and non-standard term NSE9W programs) is not
progressing to the next payment period as scheduled
•
*This is a non-exhaustive list
24
Updating Academic Years
•
•
25
Student is attending a program for which summer is not a
“required” term, attends summer, and receives a loan for
summer
The student (in clock-hour programs, non-term programs,
and non-standard term NSE9W programs) is not
progressing to the next payment period as scheduled
Scope of Guidance
•
Applies to all Direct Loans first disbursed on or after
July 1, 2013
• Applies to all Direct Loan types
• Applies to all students
• Applies to all eligible programs and coursework
• ED will monitor compliance with loan period and
academic year date reporting
26
Determining When Limit Is Met
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
150% limit is met and further
eligibility is lost when Remaining
Eligibility Period is zero (or less).
27
Remaining
Eligibility
Period
Remaining Eligibility Period
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
28
Example 7: Remaining Eligibility
Student receives 5 full years of Direct Subsidized Loans
while enrolled in a 4-year BA program.
Maximum
Eligibility
Period
29
All
Subsidized
Usage
Periods
Remaining
Eligibility
Period
Maximum Eligibility Period
6 Years
All Subsidized Usage Periods
5 Years
Remaining Eligibility Period
1 Year
Example 8: Remaining Eligibility
Student receives 3 years of Direct Subsidized Loans while
enrolled in a 2-year program. Student then transfers to a 4-year
program.
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
Remaining
Eligibility
Period
After year 3 of Upon transfer to
2-year program 4-year program
30
Maximum Eligibility Period
3 Years
6 Years
All Subsidized Usage Periods
3 Years
3 Years
Remaining Eligibility Period
0 Years
3 Years
Example 9: Remaining Eligibility
Student receives 1 year of Direct Subsidized Loans while
enrolled in a 2-year program. Student transfers to a 1-year
clock-hour program.
Maximum
Eligibility
Period
All
Subsidized
Usage
Periods
Remaining
Eligibility
Period
After year 1 of 2year program
Upon transfer to 1year cert. program
Maximum Eligibility Period
3 Years
1.5 Years
All Subsidized Usage Periods
1 Year
1 Year
Remaining Eligibility Period
2 Years
0.5 Years
Minimum loan period length in a clock-hour program is lesser of length of program or
academic year. School cannot disburse a Direct Subsidized Loan to this student.
31
Loss of Interest Subsidy
32
Loss of Interest Subsidy Benefits
No
Remaining
Eligibility
Period
No
Completion
Enroll
Subsidy
loss
Subsidy loss is effective on the date of the triggering
enrollment.
33
Enrollment Types: Subsidy Loss
1
2
3
Student lost
eligibility
Student lost
eligibility
Student had
remaining
eligibility
Enrolled at least
½ time in same
undergraduate
program
Enrolled at least
½ time in an
undergraduate
program of equal
or lesser length
Student enrolled at
least ½ time in
shorter
undergraduate
program where
usage ≥ maximum
34
Enrollment Types: No Subsidy Loss
•
•
•
35
Enrollment in a graduate or professional program
Enrollment in preparatory coursework necessary for
enrollment in a graduate or professional program
Enrollment in a teacher certification program where
school does not award an academic credential
Periods of Interest Subsidy
Borrower with interest subsidy:
In-school
Grace
Repay Std.
Defer.
Forbear.
Repay IBR/PAYE*
Borrower who lost interest subsidy:
In-school
Grace
Subsidized Period
Unsubsidized Period
36
Repay. –
Std.
Defer.
Forbear.
Repay –
IBR/PAYE
Interest
accrued
before
subsidy loss
Interest
accrued
after
subsidy loss
Borrower’s responsibility
ED’s responsibility
Which interest is the borrower’s?
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.
37
Example 10: Subsidy Loss
Student received 6 years of Subsidized Loans while
enrolled in a 4-year program. Student does not complete
and enrolls for a 7th year.
No Remaining
Eligibility Period
38
No Completion
Enrolls
Subsidy Loss
Maximum Eligibility Period
6 Years
All Subsidized Usage Periods
6 Years
Remaining Eligibility Period
0 Years
Subsidy Loss
Yes, enrolled with no remaining
eligibility and without completing
Example 11: Subsidy Loss
Student is enrolled in a 2-year program and received 3 years
of Subsidized Loans. Student enrolls for one more semester
in the same program, and then transfers to a 4-year program.
Before transfer
Upon transfer
Maximum Eligibility Period
3 Years
6 Years
All Subsidized Usage Periods
3 Years
3 Years
Remaining Eligibility Period
0 Years
3 Years
Subsidy Loss
Yes, borrower enrolled No, borrower enrolled in
Student regains eligibility after
for Subsidized
Loans upon
transfer.
eligibility loss.
a longer
program.
•
Any new Subsidized Loans will have interest subsidy.
Prior Subsidized Loans that lost subsidy do not regain subsidy.
•
•
39
Example 12: Subsidy Loss
Student received 5 years of Subsidized Loans while
enrolled in a 4-year program. Student completes the
program and then enrolls in a 2-year program.
No Remaining
Eligibility Period
No Completion
Enrolls
Subsidy Loss
End of year 5
Upon transfer
Maximum Eligibility Period
6 Years
3 Years
All Subsidized Usage Periods
5 Years
5 Years
Remaining Eligibility Period
1 Year
-2 Years
Subsidy Loss
No, borrower has
remaining eligibility.
No, borrower graduated
from prior program.
40
Example 13: Subsidy Loss
Student received 5 full years of Direct Subsidized Loans
while enrolled in a 4-year program. Student does not
complete and then enrolls in a 2-year program.
No Remaining
Eligibility Period
No Completion
Enrolls
Subsidy Loss
End of year 5
Upon transfer
Maximum Eligibility Period
6 Years
3 Years
All Subsidized Usage Periods
5 Years
5 Years
Remaining Eligibility Period
1 Year
-2 Years
Subsidy Loss
41
No, borrower has
Yes, transfer caused
remaining eligibility. borrower to exceed max.
Special Provisions
42
Preparatory Coursework
For Enrollment in an
Undergraduate
Program
For Enrollment in a
Grad/Professional
Program
Maximum Eligibility Period is
150% of program for which
coursework is preparing for.
Maximum Eligibility Period is
150% of program for which
borrower most recently received
Direct Subsidized Loan.
Subsidized Usage Periods count
against maximum eligibility.
Subsidized Usage Periods count
against maximum eligibility.
Enrolling could result in loss of
interest subsidy.
NOT possible to lose interest
subsidy by enrolling.
43
Teacher Certification Programs
•
•
•
Programs that do not lead to a degree/certificate at institution,
but lead to State credential that is required for teaching
Subsidized Usage Periods from non-teacher certification
programs do not count against maximum eligibility period for
teacher certification programs
Subsidized Usage Periods from teacher certification programs
do not count against maximum eligibility period for other
programs
44
Teacher Certification Programs
•
Borrower cannot lose interest subsidy by enrolling
•
•
45
Loans received for other undergraduate enrollment do not lose
subsidy upon enrollment in teacher certification program
Loans received for teacher certification program can never lose
subsidy, even upon enrollment in regular undergraduate program
Teacher Certification in 2013-2014
•
•
•
•
•
46
Loans received only count against the Maximum Eligibility
Period for Teacher Certification Programs
No way to assume enrollment in Teacher Certification
Program
Schools must provide ad-hoc reporting to COD starting in
February 2014
Number of impacted schools and borrowers is limited
More information in 150% EA #4
Teacher Certification in 2013-2014
Ad-hoc reporting file will likely include:
Borrower last name
Borrower first name
Borrower SSN
Borrower DOB
Loan’s Award ID
Boolean indicator (True/Yes)
47
Short-Term Programs in 2013-2014
•
•
•
•
•
48
First-time borrowers are always eligible to receive their
first Subsidized Loan under the 150% limit
Most borrowers will not receive a second loan before
schools begin using 2014-2015 COD that will track the
150% limit for schools
Possible for students in short-term programs to have
150% eligibility limitation
School must make own determination – can use ED
developed spreadsheet
More information in 150% EA #5
Short-Term Programs in 2013-2014
First-time
borrowers
In shortterm
programs
Receiving
second
loan for
2013-2014
School
using COD
for 20132014
School
determines
eligibility
For this specific purpose only a short-term program one
that is shorter than:
• 1.5 years
• 10 months
• 40 weeks
49
Enrollment Status in 2013-2014
•
Used to prorate Subsidized Usage Periods
•
•
2014-2015: Schools will report enrollment status to COD, including
three-quarter time enrollment
2013-2014: COD does not have enrollment status and NSLDS does
not have three-quarter time enrollment status
•
•
50
NSLDS reported enrollment status will be used - half-time if reported as “at least
half-time but less than full-time”
More information in 150% EA #3
Unsubsidized Loan Eligibility
51
Eligibility for Direct Unsub. Loans
A student cannot receive Direct Unsubsidized Loans for a
loan period until the student has received all Subsidized
Loan eligibility.
Is the
student able
to receive
Direct
Unsub.
Loan?
52
Yes
Student may
receive
Direct
Unsub. Loan
No
Student may
NOT receive
Direct
Unsub. Loan
Did student
receive all
Direct Sub.
Loans for
which eligible?
Example 15: Eligibility for Unsub.
Based on COA and EFC, a second-year dependent student
is eligible for a Direct Subsidized Loan in the amount of the
full annual loan limit of $4,500.
Received
full
subsidized
loan
amount
53
Scenario 1
Amount
Scenario 2
Amount
Base amount
(sub. loan)
$4,500
Base amount
(sub. loan)
$4,000
Base amount
(unsub. loan)
N/A
Base amount
(unsub. loan)
$0
Add’l amount
(unsub. loan)
$2,000
Add’l amount
(unsub. loan)
$0
Did NOT
receive full
subsidized
loan
amount
Example 16: Eligibility for Unsub.
Based on COA and EFC, a second-year dependent student
is eligible for a Direct Subsidized Loan in an amount that is
less than the full annual loan limit: $4,000.
Scenario 1
Received
full
subsidized
loan
amount that
he/she was
eligible for
54
Amount
Base amount
(sub. loan)
$4,000
Base amount
(unsub. loan)
$500
Add’l amount
(unsub. loan)
$2,000
Scenario 2
Amount
Base amount
(sub. loan)
$3,800
Base amount
(unsub. loan)
$0
Add’l amount
(unsub. loan)
$0
Did NOT
receive full
subsidized
loan
amount that
he/she was
eligible for
Implementation
55
COD Reporting Requirements
Existing
• Loan Period Dates
• Academic Year Dates
New for 2014-2015
•
•
•
•
•
•
•
•
56
CIP
Credential Level
Program Length
Length of Title IV Academic Year
Flags for Prep Coursework
Flag for Teacher Certification
Enrollment Status (full, ½, ¾)
Payment Period Begin Date
Other Changes to COD
The borrower is a first-time
borrower
School submits origination record
to COD
Subsidized Usage Period >
Remaining Eligibility Period
COD will reject the loan
57
Other Changes to COD
•
Each time school submits an origination or disbursement
record COD will:
•
•
•
58
Calculate Subsidized Usage Periods, including the new loan
Inform school of borrower’s Maximum Eligibility, Subsidized Usage,
and Remaining Eligibility periods
COD will also inform borrower in disclosure statement
NSLDS Reporting Requirements
Existing
• Enrollment Status – ½ and FT
New
•
•
•
•
•
•
•
59
CIP
Credential Level
Program Length
Length of Title IV Academic Year
Flags for Prep Coursework
Flag for Teacher Certification
Enrollment Status - FT, ¾, ½
Other Changes to NSLDS
•
•
•
•
Modify professional access and student view to display
150%-related information
Modify reports available to schools to include 150%-related
information
Pass information about student’s current Subsidized Usage
Period and whether the student has lost interest subsidy to
CPS, for inclusion on the SAR/ISIR
Inform Direct Loan servicers of borrowers enrollment and
loss of interest subsidy
60
Loan Counseling
61
Entrance Counseling Resources
StudentLoans.gov:
June 28 – contains a link to
PDF of counseling
information (entrance only)
StudentLoans.gov:
December – information
integrated into counseling
flow (entrance and exit)
150% EA #1:
May 16 – contains PDF of
counseling information that
is on StudentLoans.gov
(may be used for entrance
and exit)
62
QUESTIONS?
E-mail: 150Percent-Questions@ed.gov
Subject: Include organizational affiliation
63