What is the 150% Loan limit rule regarding federal direct subsidized loans?

Beginning July 1st, 2013, any first time borrower, (which is defined as someone who has either never borrowed a federal student loan previously, or has borrowed previously but currently has a zero balance), will only be able to borrow federal direct subsidized loans for a maximum of 150% of the published program length in which they is enrolled. Once a student reaches the 150% mark, they will not be able to borrow further subsidized loans, however he/she may be eligible for unsubsidized loans. Additionally, those subsidized loans that had been borrowed up to the 150% point will lose further government subsidy and interest on these loans will begin to accrue. From the 150% point forward, these subsidized loans will become unsubsidized loans. For example, if the published length of a program is the equivalent of four years, a student may borrow subsidized loans for the equivalent of six years while in the same program, if all other eligibility requirements are met.

See the following FATV Video Link for more information: What is the 150% Loan limit rule regarding federal direct subsidized loans?

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Topic Information
  • Topic #: 8202-3673
  • Date Created: 9/30/2013
  • Last Modified Since: 5/7/2014
  • Viewed: 574
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