As per the Department of Education, new borrowers "cannot receive subsidized loans for more than 150 percent of the published length of the borrower’s educational program"(FSA Handbook Apr 2015 pg.1-79).
This means, for example, that students in a Bachelor program that is meant to be completed in 4 years, cannot exceed 6 years worth of Subsidized loan usage.
- A first-time borrower is considered one of the following:
- Has no balance on any FFEL or Federal Direct Loan as of July 1, 2013,
OR
- Receives their first Direct Loan (any type) on or after July 1, 2013
- When a student has received Federal Direct Subsidized loans for a period of time that is equal to 150% of the published length of the student’s current academic program, the student may no longer receive subsidized loans for enrollment in that program or any program of equal or lesser length.
- A student’s maximum time to receive subsidized loans is established based upon the length of the program in which the student is enrolled.
- Remaining subsidized eligibility is calculated by subtracting the time the student has already received subsidized loans from maximum eligibility for the program in which the student is currently enrolled.
For a more in-depth understanding of this regulation and the impact to loan eligibility, please refer to tFederal Student Aid Time LImitation on Direct Subsidized Loan Eligibility for First-Time Borrowers (PDF).