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

150% Direct Subsidized Loan Limit July 6, 2012 signed into Public Law 112-141 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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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. September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

Consequence: Interest Subsidy Loss Based on enrollment, not borrowing, or requesting aid! September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

Determining When Eligibility is Lost September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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) September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

Exception 1: Enrollment Status Calculated subsidized usage period is prorated by enrollment status Proration occurs before rounding September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

Loss of Interest Subsidy No Remaining Eligibility Period No Completion Enroll Subsidy loss September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

Enrollment Types & Subsidy Loss 1 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 MASFAP Conference I Celebrating our past, inspiring our future.

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 September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

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 September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

COD Website Inquiry and Calculator This is the Subsidized Eligibility Information page September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

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 MASFAP Conference I Celebrating our past, inspiring our future.

Resources NSLDS Enrollment Reporting NSLDS Enrollment Reporting Guide NSLDS Customer Support Team Phone: 800-999-8219 Email: nslds@ed.gov 150% Regulations & Processing Federal Registers, Electronic Announcements, Webinar recordings, NSLDS Newsletters, COD Technical Reference Email: 150Percent-Questions@ed.gov FAQs: 20 new ones recently posted September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.

Questions? September 16, 2018 MASFAP Conference I Celebrating our past, inspiring our future.