Robert Vallas, Trainer

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150 Direct Subsidized Loan Limits

• Robert Vallas, Trainer
• U.S. Department of Education

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First-Time Borrower and Consequences
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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
• Example B

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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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Consequence Interest Subsidy Loss

• Based on enrollment, not borrowing, or requesting
  aid.

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Loss of Eligibility
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Determining When Eligibility is Lost
150 limit is met and further eligibility is
lost when Remaining Eligibility Period is zero
(or less).
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Maximum Eligibility Period
150 limit is met (eligibility is lost) when
remaining eligibility period is zero (or less).
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Maximum Eligibility Period

• Maximum eligibility period is 150 of the
  published length of borrowers 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

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Converting Months/Weeks To Years

•  

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Subsidized Usage Period
150 limit is met (eligibility is lost) when
remaining eligibility period is zero (or less).
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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

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Calculating Subsidized Usage Period

•  

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Example 1 Usage
Program is semester-based. Scheduled academic
year includes the fall and spring semesters.
Student receives loan for fall semester only.
 
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
 
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Enrollment Status Exception

• Calculated subsidized usage period is prorated by
  enrollment status
• Proration occurs before rounding

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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.

 
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
 
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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.
• Can only occur for standard-term programs or for
  non-standard-term programs that are substantially
  equal and are each at least nine weeks in length.

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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.

 
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
 
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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
• Must be updated if students actual enrollment or
  eligibility doesnt match originally reported
  loan period

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Loan Period Academic Year

• Academic year period to which the annual loan
  limit applies
• 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 non-standard NSE9W terms or do not use
  terms, corresponds to period of time required for
  borrower to complete a Title IV academic years
  worth of coursework (BBAY)

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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.
• An academic year that corresponds to a term is
  never correct.

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Example 6

• 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 borrowers completion
  of 26 weeks of instruction or 900 clock hours

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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

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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

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Updating Academic Years

• 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

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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

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Determining When Limit Is Met
150 limit is met and further eligibility is
lost when Remaining Eligibility Period is zero
(or less).
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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

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Example 7 Remaining Eligibility

• Student receives 5 full years of Direct
  Subsidized Loans while enrolled in a 4-year BA
  program.

Maximum Eligibility Period 6 Years
All Subsidized Usage Periods 5 Years
Remaining Eligibility Period 1 Year
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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.

After year 3 of 2-year program Upon transfer to 4-year program
Maximum Eligibility Period 3 Years 6 Years
All Subsidized Usage Periods 3 Years 3 Years
Remaining Eligibility Period 0 Years 3 Years
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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.

After year 1 of 2-year program Upon transfer to 1-year 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.
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Loss of Interest Subsidy
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Loss of Interest Subsidy Benefits

• Subsidy loss is effective on the date of the
  triggering enrollment.

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Enrollment Types Subsidy Loss
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Enrollment Types No Subsidy Loss

• 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

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Periods of Interest Subsidy

• Borrower with interest subsidy
• Borrower who lost interest subsidy

Subsidized Period
Unsubsidized Period
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Which interest is the borrowers?

• 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.

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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.

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
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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.
• 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.

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 after eligibility loss. No, borrower enrolled in a longer program.
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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.

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.
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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.

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. Yes, transfer caused borrower to exceed max.
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Special Provisions
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Preparatory Coursework
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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

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Teacher Certification Programs

• Borrower cannot lose interest subsidy by
  enrolling
• 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

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Teacher Certification in 2013-2014

• 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

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Teacher Certification in 2013-2014

• Ad-hoc reporting file will likely include

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Short-Term Programs in 2013-2014

• 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

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Short-Term Programs in 2013-2014

• For this specific purpose only a short-term
  program one that is shorter than
• 1.5 years
• 10 months
• 40 weeks

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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
• 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

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Unsubsidized Loan Eligibility
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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.

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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.

Scenario 1 Amount
Base amount (sub. loan) 4,500
Base amount (unsub. loan) N/A
Addl amount (unsub. loan) 2,000
Scenario 2 Amount
Base amount (sub. loan) 4,000
Base amount (unsub. loan) 0
Addl amount (unsub. loan) 0
Received full subsidized loan amount
Did NOT receive full subsidized loan amount
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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 Amount
Base amount (sub. loan) 4,000
Base amount (unsub. loan) 500
Addl amount (unsub. loan) 2,000
Scenario 2 Amount
Base amount (sub. loan) 3,800
Base amount (unsub. loan) 0
Addl amount (unsub. loan) 0
Did NOT receive full subsidized loan amount that
he/she was eligible for
Received full subsidized loan amount that he/she
was eligible for
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Implementation
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COD Reporting Requirements
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Other Changes to COD
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Other Changes to COD

• Each time school submits an origination or
  disbursement record COD will
• Calculate Subsidized Usage Periods, including the
  new loan
• Inform school of borrowers Maximum Eligibility,
  Subsidized Usage, and Remaining Eligibility
  periods
• COD will also inform borrower in disclosure
  statement

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NSLDS Reporting Requirements
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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 students 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

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Loan Counseling
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Entrance Counseling Resources
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Evaluation and Feedback

• To ensure quality training, please complete an
  online session evaluation at
• https//s.zoomerang.com/s/RobertVallas
• The purpose of the feedback is to ensure we are
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  training program for our customers.  This
  feedback tool will provide a means to educate and
  inform us of areas for improvement, and support
  an effective means for listening to our customer
  base.
•  

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Contact Information

• If you have follow-up questions about this
  session, contact
• Robert Vallas, Trainer
• robert.vallas_at_ed.gov
• To provide feedback to my supervisor
• Mark Gerhard, Title IV Training
• Supervisor
• mark.gerhard_at_ed.gov

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QUESTIONS?

• E-mail 150Percent-Questions_at_ed.gov
• Subject Include organizational affiliation