New Federal Direct Subsidized Loan Regulations!
Effective July 1, 2013, federal law will limit the amount of Federal Direct Subsidized Loans that a first-time loan borrower can receive to no more than 150% of the length of their program. For example, a student enrolled in a two year degree program may be able to receive loans for three academic years, 2 years x 150% = 3 years). Once that limit has been exceeded, a student may borrow only Unsubsidized Loans, and will begin to incur interest charges on their outstanding Subsidized Loans.
Note: A first-time loan borrower is someone who on July 1, 2013 has no outstanding balance of principal or interest on a Direct Loan Program or FFEL Program loan. A borrower who has an outstanding loan balance as of July 1, 2013 is not subject to the 150% eligibility limit. If a student had a loan balance prior to July 1, 2013 but paid it in full, and then received a new Direct Loan on or after July 1, 2013, the student will be considered a “first-time borrower” and subject to the loan eligibility limit.
Additionally, the interest rate on Subsidized Loans where the first disbursement is on or after July 1, 2013 is scheduled to increase from 3.4% to 6.8%.
For additional information you may view the full regulation in the Federal Register, on the Federal Student Aid supplemental Entrance Counseling announcement or contact the Financial Aid Office by email firstname.lastname@example.org or phone (541) 506-6021.