Federal and private loans are used to supplement personal and family resources, scholarships, grants, and work-study and must be repaid.
Federal Direct Loan Program
- Federal Direct Subsidized and Unsubsidized Loans (for students)
- Federal Direct PLUS Loans (for parents of dependent students)
- Federal Direct Graduate PLUS Loans
- Federal Direct Loan Entrance Counseling
- Federal Direct Loan Exit Counseling
- Perkins Loan
- Federal Direct Loan Consolidation
Subsidized Direct Loan eligibility/maximum timeframe
On July 6, 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) (Public Law 112-141) was enacted. MAP-21 added a new provision to the Direct Loan statutory requirements that limits a first-time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150% of the length of the borrower’s educational program. This is called your “maximum eligibility period.” Under certain conditions, the provision also causes first-time borrowers who have exceeded the 150% limit to lose the interest subsidy on their Direct Subsidized Loans. Only first-time borrowers on or after July 1, 2013 are subject to the new provision. Generally, a first-time borrower is one who did not have an outstanding balance of principal or interest on a Direct Loan or on a FFEL Program Loan on July 1, 2013.
For example, if you are enrolled in a 4-year bachelor’s degree program, the maximum period for which you can receive Direct Subsidized Loans is 6 years (150% of 4 years = 6 years). If you are enrolled in a 2-year associate degree program, the maximum period for which you can receive Direct Subsidized Loans is 3 years (150% of 2 years = 3 years).
Your maximum eligibility period is based on the published length of your current program. This means that your maximum eligibility period can change if you change programs. Also, if you receive Direct Subsidized Loans for one program and then change to another program, the Direct Subsidized Loans you received for the earlier program will generally count against your new maximum eligibility period.