ED’s Electronic Announcements (EAs) on IFAP: 150% DIRECT SUBSIDIZED LOAN LIMIT
EA – Posted January 17, 2014 – (General). 150% Direct Subsidized Loan Limit: Electronic Announcement #8 – Final Regulations Published
This announcement alerts the financial aid community of the publication of the final regulations related to the 150% Direct Subsidized Loan Limit. These final regulations published on January 17, 2014 replace the interim final regulations provided last May 16, 2013. A number of important changes were made in these final regulations of which schools should be cognizant. First, in the prior interim regulations a Direct Subsidized Loan borrower’s calculated Subsidized Usage Period (SUP) was required to be rounded down to the nearest quarter of a year in all situations. However, under these new final regulations a SUP will be rounded up or down, as appropriate, to the nearest tenth of a year.
The second area in which changes were made in these final regulations pertained to the annual loan limit exception and the part-time enrollment status exception for determining the SUPs. Under the interim regulations, if a student was considered to have met the exception based upon having borrowed the annual loan limit in one semester or payment period, then the fact that the student may also have been enrolled part-time did not affect the student’s calculated SUP. Under the final regulations, in a scenario where the student may have borrowed the full annual limit in one payment period (e.g., semester) and the student was enrolled part-time (e.g., half-time or three-quarter time), the student’s SUP will now take into consideration that the student met both exceptions. For example, a student who was enrolled only half-time in a standard term program, but borrowed the full annual loan limit in one semester would be considered to have a SUP of 0.5 years. (One full SUP due to receiving the full annual loan limit in one semester multiplied by 0.5 due to half-time enrollment status equals a SUP of 0.5 years.)
The next two changes in the final regulations from what was in the interim regulations are applicable to special programs and relate to the Maximum Eligibility Period (MEP). Specifically, in a bachelor’s degree completion program (e.g., a program designed to require an associate degree or successful completion of two years of undergraduate postsecondary work for admission to the baccalaureate degree program), even though their program’s published length is two years (the final two years of coursework necessary to receive a bachelor’s degree), the MEP for such a program is now considered to be 6 years. This is the same as any other typical bachelor’s degree program. The other programs affected by this final regulation change in regard to the MEP are “special admission associate degree programs.” Such special admission programs require at least two years of prior undergraduate postsecondary work for admission, admits only on a competitive basis (class rank, grade point average, etc.), and provides the academic qualifications for licensure by the State. Such special admission associate degree programs now are considered to have an MEP of 6 years based upon the final regulations rather than 3 years.