Loans

Maximum Eligibility Period for Federal Stafford Subsidized Loans

Maximum Eligibility Period = 150% of Your Current Program

If you are a first-time borrower as of July 1, 2013 there is a limit on the maximum period of time (measured in academic years) that you can receive Subsidized Loans.

In general, you may not receive Subsidized Loans for more than 150% of the published length of your program. This is called your "maximum eligibility period".

For example, if you are enrolled in a two-year program: 150% of 2 years = 3 years (2 x 1.5)

Visit the "Courses" web page of your program to find the published length of your program.

I Borrowed Federal Loans in the Past, Does this Policy Affect Me?

If your previous federal loans were paid off as of July 1, 2013 and you are now borrowing again, you are considered a first-time borrower and this policy applies to you.

What Happens If I Exceed the 150% Maximum Eligibility Period?

If you do not complete your program before you've reached 150% of your program length you will:

  1. not be eligible for new Subsidized Loans.

  2. lose the subsidy for past Subsidized Loans. In other words, the government will no longer pay the interest on any of your loans while you are in school. All your loans, both past and present, will be accumulating interest.

What if I Change Programs or Transfer to Another College or University?

Changing your program or transferring schools does not reset your maximum eligibility period. Loans borrowed for the previous program will count against your maximum eligibility period for your current program.

How Do I Calculate My Remaining Subsidized Loan Eligibility?

  1. Calculate the maximum eligibility period for your current program.
    • current program length x 1.5
  2. Calculate your previous usage. Don't forget to include usage for previous programs at Hawkeye and other schools.

  3. Calculate the difference between your current program maximum eligibility period and your previous usage.
    • If your current program's maximum eligibility period is larger than what you've previously used, the remainder is what you are still eligible for.

    • If your current program's maximum eligibility period is less than what you've previously used, you are no longer eligible for subsidized loans.

There are many scenarios that may apply to different students.

Example 1: Student receives 5 years of Subsidized Loans while enrolled in a 4-year program. Student COMPLETES the program and then enrolls in a 2-year program. Student only qualifies for 3 years subsidy for the 2-year program but has already used 5 years at 4-year college. Student is no longer eligible for Subsidized Loans. Student does NOT lose subsidy on previous loans because they successfully completed 4-year program.

Example 2: Student receives 5 years of Subsidized Loans while enrolled in a 4-year program. Student does NOT COMPLETE the program and then enrolls in a 2-year program. Student is no longer eligible for Subsidized Loans. Student LOSES subsidy on previous loans due to lack of completion of previous program.

Example 3: Student receives 1 year of Subsidized Loans while enrolled in a 4-year program. Student does NOT COMPLETE the program and then enrolls in a 2-year program. Student qualifies for 3 years subsidy for the 2-year program but has already used 1 at the 4-year college. Student is still eligible for 2 years Subsidized Loans. Student does NOT lose subsidy at this point.

Example 4: Student receives 3 years of Subsidized Loans while enrolled in a 2-year program. Student does NOT COMPLETE the program and then enrolls in another 2-year (or shorter) program. Student is no longer eligible for Subsidized Loans because they have used all 3 years of subsidy. Student LOSES subsidy on previous Subsidized Loans due to lack of completion of previous program.

Example 5: Student received 3 years of Subsidized Loans while enrolled in a 2-year program. Student does complete the program and then enrolls in another 2-year (or shorter) program. Student is no longer eligible for Subsidized Loans because they have used all 3 years of subsidy. Student does NOT lose subsidy on previous Subsidized Loan due to successful completion of previous program.

What will the US Department of Education be responsible for?

The US Department of Education will be responsible for:

  • Determining whether a loan applicant is a new borrower for subsidy limit purposes;
  • Tracking borrowers’ subsidized loan borrowing in greater detail;
  • Informing schools of the number of periods a borrower has received subsidized loans;
  • Informing borrowers when they exceed the eligibility limit and become responsible for accruing interest.

For More Information

For more information, sign in to Manage My Direct Loan to refer to your Entrance Loan Counseling.

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