Time Limits on Direct Subsidized Loans

Is there a time limit on how long I can receive Direct Subsidized Loans?

No, if the first disbursement of your Direct Subsidized loan is on or after July 1, 2021, there is no time limitation on how long you can receive a Direct Subsidized loan.

If you were a first-time borrower on or after July 1, 2013, and before July 1, 2021, there was a limit on the maximum period of time (measured in academic years) that you could receive Direct Subsidized Loans. If this limit applied to you, you could not receive Direct Subsidized Loans for more than 150 percent of the published length of the program you were enrolled in at the time. This was called your “maximum eligibility period.” Your maximum eligibility period was generally based on the published length of your program at that time. You can usually find the published length of any previous program of study by contacting your school.

For example, if you were enrolled in a four-year bachelor’s degree program, the maximum period for which you could receive Direct Subsidized Loans was six years (150 percent of 4 years = 6 years). If you were enrolled in a two-year associate degree program, the maximum period for which you could receive Direct Subsidized Loans was three years (150 percent of 2 years = 3 years).

Can I lose eligibility for additional Direct Subsidized Loans?

No, as of July 1, 2021, you cannot lose Direct Subsidized Loan eligibility based on your continued enrollment in a program beyond the 150 percent published length of your program.

If you had lost your subsidized loan eligibility due to reaching the 150 percent time limit, your eligibility for new subsidized loans first disbursed on or after July 1, 2021 is restored.

If you were a new borrower on or after July 1, 2013 and before July 1, 2021 and received Direct Subsidized Loans for your maximum eligibility period, you were no longer eligible to receive additional Direct Subsidized Loans. However, you may have received Direct Unsubsidized Loans.

Could I ever become responsible for interest that accrues on a Direct Subsidized Loan before it enters repayment?

As of July 1, 2021, new Direct Subsidized Loans will not lose their subsidy benefits before entering repayment and during periods of deferment.

If you were a new borrower on or after July 1, 2013 and before July 1, 2021, certain types of enrollment may have caused you to become responsible for the interest that accrued on your Direct Subsidized Loans when the U.S. Department of Education usually would have paid it. This was called losing interest subsidy.
Your federal loan servicer would have notified you if you had become responsible for paying the interest on your Direct Subsidized Loans during that time period.

If your Direct Subsidized Loans had lost their subsidy benefits before July 1 ,2021 and you have a balance greater than zero on July 1, 2021, those loans will have their subsidy benefits retroactively reinstated.