Monday, October 15, 2012

New Subsidized Loan Rules

On July 6, 2012, President Obama signed Public Law 112-141, which includes some new restrictions on Direct Subsidized loans. Specifically, this deals with the insterest subsidies on the Subsidized loans for new borrowers on or after July 1, 2013.

Any new borrower on or after this date will no longer be eligible for a new Direct Subsidized loan if they are past the 150% of their program length. Most Satisfactory Academic Progress policies state that you must complete the program within 150% of the program length (so if your program length is 2 years, then you must complete in 3 years). If you're fulltime, then the length will be different than if you're halftime all the way through. However, the 150% is typically the same. On the other hand, you may go beyond that 150% in some schools if you are on an academic plan from a Financial Aid Warning. Not every school does that the same, and some schools this new rule will not affect.

The new rule also has language that says that the borrower will no longer be eligible for interest subsidy benefits on all Subsidized loans first disbursed on or after July 1, 2013, who have reached that 150% threshhold.

If you want to read the Dept of Ed's electronic announcement, click here.

1 comment:

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