Fill - Free fillable 051613 Direct Subsidized Loan Limit150 Percent Announce1 Attach (Clarion University of Pennsylvania) PDF form

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Time Limitation on Direct Subsidized Loan Eligibility for First-

Time Borrowers on or after July 1, 2013

Maximum eligibility period to receive Direct Subsidized Loans

There is a limit on the maximum period of time (measured in academic years) that you can receive Direct

Subsidized Loans. In general, you may not receive Direct Subsidized Loans for more than 150% of the

published length of your program. This is called your “maximum eligibility period”. You can usually find

the published length of any program of study in your school’s catalog.

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.

Periods that count against your maximum eligibility period

The periods of time that count against your

maximum eligibility period are periods of

enrollment (also known as “loan periods”) for

which you received Direct Subsidized Loans.

For example, if you are a full-time student

and you receive a Direct Subsidized Loan

that covers the fall and spring semesters

(a full academic year), this will count as

one year against your maximum

eligibility period.

If you receive a Direct Subsidized Loan for a period

of enrollment that is shorter than a full academic

year, the period that counts against your maximum

usage period will generally be reduced accordingly.

For example, if you are a full-time student

and you receive a Direct Subsidized Loan

that covers the fall semester but not the

spring semester, this will count as one-

half of a year against your maximum

eligibility period.

With one exception, the amount of a Direct

Subsidized Loan you receive for a period of

enrollment does not affect how much of your

maximum eligibility period you have used. That is,

even if you receive a Direct Subsidized Loan in an

amount that is less than the full annual loan limit,

that lesser amount does not reduce the amount of

your maximum eligibility period you have used. The

one exception applies if you receive the full annual

loan limit for a loan period that does not cover the

whole academic year. In that case, the loan will

count as one year against your maximum eligibility

period regardless of your enrollment status (half-

time, three-quarter time, or full-time).

Click here to see some examples that show how your

maximum eligibility period can change if you change

programs.

Click here to see an example.

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Effect of borrowing while enrolled part-time

If you receive a Direct Subsidized Loan when you are enrolled less than full-time, the period that is

counted against your maximum eligibility period will be reduced.

For example, if you are enrolled half-time and receive a Direct Subsidized Loan for a period of

enrollment that covers a full academic year, this will count as only one-half of a year against

your maximum eligibility period.

Loss of eligibility for additional Direct Subsidized Loans and becoming responsible for

paying interest on Direct Subsidized Loans

After you have received Direct Subsidized Loans

for your maximum eligibility period, you are no

longer eligible to receive additional Direct

Subsidized Loans. However, you may continue

to receive Direct Unsubsidized Loans.

In addition, if you continue to be enrolled in any

undergraduate program after you have received

Direct Subsidized Loans for your maximum

eligibility period, we will no longer (with certain

exceptions) pay the interest that accrues on

your Direct Subsidized Loans for periods when

we would normally would have done so. The

chart below provides examples of these

circumstances.

Do I become responsible for paying the interest that accrues on my Direct Subsidized Loans

because . . .

Yes

I am no longer eligible for Direct Subsidized Loans and I stay enrolled in my current program?

I am no longer eligible for Direct Subsidized Loans, did not graduate from my prior program, and

am enrolled in an undergraduate program that is the same length or shorter than my prior

program?

I transferred into the shorter program and lost eligibility for Direct Subsidized Loans because I have

received Direct Subsidized loans for a period that equals or exceeds my new, lower maximum

eligibility period, which is based on the length of the new program?

I was no longer eligible for Direct Subsidized Loans, did not graduate from my prior program, and

am enrolled in an undergraduate program that is longer than my prior program?

I lose eligibility for Direct Subsidized Loans and immediately withdraw from my program?

I graduated from my prior program prior to or upon meeting the 150% limit, and enroll in an

undergraduate program that is the same length or shorter than my prior program?

I enroll in a graduate or professional program?

I enroll in preparatory coursework that I am required to complete to enroll in a graduate or

professional program?

I enroll in a teacher certification program (where my school does not award an academic

credential)?

Remember, your maximum eligibility period can

change if you enroll in a different program. So, if

you received Direct Subsidized Loans for your

maximum eligibility period for one program and

then enroll in a longer program, you will not

become responsible for interest that accrues on

your Direct Subsidized Loans.

If you meet any of the conditions on the prior

page, you will become responsible for the interest

that accrues on your Direct Subsidized Loans,

from the date of your enrollment after meeting

the 150% limit, during periods when we would

have normally paid the interest for you. Below is

a chart that summarizes the periods when we

normally pay the interest on your Direct

Subsidized Loans, and an explanation and what

happens after you become responsible for the

interest.

Click here to see an example.

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During what period am I responsible for paying the interest on

my Direct Subsidized Loans . . .

Before meeting the

150% limit?

After meeting the

150% limit?

While enrolled in school at least half-time

Yes

During my grace period on loans first disbursed (paid out) July

1, 2013 through June 30, 2014

Yes

During my grace period on loans first disbursed (paid out) July

1, 2014 or after

Yes

During deferment periods

Yes

During certain periods of repayment under the Income-Based

Repayment or Pay As You Earn Plan

Yes

During forbearance periods

Yes

During all other periods of repayment

Yes

If you become responsible for the interest that

accrues on your Direct Subsidized Loans, any

interest that you do not pay will be capitalized

(added to your loan principal balance) at the

end of the grace, deferment, or other periods.

Capitalized interest increases your loan

principal, increases your monthly payment

amount under most Direct Loan repayment

plans, and causes you to pay more interest over

the life of your loan.

Your federal loan servicer will notify you if you

become responsible for paying the interest on

your Direct Subsidized Loans.

Regaining eligibility for Direct Subsidized Loans

If you become ineligible for Direct Subsidized Loans because you have received Direct Subsidized Loans

for your maximum eligibility period, you may again become eligible to receive Direct Subsidized Loans if

you enroll in a new program that is longer than your previous program.

If you regain eligibility to receive additional Direct Subsidized Loans because you enrolled a program that

is longer than your prior program and you previously became responsible for paying all of the interest

that accrues on your Direct Subsidized Loans, we will pay the interest that accrues on your new loans

during the periods described in the chart above.

Click here to see an example.

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