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Repeal of the 150% Subsidized Usage Limit

Since July 1, 2013, Direct Loan statutory requirements have limited a first-time borrower’s eligibility for Direct Subsidized Loans to a period not to exceed 150% of the length of the borrower’s educational program. In addition, under certain conditions, the requirements have caused first-time borrowers who have met or exceeded the 150% limit to lose the interest subsidy on their Direct Subsidized Loans. The FAFSA Simplification Act, part of the Consolidated Appropriations Act, 2021, provides for a repeal of the 150% Subsidized Usage Limit Applies (SULA) requirements.

Please see below the important components of the repeal:

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

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