If you have borrowed Stafford loans in in the past two years or are a new borrower you may have heard the term “150 percent” thrown around. This term refers to the time limit in which you can receive Subsidized loans.
If you are a first time borrower as of July 1, 2013 (meaning any loans as of that date or after) there is a limit to the maximum period of time- measured in academic years- that you can receive Subsidized Loans. If you only receive Unsubsidized loans or Direct PLUS loans then you can just move right along! (Unless you read this blog for fun- totally wouldn’t blame you)
Now if you do borrow Subsidized Loans then the maximum amount of time you can receive these loans is 150 percent of the published time for your program. Now you may be wondering what exactly this means. Think about it this way: if your program is scheduled to last for 4 years then the maximum amount of time you can receive Subsidized loans is 6 years. That’s four years (100%) plus two more (50%). Easy now, right?
If you are in a program that is scheduled to last two years the maximum you can receive the loans three years. (two years 100% one year 50%)
Now let’s say you started off in an associate’s degree program and decided to move up to a bachelor’s degree- that means that your eligibility would increase from three years to six years! But let’s say you move from a bachelor’s degree to an associates- your eligibility would then decrease down to three years. This means if you’ve used two years you would only have one remaining instead of four. Definitely something to consider!
It is also important to note that even if you change majors if both degrees still take the same amount of time your clock does not start over. This means if you decide to change your major in your- let’s say junior year- you would have already used upwards of three years of those six years available to you.
If you find yourself closing in on your 150% of your degree program please feel free to reach out to your counselor to discuss potential impacts! We also HIGHLY recommend checking out this great article from SALT Money for more information!!
As always reach out to us if you have questions!