Federal Subsidized Stafford Student Loan Borrowing Limitations

As of July 1, 2013, a first-time Federal Subsidized Student Loan borrower is no longer eligible for the Subsidized Stafford Student Loan program if he or she exceeds 150% of the published length necessary to graduate within an undergraduate degree program.

In addition, a borrower reaching the 150% limit becomes ineligible for the interest subsidy benefits on all Federal Stafford Subsidized Loans disbursed to the borrower on or after July 1, 2013.

Congress wants to encourage students to obtain undergraduate degrees within a reasonable time frame. Students who change majors multiple times or, drop classes excessively or retake classes excessively are most likely to be affected by Public Law 121-141.

Congress no longer wants to provide interest rate deferments for students taking an exceptional amount of time to obtain an undergraduate degree. The interest rate expense is now passed to the student in such cases.

Questions and Answers

I previously borrowed a subsidized loan prior to July 1, 2013. Does this rule apply to me?

No. This rule is in effect for new (first-time) Subsidized Stafford student loan borrowers who borrow on or after July 1, 2013. Students who previously borrowed a Subsidized Stafford student loan prior to July 1, 2013 are not impacted by this policy.

Will I receive less federal student loan money if I am affected by this?

It depends. What you would have previously received in the Subsidized student loan program, you may borrow in the Unsubsidized loan program. This is assuming you have not reached your lifetime Federal student loan borrowing limits. More information about lifetime Federal student loan borrowing limits can be found on the subsidized loans page.

What does 150% of the published length necessary to graduate for a degree program mean in terms of actual credit hours completed?

Associate degree programs at BRCC usually require approximately 66 credit hours for completion. 66 credit hours X 150% = 99 maximum credit hours can be taken before the 150% rule is invoked.  Certificate Degree Programs vary greatly in credits needed to graduate.  Here is one example of a certificate program.  If a student’s certificate program required 24 credits for completion then 150% of that program would be 36 credits (24 credit hours X 150%).

Can I appeal the 150% rule if I have extenuating circumstances?

No. Federal law provides no provisions to appeal this rule.


National Association of Student Financial Aid Administrators: Limiting Subsidized Loan Eligibility to 150% of Program Length