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Explaining the “150 Percent” Change
The 150 percent change means students in a four-year program will be eligible for subsidized student loans for the equivalent of six years – three years for students in a two-year program. The student who reaches this limitation could continue to receive unsubsidized Stafford loans if he or she is otherwise eligible (for example, has not run afoul of the school’s satisfactory academic progress requirements).
Once a borrower has reached the 150 percent limitation, his or her eligibility for an interest subsidy also ends for all outstanding subsidized loans that were disbursed on or after July 1, 2013. At that point, interest on those previously borrowed loans would begin to accrue and would be payable in the same manner as interest on unsubsidized loans.
The new limitation is prospective in nature, affecting new borrowers on or after July 1, 2013 (i.e., presumably borrows who do not have any outstanding federal student loans as of that date). Since only periods for which the student received subsidized loans appear to count, the 150 percent limit would likely include periods of borrowing that began on or after July 1, 2013. The bill also addresses transfer students. For borrowers who were enrolled in more than one educational program that began on or after July 1, 2013, the limitation would be calculated by taking the difference between 150 percent of the published program length of the longest educational program in which the borrower was enrolled and any periods of enrollment in which the borrower received a subsidized Stafford loan.
The legislation mandates that the Department of Education issue regulations on how to determine the aggregate period of eligibility for less than full-time students, students enrolled in preparatory coursework necessary for enrollment in a program leading towards a degree, and students enrolled in a teacher certification program who are not also regular students at the institution. Such regulations are exempt from negotiated rulemaking and not subject to Master Calendar provisions.