Time Limit on New Subsidized Stafford Loans for First-Time Borrowers
Students who are borrowing a subsidized Stafford loan for the first-time on or after July 1, 2013, will be subject to a limitation on the amount of time that they can receive the loans. The time limitation may not exceed 150 percent of the length of the borrower's educational program.
|Example of Subsidized Stafford Time Limitations for First-time Borrowers
|Bachelor Degree Program||Associate Degree Program|
|6 Year Maximum||3 Year Maximum|
|150 percent of 4 years = 6 years||150 percent of 2 years = 3 years|
First-time borrowers are defined as students who have no outstanding principal balance on a federal student loan as of July 1, 2013.
This new provision enacted by Congress applies only to first-time borrowers. Most continuing students will not be affected by the new time limit provision.
This time limit does not apply to unsubsidized Stafford or PLUS loans.