This new rule encourages students to graduate from their program in a reasonable amount of time in an effort to reduce the total amount of loan debt incurred. Students who change majors multiple times or withdraw from classes excessively are most likely to be affected.

Generally, if you are enrolled in a 4-year bachelor’s degree program, you will have 6 years of Direct Subsidized Loan eligibility (or 150% of the program length) to graduate. This does not impact unsubsidized or parent loans.

Examples of how the calculation works:

  • If you are a full-time student and you receive the maximum Direct Subsidized Loan covering fall & spring semesters, this will count as one year.
  • If you are enrolled half-time and receive a Direct Subsidized Loan that covers fall & spring semesters, this will count as one-half of a year.
  • Only terms in which you borrow will count toward the limit.
  • If you transfer from a 2-year program to a 4-year program, your maximum eligibility changes from 3 years to 6 years.
  • If you transfer or change from a 4-year program to another 4-year program, the maximum timeframe includes years used in your previous program.

Still have questions? The Department of Education offers more information

Important: If you meet the maximum time frame and have not completed your program, you will not be eligible to borrow any additional subsidized loans and your current subsidized loan(s) will begin to accrue interest.