150% Direct Subsidized Loan Limit Frequently Asked Questions

These Frequently Asked Questions provide information and operational guidance on implementation and the repeal of the 150% limit. Schools must review the regulations as published in the Federal Register on Jan. 17, 2014, and on June 14, 2021, and associated guidance to ensure that they are in compliance with all of the 150% limit requirements.

The listing of Frequently Asked Questions will be updated periodically and include  the date of the update. New and/or updated questions and answers will be marked  NEW.

The questions below are grouped by the follow categories:

- Repeal of SULA [R-]

- First-Time Borrowers [FTB]

- Maximum Eligibility Period [MEP]

- Subsidized Usage Period [SUP]

- Remaining Eligibility Period [REP]

- Loss Of Eligibility [ELIG]

- Interest Subsidy [INT]

- Preparatory Coursework [PREP]

- Teacher Certification [TEACH]

- Notifications [NTF]

- Other [OTH]

- Academic Year And Loan Period Reporting [AYLP]

A first-time borrower is an individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2013, or on the date the borrower obtains a Direct Loan after July 1, 2013.

SULA Repeal Update: Any individual that has been identified as a “first-time borrower” prior to July 1, 2021, will continue to be identified as a “first time borrower.” Any individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2021, or on the date the borrower obtains a Direct Loan with an earliest disbursement date (EDD) on after July 1, 2021, will not be identified as a “first-time borrower”. [July 9, 2021]

A first-time borrower is any individual who has no outstanding balance of a Direct Loan or a FFEL loan on July 1, 2013 or on the date the borrower obtains a Direct Loan after July 1, 2013. This includes receipt of PLUS Loans. Therefore, if the parent had fully repaid the PLUS loan before July 1, 2013, or when the parent obtains a first Direct Loan after that date, the parent would be a first-time borrower. However, receipt by the parent of a PLUS loan would not impact whether the student for whom the parent receives the PLUS loan is or is not a first-time borrower.

SULA Repeal Update: Any individual that has been identified as a “first-time borrower” prior to July 1, 2021, will continue to be identified as a “first time borrower.” Any individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2021, or on the date the borrower obtains a Direct Loan with an earliest disbursement date (EDD) on after July 1, 2021, will not be identified as a “first-time borrower”.

The Common Origination and Disbursement (COD) System, which will identify first-time borrowers, will not so identify borrowers who only receive Direct PLUS Loans. While such borrowers could be first-time borrowers, the COD System will not flag them as such unless they receive a Direct Subsidized or Unsubsidized Loan. [July 9, 2021]

Receipt of a TEACH Grant does not affect whether the student is a first-time borrower. However, the conversion of a TEACH Grant to a Direct Unsubsidized Loan may result in the recipient becoming a first-time borrower, depending on when the conversion occurs.

If the TEACH Grant was converted to a Direct Unsubsidized Loan before July 1, 2013, and it had not been repaid, the student would have had an outstanding Direct Loan balance on July 1, 2013, and therefore, would not be a first-time borrower.

Consider a TEACH Grant recipient who did not have an outstanding Direct Loan or FFEL loan balance on July 1, 2013. If the TEACH Grant is converted to a Direct Unsubsidized Loan on or after July 1, 2013, the student would be a first-time borrower and subject to the 150% limit.

SULA Repeal Update: Any individual that has been identified as a “first-time borrower” prior to July 1, 2021, will continue to be identified as a “first time borrower.” Any individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2021, or on the date the borrower obtains a Direct Loan with an earliest disbursement date (EDD) on after July 1, 2021, will not be identified as a “first-time borrower”. [July 9, 2021]

The fact that a borrower has consolidated all or some of his or her Direct Loans or FFEL loans does not affect the determination of whether the borrower is a first-time borrower. The loans that the borrower consolidated determine whether the borrower is a first time borrower. A borrower who has outstanding Direct Loans and/or FFEL loans on July 1, 2013, is not considered to be a first-time borrower. This does not change if the borrower later consolidates those loans into a Direct Consolidation Loan after July 1, 2013. If the borrower only has an outstanding balance on a Direct or FFEL Consolidation Loan made before July 1, 2013, the borrower is not a first time borrower.

SULA Repeal Update: Any individual that has been identified as a “first-time borrower” prior to July 1, 2021, will continue to be identified as a “first time borrower.” Any individual who has no outstanding balance on a Direct Loan or on a FFEL Program loan on July 1, 2021, or on the date the borrower obtains a Direct Loan with an earliest disbursement date (EDD) on after July 1, 2021, will not be identified as a “first-time borrower”. [July 9, 2021]

The school must contact the COD School Relations team to have the Department reevaluate whether the individual is a first-time borrower. The team can be reached by email at CODSupport@ed.gov or by phone at 1-800-848-0978. [July 13, 2015]

A borrower’s Maximum Eligibility Period is a period of time that is equal to 150% of the published length of the student’s academic program. The Department will calculate a borrower’s Maximum Eligibility Period using information that is provided by the borrower's school to the Common Origination and Disbursement (COD) System and to the National Student Loan Data System (NSLDS). [December 20, 2013]

If the borrower receives a loan to cover enrollment in more than one academic program at the same school, the borrower’s Maximum Eligibility Period will be calculated based on the published length of the longest program.

When submitting the origination record for the borrower’s Direct Loan to the COD System, the school should only report program information associated with the borrower’s longest program.

When reporting enrollment information to NSLDS, the school must report separate enrollments for each of the borrower’s programs. [December 20, 2013]

If the student is enrolled in separate programs that are of the same length, the school can choose which program’s information to report to COD. When reporting enrollment information to NSLDS the school must report separate enrollments for each of the borrower’s programs. [December 20, 2013]

If the student began attendance in one program and then transfers to another program there is no need to immediately update the program length that was previously reported to the COD System or NSLDS. Instead, the school would report the new program length to COD if and when it makes the next disbursement of the loan and to NSLDS when it submits its next enrollment reporting. If, because of the student’s enrollment in the shorter program, the student is no longer eligible for Direct Subsidized Loans, the school should cancel subsequent disbursements of the loan and update the loan period of the loan to only cover the payment period(s) for which the borrower will now be receiving the loan.

If the student never began attendance in the first program before enrolling in the other program, and the school submitted its COD origination record or NSLDS enrollment reporting with information concerning the first program, then the student’s eligibility for the loan and for interest subsidy was based on a program in which the student never actually began attendance. For such a student, the school must update the COD origination record with information on the student’s actual program within 15 days of becoming aware that the student never began attendance in the program. The school must also update its prior reporting (if any) of the student’s enrollment in the prior program in NSLDS. [December 20, 2013]

Consistent with longstanding guidance related to when students in such programs transition from undergraduate status to graduate/professional status (see, e.g., 2012-2013 FSA Handbook, Volume 1, Page 67 and Volume 3, Page 96), the school should report program information, including credential level and program length for the portion of the program when the student is considered to be an undergraduate student and, therefore, eligible for the Direct Subsidized Loan.

For example, if the school offers a five-year BA/MA program, and the school treats the borrower as an undergraduate student during the first three years of the program, the school must report the length of the program as three for the periods of enrollment during which the student is considered an undergraduate. Similarly, the school must report the program’s credential level to the COD System as a bachelor’s degree program for any loan originated for the student’s enrollment in the program as an undergraduate student. For NSLDS, the school must report the program as a bachelor’s degree program for the duration of the student’s enrollment in the program as an undergraduate student.

After the student becomes a graduate/professional student, the program length and credential levels reported for Direct Loans originated for the student’s enrollment in the program and NSLDS enrollment reporting must correspond to the graduate/professional portion of the program. In the example of the five-year BA/MA program, for which the school treats the student as being an undergraduate student for only the first three years of the program, the graduate component of the program should have a program length of two years reported to the COD System and NSLDS. [December 20, 2013]

The Department will convert published program lengths that are reported in weeks or months to years. As part of the Direct Loan origination record, schools will report the length of the program’s Title IV academic year in weeks of instructional time (see 34 CFR 668.3). To convert the lengths of such programs into years, the Department will divide the number of days in the program’s length by the number of days in the program’s Title IV academic year. If the program is measured in weeks, the Department will use the first formula, below; if the program is measured in months, the Department will use the second formula, below. [December 20, 2013]

Length of Program =

Length of Program Formula
(Weeks in Length of Program x 7)
÷
(Weeks in Program's Title IV Academic Year x 7 )

Length of Program =

Length of Program Formula 2
(Months in Length of Program x 30)
÷
(Weeks in Program's Title IV Academic Year x 7 )

The Department's regulations require each school to have established a normal time for completion for each of its academic programs. 34 CFR 668.41(a) defines normal time as "the amount of time necessary for a student to complete all requirements for a degree or certificate according to the school's catalog". The definition goes on to say, "This is typically four years for a bachelor's degree . . . two years for an associate degree . . . and the various scheduled times for certificate programs". Therefore, a school must have established a program's published length in time (years, months, or weeks), not just in credit or clock hours to comply with 34 CFR 668.41(d)(4) and 668.45 and must report that published length in time to COD and NSLDS.

  • If the school has published, in its catalog, on its website, or in any promotional materials, the length of the program in weeks, months, or years, the program length to be reported to COD and NSLDS must be the same as the program length that the school has published. Note: For gainful employment programs, the school must have published the program's length in weeks, months, or years on the school's website.

  • If the school has not published a program length and the program is an associate or bachelor's degree program, the program length to be reported should be 2 years or 4 years, respectively, unless the academic design of the program makes it longer or shorter than the typical, 2-year associate degree program or 4-year bachelor's degree program.

  • For all other programs for which the school has not published a program length, the program length is based on the school's determination of how long, in weeks, months, or years, the program is designed for a full-time student to complete.

For more information, see 150% EA #17. [July 13, 2015]

Schools should set the length of a program based on the amount of time in years, months, or weeks it would take a full-time student to complete the program.

See MEP9 for additional information. [December 20, 2013]

These “tracks” are two different programs. The length for the first program is the normal time it takes full-time students to complete the program. The length for the second program is the normal time it takes part-time students (for whom the second program is specifically designed) to complete the program.

If the school chooses to create two programs in this way, each student must be enrolled in one or the other program and not in both. Moreover, while it is permissible for a student who is enrolled in one of the programs to take occasional coursework in the other, the school must report the borrower as being in the program in which the borrower is taking the most of his or her courses. [December 20, 2013]

Published length must be a fixed period. The school must determine how long it normally takes a full-time student to complete the program, and report that length to the COD System and NSLDS. [December 20, 2013]

To be eligible for Title IV aid, a student must be a "regular student". Under 34 CFR 600.2, a regular student is one who is enrolled in a Title IV-eligible program for the purposes of receiving a degree, certificate, or other credential awarded by the school. Therefore, to be eligible for Title IV aid, a student whose major may be "undeclared" or "undecided" must still be enrolled in a program that leads to a degree, certificate, or other credential. Schools must report to the COD System and to NSLDS the program length associated with the program in which the student is enrolled.

In addition to program length, schools are also required to report a CIP code for the student's program of study. For students who have not yet declared a major, schools may report using the CIP code 24.0102 (General Studies). CIP Code 24.0102 is not a valid CIP Code for gainful employment programs because such programs are not considered as leading to "gainful employment" for purposes of those regulations. [July 13, 2015]

If the borrower requests a loan to cover enrollment at more than one school—one loan per school—a Maximum Eligibility Period is calculated separately for each of the academic programs associated with the loan at each of the schools. COD will then compare the separate Maximum Eligibility Periods against the student's total Subsidized Usage Period, including the new loans, to determine whether the borrower has eligibility for each Direct Subsidized Loan.

For example, if a borrower is simultaneously enrolled in a 1-year certificate program at School A (with a Maximum Eligibility Period of 1.5 years) and a 4-year bachelor's degree program at School B (with a Maximum Eligibility Period of 6 years), COD will evaluate the borrower's eligibility for the Direct Subsidized Loan originated by School A against the Maximum Eligibility Period of 1.5 years and will evaluate the borrower's eligibility for the Direct Subsidized Loan originated by School B against the Maximum Eligibility Period of 6 years. If, the borrower already has a Subsidized Usage Period of 3 years, COD will reject the origination record for the Direct Subsidized Loan at School A, and will accept the origination record for the Direct Subsidized Loan at School B.

While a student may receive loans for simultaneous enrollment at more than one school, the schools must coordinate so that non-direct expenses (room and board, personal expenses, etc.) are not duplicated in the respective cost of attendances and that the borrower's loans do not exceed annual loan limits.

SULA Repeal Update: Loans with an earliest disbursement date on or after July 1, 2021, will not impact the 150% borrowing limitation and will not be considered when COD determines if a borrower has exceeded his or her limitation for loan eligibility. [July 9, 2021]

No. As stated in the answer to MEP1, a borrower's Maximum Eligibility Period is a period of time that is equal to 150% of the published length of the student's academic program, and therefore is not affected by a borrower's advanced standing in the program. And, as noted in MEP7, if the school does not have a published program length, the program length that the school reports to COD and to NSLDS should correspond to the period of time it would normally take a full-time student to complete all of the program's coursework. [July 13, 2015]

Except for the two exceptions discussed below, no. The program length that a school reports to COD and NSLDS should correspond to the academic program in which the student is enrolled. Prerequisite coursework that is a condition of admission, but is not coursework the student must take to complete the program, is not part of the program, and must not be included in determining the program's length.

The two exceptions are for bachelor's degree completion programs (see MEP15) and for special admission associate degree programs (see MEP16). [July 13, 2015]

The program length for these programs should be reported as four years.

These programs—"bachelor's degree completion programs"—are typically shorter than conventional bachelor's degree programs and often consist of only the final two years of coursework because they only admit students who have completed an associate degree or at least two years of postsecondary coursework. Such programs have a Maximum Eligibility Period that is based on the entire period of postsecondary education typically necessary for the student to receive the bachelor's degree. As noted in 150% EA #8, schools should report a Program Length of 4 years and a Special Program Indicator of "B" to COD and NSLDS for such programs even if the program offered by the school is shorter than 4 years. This program length of 4 years is designed to afford students sufficient additional eligibility to complete the program, accounting for the earlier coursework and any previously received Direct Subsidized Loans.

Similarly, bachelor's degree completion programs that require for admission more than two years of postsecondary coursework, such as a prior bachelor's degree, also qualify for the exception and must be reported with a Program Length of 4 years and a Special Program Indicator of "B" to COD and NSLDS.

Note that if a program admits some students who have an associate degree or at least two years of postsecondary coursework into a bachelor's degree program, but does not explicitly require the prior degree or coursework for admission to the program, the program is not considered a bachelor's degree completion program and must be reported using its actual program length. [July 13, 2015]

If the program qualifies as a "special admission associate degree program", it should be reported as having a Program Length of 4 years.

A special admission associate degree program is a program that meets all of the following criteria:

  • Admits only students who have completed an associate degree or at least two years of postsecondary coursework;

  • Admits students on a competitive basis by using, for example, grades, test scores, or letters of recommendation, etc. (i.e., is not an "open admission" program); and

  • Prepares students to enter occupations that require state licensure.

These programs have a Maximum Eligibility Period that is not based on the actual length of the associate degree program, which is typically two years, but on the entire period of postsecondary education typically necessary to qualify for licensure. Schools should report a Program Length of 4 years for such programs and a Special Program Indicator of "A" to COD and NSLDS. The longer reported program length is designed to afford students sufficient additional eligibility to complete the program, accounting for the coursework and any previously received Direct Subsidized Loans.

Special admission associate degree programs that require more than two years of postsecondary coursework for admission into the program, such as a prior bachelor's degree, also qualify for the exception. A school should report a Program Length of 4 years for such programs and a Special Program Indicator of "A" to COD and NSLDS.

As noted in MEP15, if a program admits some students that already have an associate degree or at least two years of postsecondary coursework, but does not explicitly require the prior degree or coursework for admission to the program, the program is not considered an associate degree completion program and must be reported using its actual program length. [July 13, 2015]

A borrower’s Subsidized Usage Period is the period of time, expressed in years or portions of years, for which the first-time borrower received a Direct Subsidized Loan. The total of a borrower’s Subsidized Usage Periods is compared to the borrower’s Maximum Eligibility Period to determine if the borrower is eligible for additional Direct Subsidized Loans.

SULA Repeal Update: The Department will not calculate a Subsidized Usage Period for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, loans without a Subsidized Usage Period cannot be compared to a Maximum Eligibility Period. [July 9, 2021]

The Department will prorate the loan period for each loan so overlapping periods are counted only once.

SULA Repeal Update: The Department will not consider loans with an earliest disbursement date on or after July 1, 2021, when identifying overlapping periods. [July 9, 2021]

Whether updating is necessary depends on when the borrower withdrew from school and the result of the Return of Title IV Aid (R2T4) calculation. Withdrawals and other circumstances in which the borrower’s loan period may need to be updated, along with examples, are described in DCL GEN 13-13. In general, updating is required if the result of the R2T4 calculation is that all of the loan funds for a payment period will be returned. [December 20, 2013]

Schools must include, in the Direct Loan origination record, the borrower’s enrollment status (COD tag <EnrollmentStatus>) as it is on the day the school makes the initial disbursement of the loan for the payment period (COD tag <PaymentPeriodBeginDate>).

If the school submits the origination record to COD before the loan’s first disbursement, the school should submit the student’s expected enrollment status. That enrollment status must be updated if it is different on the day of the initial disbursement of the loan for the payment period. Schools should not report subsequent changes to the borrower’s enrollment status within the payment period. For the next payment period, schools must report the student’s enrollment status as of the date the school makes the initial disbursement of the loan for the next payment period. [December 20, 2013]

Because the academic year that schools report and that is associated with the Subsidized Usage Period calculation is based on annual loan limit progression, how a summer term will be treated for the purpose of calculating Subsidized Usage Periods will depend on whether the school tracks annual loan limits using a Scheduled Academic Year or a Borrower-Based Academic Year.

To ensure that Subsidized Usage Periods are calculated accurately, schools must report loan periods and the program’s academic year to the COD System consistent with the requirements outlined in DCL GEN 13-13. That letter includes a comprehensive discussion, with examples, of how summer loans impact reporting. In general, updating of the academic year is required when a student receives a Direct Loan for a summer that was not initially included in the school origination record.

For schools that track annual loan limits using a Scheduled Academic Year, it is very important that schools only include a summer term in a Direct Loan’s academic year if: (1) the student actually is receiving loan funds for the summer; or (2) the summer term is a “required” term at the school.

SULA Repeal Update: The Department will not calculate a Subsidized Usage Period for loans with an earliest disbursement date on or after July 1, 2021, regardless of the academic year associated to the loan. [July 9, 2021]

Until schools begin reporting enrollment status to the COD System for Direct Loans made for the 2014-2015 year, the Department will use the enrollment status reported by schools to NSLDS to adjust borrowers’ Subsidized Usage Periods in the COD System if that enrollment status is not full-time. Because NSLDS does not currently include an enrollment status of three-quarter-time, borrowers with an NSLDS reported enrollment status of at least half time, but less than full-time will have their Subsidized Usage Periods prorated based on half-time enrollment. See 150% Direct Subsidized Loan Limit: Electronic Announcement #3 for more information. [December 20, 2013]

The period of the leave of absence or the period during which the student was not enrolled is included in the Subsidized Usage Period. This is because the school is required to extend the loan period and academic year to account for the increased amount of time it will take the borrower to complete the program (the loan period) and the increased period of time to which the annual loan limit applies (the academic year). Because both the loan period and the academic year will be extended, including the leave of absence period and the period during which the student was not enrolled in the Subsidized Usage Period will have a negligible impact on the borrower’s Subsidized Usage Period.

If the borrower does not return from a leave of absence, the period of the leave of absence will not be included in the Subsidized Usage Period, because the school would be required to update the loan period to end on the last day of the last payment period for which the borrower received a Direct Subsidized Loan. [December 20, 2013]

No. Consistent with the existing treatment of such borrowers in non-term and clock hour programs in other contexts, we will not prorate borrowers' Subsidized Usage Period based on the student's less-than-full-time enrollment. Schools must not, for Direct Loan records submitted to COD, report the enrollment status for a borrower in such a program as being anything other than full time.

If a program has a half-time "track" or most borrowers take half the expected clock hours per week, it is likely that each "track" is actually a separate program (see MEP8). To ensure that borrowers are able to borrow Direct Subsidized Loans for the appropriate period of time, schools must accurately publish and report to the COD System and to NSLDS the actual length of their programs (see MEP7, MEP8, and MEP10 for more information). [July 13, 2015]

No. If the school fully cancels a loan, there is no Subsidized Usage Period. Subsidized usage periods are only calculated if the amount of the loan is greater than zero. [December 20, 2013]

It depends on when such funds would be returned. Under the regulations, a return of loan funds that results in a reduction of the loan amount can only occur within 120 days of the date when the proceeds were disbursed or beyond 120 days to meet a statutory or regulatory requirement. Therefore, regardless of when a school returns the R2T4 required portion of the loan, that return will reduce the amount of the loan. However, additional funds returned to preserve the student’s loan eligibility will only be treated as a reduction on the loan amount if the funds are returned within 120 days following disbursement.

Note: Before a school may return Direct Subsidized Loan funds that are not required by law or regulation, it must receive the borrower’s permission. And, the school may not assess the borrower a fee or require the borrower to pay the school for any institutional charges that were paid, but as a result of the return are now unpaid. [December 20, 2013]

If a student wishes to return disbursed loan funds to preserve loan eligibility, he or she must do so within 120 days of the loan’s disbursement and must do so by returning the funds to the school and requesting that the school return the funds (using normal COD System and G5 processes). Any voluntary return after 120 days should not be made through the school. Instead the borrower should make a pre-payment on the loan by sending money to their federal loan servicer. Such a pre-payment will have no effect on the borrower’s Subsidized Usage Period calculation. [December 20, 2013]

No. Repaying a loan in full or consolidating the loan has no effect on a borrower’s Subsidized Usage Period.

For example, if a borrower had a Subsidized Usage Period of 3 years, entered repayment, repaid all previously received Direct Subsidized Loans, and then returned to school, the borrower would still have a Subsidized Usage Period of 3 years. [December 20, 2013]

No. Only the full annual loan limit amount specified in the HEA will cause the annual loan limit exception to apply. [December 20, 2013]

Yes. Subsidized Usage Periods are rounded up or down to the nearest tenth of a year. For example, a borrower with an unrounded Subsidized Usage Period of 0.44 years would have a rounded Subsidized Usage Period of 0.4 years, and a borrower with an unrounded Subsidized Usage Period of 0.45 years would have a rounded Subsidized Usage Period of 0.5 years. Rounding a Subsidized Usage Period is always the last step in the calculation. [July 13, 2015]

Yes, both exceptions would apply. In such cases, the annual loan limit exception which sets the Subsidized Usage Period to one year when the loan amount equals the appropriate annual loan limit even when the loan period is less than the academic year would be applied first. Then the resulting Subsidized Usage Period would be prorated based on the student's part-time enrollment status. For example, if a second-year student receives a fall-only Direct Subsidized Loan of $4,500 (the full annual loan limit), the student's initial Subsidized Usage Period would be one year. However, if the student is enrolled half-time for that fall semester, the Subsidized Usage Period would be prorated to 0.5 years.

Note: The annual loan limit exception only applies where the student receives a loan for the full annual loan limit expressly provided for in statute—$3,500, $4,500, or $5,500. It does not apply in cases where the student borrows up to his or her documented financial need that is less than the annual loan limit or when the annual loan limit is prorated based on the student's enrollment for a final period of study that is less than an academic year. [July 13, 2015]

To completely eliminate a subsidized usage period on a Direct Subsidized Loan, schools must fully inactivate the loan by reducing the award amount to zero, not just the disbursement amount to zero.

SULA Repeal Update: The Department expects that schools will continue to fully inactivate loans by reducing the award amount to zero after the SULA Repeal. [July 9, 2021]

A borrower loses eligibility for additional Direct Subsidized Loans when the borrower has a Remaining Eligibility Period of zero (or less).

SULA Repeal Update: The Department will not calculate Subsidized Usage Periods for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, those loans will not be used when determining a borrower’s Remaining Eligibility Period. [July 9, 2021]

Yes. In this situation, the student is effectively ineligible for a Direct Subsidized Loan. Therefore, the school could award the student a Direct Unsubsidized Loan for the full amount of the student’s eligibility – the base amount plus the appropriate additional Direct Unsubsidized Loan amount. This is similar to the circumstance in which a student has reached his or her maximum aggregate subsidized loan eligibility and therefore is eligible for only Direct Unsubsidized Loans.

SULA Repeal Update: The Department will not calculate Subsidized Usage Periods for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, the borrower might be eligible for the Direct Subsidized Loan if the earliest disbursement date is on or after July 1, 2021. [July 9, 2021]

A borrower in the circumstance described in this question cannot receive a Direct Subsidized Loan in the amount of the full annual loan limit, because it would cause the borrower to have a Subsidized Usage Period of one year, which is greater than their Remaining Eligibility Period. The COD System would reject a Direct Loan origination record for the borrower in this circumstance. However, this does not mean that the borrower cannot receive any Direct Subsidized Loans. This is similar to the circumstance in which a student has approached his or her maximum aggregate subsidized loan eligibility is not eligible for the full, subsidized loan amount. The borrower could receive a Direct Subsidized Loan that is less than the Direct Subsidized Loan annual loan limit for a loan period that is less than a full academic year.

For example, a third-year dependent student has a Remaining Eligibility Period of 0.5 years and is enrolled in a semester-based program. The borrower has an EFC and COA that would support the awarding of a Direct Subsidized Loan of $5,500 and a Direct Unsubsidized Loan of $2,000.

Although the borrower has a Remaining Eligibility Period of 0.5 years (corresponding to a single semester in this example), the borrower cannot receive a Direct Subsidized Loan in the amount of $5,500 for a loan period covering one semester because receiving the full amount of the subsidized annual loan limit for a period that is less than an academic year would cause the Subsidized Usage Period to be one year, which is greater than the borrower’s Remaining Eligibility Period. For the same reason, the borrower may not receive a Direct Subsidized Loan (in any amount) for a loan period covering the full academic year, because that would also result in a Subsidized Usage Period equal to one.

SULA Repeal Update: The Department will not calculate Subsidized Usage Periods for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, the borrower might be eligible for the Direct Subsidized Loan if the earliest disbursement date is on or after July 1, 2021. [July 9, 2021]

No. Under section 484(b) of the HEA and 34 CFR 685.301(a)(7), a borrower must first receive the total amount of the borrower's Direct Subsidized Loan eligibility for the loan period before the borrower may receive a Direct Unsubsidized Loan for the same loan period, unless the borrower has less than $200 of Direct Subsidized Loan eligibility. For more information on this topic, refer to Volume 3, page 142 of the 2015–2016 FSA Handbook.

Sometimes students do not accept all of the Direct Subsidized Loan funds offered to them but accept the Direct Unsubsidized Loan funds offered to them. To ensure compliance with the provisions prioritizing origination and disbursement of Direct Subsidized Loan funds prior to Direct Unsubsidized Loan funds, schools are not required to receive active confirmation from borrowers before reallocating the student's aid package so that the student receives his or her maximum Direct Subsidized Loan eligibility but must notify the student that the final aid package is different from the aid package that the student accepted.

For borrowers with a Remaining Eligibility Period for Direct Subsidized Loans of less than one year, COD will reject a loan origination in the amount of the full (not prorated) annual loan limit. In such cases, schools may originate a loan for an amount that is less than the annual loan limit and then originate a Direct Unsubsidized Loan in an amount up to the limit of the borrower's eligibility.

SULA Repeal Update: The Department will not calculate Subsidized Usage Periods for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, COD will only reject loan originations or disbursements in this scenario for exceeding a borrower’s Remaining Eligibility Period if the earliest disbursement date is before July 1, 2021. [July 9, 2021]

No. A student with a remaining eligibility period of 0.5 years or less may be able to receive a Direct Subsidized Loan. and must be considered for the loan. At standard-term-based schools, a single-term loan would often have a Subsidized Usage Period of less than 0.5 years. Moreover, factors such as enrollment status also play a role in calculating Subsidized Usage Periods. Please see 150% Electronic Announcement #20 for more information and the subsidized usage calculator on the Common Origination and Disbursement (COD) System’s website, which can assist schools which are attempting to ascertain whether COD would accept a loan record based on the 150% limit.

SULA Repeal Update: The Department will not calculate Subsidized Usage Periods for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, the borrower might be eligible for the Direct Subsidized Loan if the earliest disbursement date is on or after July 1, 2021, regardless of the borrower’s Remaining Eligibility Period. [July 9, 2021]

No. If a borrower reaches his or her Maximum Eligibility Period, the borrower loses eligibility for Direct Subsidized Loans (and may also lose interest subsidy, depending on subsequent enrollment).

Note that the opposite is also true. A borrower who has reached the subsidized aggregate loan limit has no remaining eligibility for Direct Subsidized Loans, even if the borrower has remaining subsidized eligibility under the 150% limit. Such a borrower may still be eligible for Direct Unsubsidized Loans.

SULA Repeal Update: The Department will not calculate Subsidized Usage Periods for loans with an earliest disbursement date on or after July 1, 2021. Accordingly, the borrower might be eligible for the Direct Subsidized Loan if the earliest disbursement date is on or after July 1, 2021, and the borrower has remaining eligibility under the Direct Subsidized Loan aggregate loan limit. [July 9, 2021]

Maybe. If the school can either properly make the loan for a shorter period of time or, in some circumstances, if the school can reduce the amount of the loan, COD may accept it. Please see 150% Electronic Announcement #20 for more information.

SULA Repeal Update: COD will retire Edit 206 for loans with an earliest disbursement date on or after July 1, 2021. Edit 206 will continue to apply, when appropriate, to loans with an earliest disbursement date before July 1, 2021. [July 9, 2021]

No. Generally, the 150% limit calculates a student’s eligibility based on the period of time for which a student is receiving a Direct Subsidized Loan, not the amount of that loan. While the amount of the loan will matter in some circumstances, simply prorating the loan amount by the amount of the student’s remaining eligibility period is improper. Please see 150% Electronic Announcement #20 for more information.

SULA Repeal Update: COD will retire Edit 206 for loans with an earliest disbursement date on or after July 1, 2021. Edit 206 will continue to apply, when appropriate, to loans with an earliest disbursement date before July 1, 2021. [July 9, 2021]

The new school should contact the former school to request that the loan information be corrected. If the former school is unresponsive or closed, the new school should submit a Subsidized Usage Inquiry on the Common Origination and Disbursement (COD) System’s website. [March 27, 2017]

Schools must report program-specific enrollment to NSLDS. If the enrollment dates of the shorter program are either the same as, or completely within, the enrollment dates of the longer program, the determination of whether the borrower loses interest subsidy will be based on the length of the longer program.

SULA Repeal Update: NSLDS will cease to calculate Loss of Subsidy for any Direct Subsidized Loan on July 1, 2021. The federal loan servicers, with the help of NSLDS, will reinstate subsidy benefits to any Direct Subsidized Loan with a balance greater than zero on July 1, 2021. If a Direct Subsidized Loan has a zero balance that is effective or before July 1, 2021, then the Direct Subsidized Loan will not have its subsidy benefits reinstated as it is no longer outstanding. [July 9, 2021]

For a full discussion of how a school should determine a student's enrollment status, please see Dear Colleague Letter GEN-14-17. [July 13, 2015]

A student's "Program Begin Date" is the beginning date of the first payment period of the student's first enrollment in the program. The "Program Begin Date" does not "reset" if the student withdraws and later re-enrolls in the program. NSLDS will use the Program Begin Date as part of its analysis to determine if and as of what date a borrower should lose interest subsidy.

SULA Repeal Update: NSLDS will cease to calculate Loss of Subsidy for any Direct Subsidized Loan on July 1, 2021; however, the guidance for reporting Program Begin Date do not change. [July 9, 2021]

A school must report a student's enrollment to NSLDS for all academic programs in which the student is enrolled at the school, regardless of whether the student receives Title IV aid for attendance in the program, Title IV aid is offered to those enrolled in the program, or the program is a Title IV "eligible program".

If a student is not enrolled in any program (see OTH7 for the definition of a program), the school would not report the student's program-level enrollment to NSLDS. In this case, the school should set the "Program Indicator" in the NSLDS enrollment reporting file layout to "N", which allows NSLDS to accept the campus-level enrollment without a program-level enrollment reporting record. [July 13, 2015]

All schools that participate in the Title IV programs, both domestic and foreign, undergraduate and graduate, are required to report, in addition to campus-level enrollment information, program-level enrollment to NSLDS.

Schools that do not participate in the Title IV programs, but which are considered "eligible institutions" for the purpose of allowing students to receive an in-school deferment on a prior loan must not report program-level enrollment status to NSLDS. Such schools should provide campus-level enrollment information to NSLDS and setting the "Program Indicator" in the NSLDS enrollment reporting file layout to "N". [July 13, 2015]

Not on the loans that had lost interest subsidy. Once a loan loses interest subsidy, it does so permanently. However, if otherwise eligible, the student may receive additional Direct Subsidized Loans.

For example, consider a student who was enrolled in a 4-year bachelor’s degree program and had a subsidized usage period of 3 years, withdraws from the 4-year program, and then enrolls in a 1-year undergraduate certificate program. The student is not only ineligible for Direct Subsidized Loans in the 1-year program, but also loses interest subsidy on all of the outstanding Direct Subsidized Loans taken for attendance in the 4-year program. If this student later re-enrolls in the same or another 4-year program, the student may borrow subsidized loans for up to 3 more years. However, the loans from the first 3 years of study in the 4-year program do not regain interest subsidy. Any additional loans borrowed upon re-enrollment in the 4-year program will have interest subsidy unless the student’s enrollment again triggers the loss of interest subsidy.

SULA Repeal Update: NSLDS will cease to calculate Loss of Subsidy for any Direct Subsidized Loan on July 1, 2021. The federal loan servicers, with the help of NSLDS, will reinstate subsidy benefits to any Direct Subsidized Loan with a balance greater than zero on July 1, 2021. If a Direct Subsidized Loan has a zero balance that is effective or before July 1, 2021, then the Direct Subsidized Loan will not have its subsidy benefits reinstated as it is no longer outstanding. [July 9, 2021]

Yes. On the National Student Loan Data System’s Professional Access site, schools may view the date that the student’s loans lost subsidy by navigating to the enrollment tab and then selecting the subsidized usage button. [March 27, 2017]

No. Schools are not required to report program length for preparatory coursework necessary for enrollment in a graduate or professional program. The COD System, when evaluating the borrower’s Direct Subsidized Loan eligibility under the 150% limit, will determine the program length of the program for which the borrower most recently received a Direct Subsidized Loan. In instances where the borrower received a Direct Subsidized Loan before program-level information was collected in the COD System or the borrower has never received a Direct Subsidized Loan, the COD System will determine the program length to be 12-months, which is the maximum period of eligibility for Direct Loans received for preparatory coursework.

Note that his does not apply to loans originated for a student’s enrollment in preparatory coursework necessary for enrollment in an undergraduate program. Such enrollment will be treated just like any undergraduate academic program, requiring schools to report information about the program that the student is taking the preparatory coursework to enter. [December 20, 2013]

For both COD and NSLDS, the school must report the CIP Code and program length associated with the program that the student is taking the coursework to enter, a credential level of “99”, and a special program indicator of “U”.

In the case of a student who is taking the preparatory coursework at one school for enrollment in a program at another school, the school at which the student is taking the preparatory coursework must report the CIP Code and program length of the program at the other school regardless of whether the school offers a program with the same CIP Code or program length.

For example, a student who is taking preparatory coursework at a community college to enter a bachelor’s degree program in engineering would likely report a program length of 4 years even if the community college does not offer any 4-year programs and would report a CIP Code that corresponds to engineering even if the community college does not offer any engineering programs. [October 19, 2015]

For COD, the school must report the CIP Code associated with the program that the student is taking the coursework to enter, a credential level of “99”, a special program indicator of “P”, and the number of weeks of instructional time in the school’s Title IV academic year.

For NSLDS, the school must report the CIP Code and program length associated with the program that the student is taking the coursework to enter, a credential level of “99”, and a special program indicator of “P”.

In the case of a student who is taking the preparatory coursework at one school for enrollment in a program at another school, the school at which the student is taking the preparatory coursework must report the CIP Code and, to NSLDS only, program length of the program at the other school regardless of whether the school offers a program with the same CIP Code or program length.

For example, a student who is taking preparatory coursework at a 4-year university to enter a graduate medical program would likely report a CIP Code that corresponds to medicine even if the 4-year university does not offer any medical programs. [October 19, 2015]

Yes, the same rules apply to these borrowers. Note that the Subsidized Usage Periods, if any, from prior teacher certification programs (but not from enrollment in other programs) will count against a borrower’s Maximum Eligibility Period when the borrower enrolls in a second or recertification teacher certification program. [December 20, 2013]

For COD and NSLDS, the school must report the CIP Code and program length associated with the program, a credential level of “99”, and a special program indicator of “T”.

If the school confers a credential for completing the teacher preparation program, such as a post-baccalaureate certificate or a graduate or professional certificate, the school should report the credential level associated with the credential the school confers (not a credential level of “99”) and should not report a special program indicator of “T”. [October 19, 2015]

The Department will provide this information to borrowers through the COD System disclosure statements that are provided to the borrower. The notice will include the borrower’s Subsidized Usage Period associated with the loan that is the subject of the disclosure, the total of the borrower’s Subsidized Usage Periods (including for the loan that is the subject of the disclosure), and the borrower’s Remaining Eligibility Period for enrollment in the borrower’s current program.

SULA Repeal Update: The Department will continue to provide this information to borrowers when applicable. [July 9, 2021]

Both SARs and ISIRs will provide information on whether the student is (or will be if a Direct Loan is received) a first-time borrower who is subject to the 150% limit. The ISIR will also include the sum of the borrower’s Subsidized Usage Periods to date and indicate whether the borrower has become responsible for accruing interest on any Direct Subsidized Loans because of reaching the 150% limit. The Department will not provide information about the student’s Maximum Eligibility Period or Remaining Eligibility Periods on the SAR or ISIR because the 150% limit is based on the length of the borrower’s educational program, and it is not possible at the time that SARs and ISIRs are produced to know which program the borrower will attend.

For the 2013–14 release, the COD System sent a warning edit to schools when the school originated or disbursed a Direct Loan to a first-time borrower who is subject to the 150% limit. The COD System continued sending this warning edit to schools until the 2014–15 release of COD, at which point schools used information they received on ISIRs.

SULA Repeal Update: The Department will continue to provide this information on the SAR and ISIR when applicable. [July 9, 2021]

Yes. The borrower’s federal loan servicer will inform the borrower if the borrower’s Direct Subsidized Loans have lost interest subsidy. In addition, this information will be available to schools and students in NSLDS. [December 20, 2013]

Because all other eligibility requirements continue to apply to a first-time borrower seeking Direct Subsidized Loans, satisfactory academic progress requirements, including the 150% maximum time frame, continues to apply. Satisfactory academic progress evaluations and the 150% limit apply separately to borrowers. Thus, a student who has failed satisfactory academic progress may not receive any additional Title IV aid, regardless of whether the student has remaining Direct Subsidized Loan under the provisions of the 150% limit. [December 20, 2013]

All other borrower eligibility requirements continue to apply to first-time borrowers. This means, for example, that a borrower who has reached the subsidized aggregate loan limit is not eligible to receive any additional Direct Subsidized Loans, even if the borrower has remaining subsidized eligibility under the 150% limit.

The reverse is also true. A borrower who has reached the 150% limit for subsidized loans cannot receive any additional Direct Subsidized Loans, even if he or she has remaining eligibility under the subsidized annual or aggregate loan limit. The 150% limit and other borrower eligibility rules apply independently, and a borrower’s eligibility for Direct Subsidized Loans may be limited either by the 150% rule or by one or more other borrower eligibility requirements. See ELIG1 for more information. [December 20, 2013]

No. Neither students nor schools can appeal or challenge the application of the 150% limit. However, if there is a reporting error that causes a borrower to lose eligibility for or interest subsidy on Direct Subsidized Loans, the Department will work to correct such errors. Such a correction, depending on a borrower’s circumstances, may result in a reinstatement of Direct Subsidized Loan eligibility and/or eligibility for interest subsidy or eligibility for Direct Subsidized Loans. [December 20, 2013]

Direct Subsidized Loans received for enrollment in remedial coursework, as distinguished from preparatory coursework, is treated the same as any other undergraduate coursework. [December 20, 2013]

A post-baccalaureate certificate program is a program that, while designed for students who have at least a bachelor's degree, has been classified by the school as an undergraduate rather than a graduate/professional level program (Credential Level 4).

A certificate program that is designed for students who do not have a bachelor's degree is not a post-baccalaureate certificate program. Instead, the program is considered an undergraduate diploma/certificate program (Credential Level 1).

A graduate/professional certificate program is a program that is designed for students who have completed at least a bachelor's degree and has been classified by the school as a graduate/professional program (Credential Level 8). [July 13, 2015]

The school should report a credential level of 99 (non-credential programs) for this program. The school should also report a "Special Program Indicator" value of "N" (not applicable) for the program. [July 13, 2015]

For purposes of the 150% limit, and the attendant reporting requirements to COD and NSLDS, a program is defined as the unique combination of the school's OPEID and the program's CIP Code, credential level, and program length.

To be considered a "program", the coursework must generally lead to a degree, certificate, or other credential awarded by the school. For the purposes of the 150% limit, the only time that coursework that does not lead to a degree, certificate, or other credential is when the student is enrolled in preparatory coursework or teacher certification coursework under 34 CFR 668.32(a)(1)(ii)-(iii), in a "transfer program" under 34 CFR 668.8(c)(2), or in a comprehensive transition and postsecondary program for students with intellectual disabilities under 34 CFR 668.231.

See DCL GEN-14-17 for more information about how this definition impacts reporting to NSLDS.

Note: the definition of a program is different for other purposes, such as for the gainful employment regulations. [July 13, 2015]

Only a payment period during which a student has received and kept Direct Loan funds should be included in a loan period. If a student did not receive Direct Loan funds for a payment period, for example, a semester, then the payment period must not be included in the loan period. [December 20, 2013]

The academic year that schools report with Direct Loan originations is the period to which the annual loan limit applies.

For standard-term programs and non-standard-term programs that have terms that are substantially equal to each other and are each at least nine weeks in length, the dates that schools report must coincide with the calendar period of the school’s Scheduled Academic Year or Borrower-Based Academic Year, whichever it is using to track annual loan limits for the student. Therefore, an academic year that is reported as only one term is never correct.

For non-term programs and non-standard-term programs that have terms that are not substantially equal to each other and are not each at least nine weeks in length, the dates that schools report must coincide with the calendar period that it would take the student to complete both the number of weeks of instructional time and credit or clock hours in the school’s academic year (that it defined under 34 CFR 668.3). [December 20, 2013]

Schools that do not require attendance in the summer term may not include the dates of the summer term in the Direct Loan’s academic year unless the student is attending the summer term and receiving a Direct Loan for that term. [December 20, 2013]

No. There are circumstances in which different loan types would have different loan periods or academic years. For example, if a school uses a scheduled academic year consisting of fall and spring semesters, with the summer term treated as a trailer to the scheduled academic year, and the student receives all Direct Subsidized Loan eligibility for fall and spring, does not receive all Direct Unsubsidized Loan eligibility for the fall and spring semesters, and then attends the summer term and requests a loan, the Direct Subsidized Loan would have a loan period and academic year consisting of the fall and spring semesters, and the Direct Unsubsidized Loan(s) would have loan period(s) and academic year(s) spanning the fall, spring, and summer terms. [December 20, 2013]

Yes. It is not only permissible, but required. Unlike a school that does not require attendance in the summer term as part of its scheduled academic year, if the summer term is required, the dates of the summer term must be included in the academic year reported to the COD System. [December 20, 2013]

Yes. The school must include the summer term because it is part of the borrower-based academic year. For schools that offer programs in a scheduled academic year, the number of terms in a borrower-based academic year equals the number of terms in the school’s scheduled academic year (note that in counting the number of terms in the scheduled academic year, a summer header or trailer is not included). A borrower-based academic year must begin with a term in which the student is enrolled (but not necessarily receiving a loan), and consists of any two consecutive terms (at a school that uses semesters) or any three consecutive terms (at a school that uses quarters or trimesters).

For example, in a semester-based program with a scheduled academic year consisting of the fall and spring semesters, a borrower-based academic year would consist of any two consecutive terms. If a student begins attendance in the spring semester, the borrower-based academic year would include the spring and summer terms. The school would include the summer term when reporting the academic year dates because the summer term is part of the borrower-based academic year. [December 20, 2013]

Loan periods are the periods of enrollment for which a loan is intended. The minimum period for which the school can originate a Direct Loan for this type of program is the lesser of the length of the program or an academic year. Because this program is less than one academic year (it is not at least 26 weeks of instructional time and 900 clock hours), the loan period is the length of the program. As a result, the loan period will start on the date that the student begins enrollment in the program—January 6, 2014—end when the student is scheduled to complete the program—18 weeks after January 6, 2014. If there are no breaks following the student’s start of the program that would cause instructional time to be different from calendar time, the loan period would end on or about May 16, 2014.

The academic year that the school must report is the period to which the annual loan limit applies. Because all clock hour programs track annual loan limits using a borrower-based academic year (BBAY), the academic year will start on the date that the student begins enrollment in the program—January 6, 2014. For clock hour programs, the annual loan limit applies to the BBAY period during which a student would complete the number of weeks of instructional time and clock hours associated with the school’s academic year definition under 34 CFR 668.3. For this program, that period is the time it would take a student to complete 26 weeks of instructional time or 900 clock hours, whichever is later. If there are no breaks following the student’s start of the program that would cause instructional time to be different from calendar time, the student would complete 26 weeks of instructional time on July 11, 2014, and would complete 900 clock hours on August 8, 2014 (900 clock hours divided by 30 clock hours per week is 30 weeks). Because August 8, 2014 is later than July 11, 2014, the BBAY for annual loan limit purposes ends on the later of the two dates, and the academic year end date for this student is on or about August 8, 2014. [December 20, 2013]

Consistent with guidance in the 2012-2013 FSA Handbook, Volume 3, Pages 112-115, the answer depends on whether the student is transferring into a term-based program or into a non-term-based program.

If the student is transferring into a standard-term program or a non-standard term program where each term is substantially equal to the other and are each at least nine weeks in length, the school would originate a Direct Loan with academic year dates that correspond to the new school’s scheduled or borrower-based academic year.

If the student is transferring into a non-term-based program (both credit-hour and clock-hour programs) or non-standard-term programs where each term is not substantially equal to the other and are not each at least nine weeks in length, the academic year depends on whether the new school accepts credits/clock-hours from the prior school.

If the school does accept credits/clock-hours from the prior school, the start date and end date of the academic year are the start date and end date of the academic year at the prior school. Information on prior loans’ academic years is available in COD.

If the school does not accept credits/clock-hours from the prior program, the start date of the academic year is the start date of the academic year at the prior school and the end date of the academic year is the end date of the borrower-based academic year at the new school.

Note that the Loans II final regulation (published on November 1, 2013) modified the applicable regulatory provision that governs this rule. The new rule will require all non-term and non-standard-term programs to provide the treatment to all borrowers that may only currently be provided to borrowers for whom the new institution accepts transfer credits from the prior institution. This new regulatory provision is one that the Department has designated for early implementation, at the discretion of each institution. For more information, please see 78 FR 65768, 65773, 65839. [December 20, 2013]

The school should include the leave of absence in the loan period and academic year that it reports. If the student does not return from the leave of absence, the school must update the Direct Loan origination record’s loan period so that it corresponds to the end date of the last payment period for which the borrower received (and retained) a Direct Loan (see SUP7). [December 20, 2013]

Schools must update reported loan periods and academic years, as with any other adjustment to an origination record, within 15 days of the date that the school became aware of the need to make an adjustment.

For non-term or clock hour programs or non-standard-term programs whose terms are not substantially equal to each other and are not each at least nine weeks in length, whose loan periods and academic years may need to be updated to account for students’ progression through the program, schools may delay reporting updates to loan periods and academic years until the student completes the period of enrollment for which the loan is intended or when the student withdraws.

Note that the Return to Title IV (R2T4) rules provide 45 days from the date of the student’s withdrawal to perform the R2T4 calculation. If a school is required to update a loan period because the R2T4 calculation requires the return of all loan funds received for a payment period, the school would not become aware of the need to update the loan period until the R2T4 calculation has been completed. Therefore, when an R2T4 is required, the school must update the loan period in COD within 15 days of having completed the R2T4 calculation. [December 20, 2013]

If the school knows in advance that the student will not attend the middle term in a quarter- or trimester-based program, it should handle the reporting consistent with example 6, option 1 in DCL GEN 13-13. That is, the school would originate two separate loans, one with a loan period covering the dates of the first term and a second loan with a loan period covering the dates of the third term. Both loans would have academic years that cover the full scheduled academic year at the school—that is, all three quarters or trimesters.

If the school originated one loan for all three terms because it did not know in advance that the student would not be attending the middle term, it must update the origination record for that loan consistent with example 2 in DCL GEN 13-13. That is, since the original loan record likely would have had a loan period that covered all three terms, the school would update the loan period dates to reflect that the student was only enrolled for the first term. If the student returns for the third term and is eligible for a loan, the school would originate a separate Direct Loan with a loan period covering that term only. Both loans would have academic years that cover the full scheduled academic year at the school—that is, all three quarters or trimesters. [December 20, 2013]

No. If the loan is totally cancelled/inactivated, the school is not required to update the loan period or academic year because cancelled/inactivated loans do not have associated Subsidized Usage Periods. However, schools should be sure to reduce the loan amount(s) and all disbursement amounts to $0. If in the future the school activates the loan by increasing the loan amount from zero, it must ensure that loan period and academic year are updated. [July 13, 2015]