- Subsidized loans are awarded based on financial need as determined by the FAFSA. The U.S. Department of Education will pay the interest on the loan while you are attending school at least half-time (6 hours per semester) and during periods of deferment (postponement of loan payments).
- The Department of Education limits the maximum period of time that you can receive subsidized loans. Your maximum eligibility period is based on 150 percent of the published length of your program measured in academic years.
For example: If you are enrolled in a 4-year bachelor's degree program, the maximum time period for which you can receive a subsidized loan is 6 years (150 percent of 4 years = 6 years). If you are enrolled in a 2-year associate's degree program, the maximum period form which you can receive a subsidized loan is 3 years (150 percent of a 2 year = 3 years).
- Some decisions you make may affect your eligibility for a subsidized loan, like enrolling part-time or enrolling for longer than your maximum eligibility period.
- The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
- while you are in school at least half time,
- during a period of derment (a postponement of loan payments), and
- for the first six months after you leave school (referred to as a grace period*).
*Note: If you received a Direct Subsidized Loan that was first disbursed between July 1, 2012, and July 1, 2014, you will be responsible for Paying any interest that accrues during your grace period, the interest will be added to your principal balance.
- For periods of enrollment beginning on or after July 1, 2012, (fall 2012 and beyond), graduate and professional students are no longer eligible to receive Direct Subsidized Loans.