Remaining Eligibility for Short-Term Academic Programs

There is a very limited set of circumstances in which a first-time borrower could lose eligibility for Direct Subsidized Loans during 2013-2014. These circumstances are limited because:


  • The 150% Direct Subsidized Loan Limit applies only to “first-time borrowers” on or after July 1, 2013
  • Borrowers cannot lose eligibility under the 150% Direct Subsidized Loan limit until they have received at least one Direct Subsidized Loan; and
  • Most academic programs are at least one year in length and would therefore have a Maximum Eligibility Period of at least 1.5 years, resulting in the earliest possible loss of Direct Subsidizes Loan eligibility being for 2014-2015.


For the above reasons, the only time a first-time borrower might not be eligible for a Direct Subsidized Loan during 2013-2014 is when the borrower has received a Direct Subsidized Loan for 2013-2014 and is being considered by a school for a second or other subsequent Direct Subsidized Loan for 2013-2014. And then only if the second or subsequent loan is for an academic program is shorter in length than 1.5 years, 10 months, or 40 weeks.


School Calculation of Remaining Eligibility

Beginning with the 2014-2015 release, the COD System will, based on information provided by schools, perform all of the required calculations to determine if the student has eligibility for additional Direct Subsidized Loans, and if so, what the student’s Remaining Eligibility Period is. However, because the 2013-2014 COD System does not include those features there are a very limited number of instances where a school will need to calculate certain borrowers’ Remaining Eligibility Periods prior to originating a Direct SubsidizedLoan. This calculation must be performed by schools only in the following limited circumstances:


  • The borrower is a first-time borrower on or after July 1, 2013;
  • The borrower previously received a Direct Subsidized Loan (at any school) that was first disbursed on or after July 1, 2013;
  • The school is considering the student for another Direct Subsidized Loan for the borrower’s enrollment in a program with a published length that is:
    • For programs measured in years, less than 1.5 years;
    • For programs measured in months, less than 10 months; or
    • For programs measured in weeks, less than 40 weeks.
  • The school plans on originating the new Direct Subsidized Loan using the 2013-2014 COD System release. To emphasize, schools need not perform this special calculation if the subsequent loan will be originated using the 2014-2015 COD System release.


Optional Excel Worksheet

To assist schools in performing the required calculations, FSA developed an interactive Excel worksheet in “protected” format. Once the school enters a limited amount of information for the borrower, the worksheet will calculate the borrower’s Maximum Eligibility Period, Subsidized Usage Periods, and Remaining Eligibility Period. The school must then determine, using the results of the worksheet, if the borrower’s Remaining Eligibility Period is sufficient for the student to receive an additional Direct Subsidized Loan, taking into account the Direct Loan origination regulations.


Most schools will not have to perform these calculations since they do not have educational programs that are shorter than 1.5 years, 40 weeks, or 10 months. For those schools that offer short-term programs, the number of students requiring calculations will be limited because most first-time borrowers enrolled in those short-term programs will not receive more than one Direct Subsidized Loan in 2013-2014.


For full details on the background for this information and 2014-2015 COD functionality access Electronic Announcement #5. This announcement also includes examples and detailed steps for using the excel worksheet that is an attachment to this announcement.


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