Mapping Your Future: Department implements early repeal of subsidized loan limitations


Department implements early repeal of subsidized loan limitations

By Catherine Mueller

June 22, 2021

In a move that simultaneously lifted a financial burden on students and a regulatory burden on financial aid professionals, the Department of Education announced early implementation of the repeal of subsidized loan limitations.

As a part of the Consolidated Appropriations Act, 2021, Congress required the Department of Education to implement the repeal by July 1, 2023.

In a June 14 Final Rule published in the Federal Register, the Secretary of Education removed "the subsidized usage loan limit restriction (SULA) for any borrower who receives a Federal Direct Stafford Subsidized Loan first disbursed on or after July 1, 2021, regardless of the award year associated with the loan."

In addition, as stated in the rule, "all subsidy benefits will be reinstated retroactively to the date on which the loss of subsidy was applied for all Federal Direct Stafford Subsidized Loans with an outstanding balance on July 2, 2021, and for all award years since the 2013-2014 award year."

In a June 11 Electronic Announcement, the Department provides guidance and operational information related to the SULA repeal. According to the Federal Register Announcement, the Department estimates that approximately 354,000 loans with a total of $1.2 billion in disbursements were subject to the subsidized usage limitation. Of these, approximately 316,350 loans with an outstanding balance of $1.1 billion are eligible for reinstatement of subsidy benefits.

Mapping Your Future will be updating its online counseling sessions to remove information about SULA.