SULA –  Subsidized Usage Period – New Q & A Part 1

SULA DIRECT SUBSIDIZED LOAN LIMIT FREQUENTLY ASKED QUESTIONS UPDATE

Understanding the requirements for calculating awards under SULA can be as brain-racking as the calculations themselves. Fortunately, ED provides fairly regular updates to its 150% Direct Subsidized Loan Limit Frequently Asked Questions. In March, ED provided guidance on a several topics which I’ve summarized for you below.

 Subsidized Usage Period

SUP-Q16: A school cancelled all disbursements of a Direct Subsidized Loan by reducing the disbursement amounts to zero. However, the Common Origination and Disbursement (COD) System is still calculating a subsidized usage period. Why?

SUP-A16: 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.