The Student Loan Act (SULA), also known as the 150% rule, is a regulation that imposes a limit on the amount of federal loans students can receive based on the duration of their academic program. Under SULA, students who obtained their loans on or after July 1, 2013, were only eligible for subsidized loans for a maximum of 1.5 times the length of their program.

Consequently, students pursuing a 4-year degree were restricted to receiving subsidized loans for a maximum of 6 years (equivalent to 150% of the program duration). Once this time limit was surpassed, students became ineligible for any further loan subsidies. However, they could still qualify for unsubsidized federal loans.

Nevertheless, a recent repeal of SULA has eliminated the 150% timeframe restriction for students. To fully implement the repeal, the Secretary specified that the implementation of the repeal will be effective beginning with the 2013-2014 award year, which was the first year that SULA was implemented.

Therefore a SULA eligible loan is a loan the meets the updated requirements for federal loans issued to students under the

Why was the SULA introduced?


The prevailing belief was that students were taking advantage of their privileges, leading the government to bear the burden of paying interest on student loans for an extended period. This situation resulted in substantial financial losses for the government as students failed to meet their academic obligations. Consequently, the Department of Education recognized the necessity of implementing a new system to minimize these losses and motivate students to excel in their studies.


The introduction of SULA aimed to prompt students to complete their degree programs within the designated timeframe. Failure to do so would result in the revocation of federal loan subsidy benefits. Consequently, borrowers would be required to bear the interest costs themselves, as the government would no longer provide subsidies for their loans.


As a result of the implementation of SULA, borrowers faced higher monthly payments throughout the repayment period of their loans. However, the recent repeal of SULA has relieved students from the pressure of adhering to the 150% rule. This means that students no longer have to worry about incurring interest on subsidized loans if they are unable to finish their degree within the expected timeframe.

How will the SULA repeal be rolled out

The Education Department has planned a two-phase rollout for the SULA repeal. In the initial phase, modifications will be made to the National Student Loan Data System (NSLDS) and the Common Origination and Disbursement (COD) system. These changes aim to enhance the functionality and efficiency of these platforms. The second phase will focus on implementing the necessary adjustments on other platforms, including FSA Partner Connect, studentaid.gov, and any other interfaces that contain SULA data. This comprehensive approach ensures that all relevant systems are updated to accommodate the SULA repeat effectively.

The repeal of SULA brings positive news for both students and colleges. Students who previously had outstanding lost balances and lost their interest subsidy will now have the opportunity to regain it. This is a significant relief for them as they will no longer have to worry about the potential loss of their interest subsidy. Additionally, future students will benefit from this repeal as they won’t have to make decisions based on the fear of losing their interest subsidy. This change creates a more favorable environment for students to pursue their education without financial burdens.

Colleges will also experience advantages due to the repeal of SULA. They will have fewer concerns and administrative tasks to handle, such as determining a student’s eligibility for a Direct Subsidized Loan. With the repeal in place, colleges can focus more on providing quality education and support to their students, rather than navigating complex loan eligibility criteria. This streamlined process ensures that more students can apply for financial aid without being hindered by the previously restrictive SULA policy.

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David Brown

He is a writer covering financial news and trends. He has over 7 years of experience as a finance writer. He and his team are dedicated in providing a comprehensive resource for students and parents to make choices based on accurate and latest information in the student loan space.

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