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How much you can borrow in student loans comes down to factors like the type of degree you're pursuing, how long you've been in school and whether a parent financially supports you. Federal loan limits are set by the government, while private loan caps vary from one lender to the next. Read on to learn how loan limits work and how to pay for school if loan funds aren't enough to cover your expenses.
Federal Student Loan Limits
What you can borrow in federal loans depends on your education level, school year and dependency status. Three types of federal student loans exist for new borrowers. Here's a breakdown of each one:
- Direct subsidized loans: Loans for undergraduate students who demonstrate a financial need. The government covers interest while you're in school.
- Direct unsubsidized loans: Loans for undergraduate and graduate or professional students that are not needs-based. Interest starts accruing when loans are disbursed, including when you're in school.
- Direct PLUS loans: Loans for graduate and professional students or parents of undergraduate students. Interest begins accruing when loans are disbursed, including when you're in school.
Out of all the federal loans, the deferred interest perk of subsidized loans makes them the most desirable—but they're also the loan type with the strictest loan limits. Below are maximum student loan amounts for undergraduate and graduate students.
Undergraduate Federal Loan Limits
Dependent undergraduate students can borrow up to $31,000 in federal loans and no more than $23,000 in subsidized loans.
Independent undergraduate students can borrow up to $57,000 in federal loans and no more than $23,000 in subsidized loans.
The government also sets the following annual limits for undergraduate students.
| Subsidized and Unsubsidized Loan Limits for Undergraduates | ||
|---|---|---|
| School Year | Dependent Students | Independent Students |
| Year 1 | $5,500 (no more than $3,500 in subsidized loans) | $9,500 (no more than $3,500 in subsidized loans) |
| Year 2 | $6,500 (no more than $4,500 in subsidized loans) | $10,500 (no more than $4,500 in subsidized loans) |
| Year 3 and higher | $7,500 (no more than $4,500 in subsidized loans) | $12,500 (no more than $5,500 in subsidized loans) |
Graduate Federal Loan Limits
Graduate and professional students can borrow up to $138,500 with no more than $65,500 in subsidized loans. Keep in mind that this loan cap is an aggregate limit that includes unpaid loans you took out in undergraduate school.
In certain cases, graduate and professional students in health fields may be able to borrow more money. And if you exhaust graduate loans available, grad PLUS loans are another option. Grad PLUS loans come with a higher interest rate and fees but are able to cover your entire cost of attendance minus other financial aid.
| Loan Limits for Graduate and Professional Students | |
|---|---|
| Subsidized Loans and Unsubsidized Loans | Grad PLUS Loans |
| $138,500 (no more than $65,500 in subsidized loans) | No limit, up to full cost of attendance minus financial aid awarded |
Private Student Loan Limits
How much you can borrow in private student loans from banks, credit unions and online lenders is based on factors like your credit, whether you're an undergraduate or graduate student and the type of degree you're obtaining.
Private lenders determine if you're eligible for student loan funding after reviewing your credit and financial situation. If you apply for student loans on your own and don't qualify for the money you need, adding a cosigner with good credit to your application could help you get more funding for school.
Aggregate loan limits for private student loans can vary but may be over $100,000. For example, Ascent is a private lender that sets a $200,000 aggregate loan limit for undergraduate students and a $400,000 limit for graduate students.
Citizens Bank has an aggregate limit of $150,000 for most graduate degrees but offers MBA and law school students up to $225,000. Health care students are limited to between $180,000 and $350,000.
How Much Should You Borrow in Student Loans?
You should borrow only what you need and an amount you feel comfortable paying back. (That's unless you have a plan to pursue student loan forgiveness.) Coming up with a college budget can help you get a picture of your expenses so you can determine the right amount to borrow. If you don't borrow enough initially, you can request a higher amount later.
How to Pay for College After Student Aid
If you have school costs that loans won't cover, here are other ways to pay for school:
- Request an aid re-evaluation. If your financial situation has changed—maybe you get fewer hours at work, or you got laid off—you could request that your school check to see if you qualify for more financial aid.
- Pay for tuition in installments. Speak with your school to see if there are tuition payment plans. Instead of paying upfront, breaking up payments into installments could be more manageable.
- Apply for scholarships. Completing essays and getting recommendations for scholarship applications can be tedious, but getting awarded cash from multiple sources could offset school costs and help you borrow less money. There are several types of scholarships you can look for, many of which are available beyond your first year.
- Work part time or full time. Having a source of regular income could help you cover housing expenses and some tuition costs. Consider exploring on-campus, off-campus and even remote employment opportunities. If you already have a job, see if your employer will help you pay for college.
- Find ways to save money. Cutting college expenses can give you more money you can put toward your college costs.
The Bottom Line
Loan caps exist to help student borrowers avoid taking on unmanageable amounts of debt for school. If you max out on direct subsidized loans and direct unsubsidized loans, you could shop around for private loans to cover the gaps or use a grad PLUS loan for graduate or professional school.
If you do decide private student loans are the way to go, Experian's comparison tool makes comparing options easier by offering personalized rate quotes and checking to see what loans you qualify for won't affect your credit score.