There are limits to how much money you can borrow with student loans. The maximum student loan per year depends on how far along you are in school and whether your loans are federal or private.
Undergraduates are limited to $12,500 annually and $57,500 in total federal student loans. Graduate students are limited to $20,500 annually and can have a total student loan debt of $138,500. (1)
The lifetime student loan limit isn’t an indication of how much you should borrow. That amount of debt could financially cripple many people for years, depending on their future income. With careful planning, it’s possible for many students to get the education they need without borrowing nearly as much as the lifetime student loan limit.
How Much Can You Get in Student Loans?
Your loan limit depends on your status as a full-time or part-time college student, whether you are a dependent or not, and how far along you are in school.
Federal Student Loan Limit
Undergraduates can borrow a maximum of $5,500 to $12,500 in Direct Subsidized and Direct Unsubsidized Loans each year. Parents can borrow through a Direct PLUS Loan to help pay for their dependent undergraduate student’s education as well.
Graduate students can borrow a maximum of $20,500 in Direct Unsubsidized Loans each year. They can also borrow through the Direct PLUS Loan program. The maximum yearly Direct PLUS Loan amount for parents and graduate students is the total cost of attendance minus any other financial aid received by the student. (2)
What Is the Maximum Student Loan Per Year?
Subsidized and unsubsidized student loans have two main limits:
Annual: how much you can borrow during each school year.
Aggregate: how much you can borrow during your time in college and graduate school.
|| Dependent undergraduate students
|| Independent graduate students
|| Graduate students
|0-29 credits/First year
||$5,500(maximum of $3,500 subsidized)
||$9,500(maximum of $3,500 subsidized)
||$6,500(maximum of $4,500 subsidized)
||$10,500(maximum of $4,500 subsidized)
|59.1 + credits/Third, fourth and fifth years
||$7,500(maximum of $5,500 subsidized)
||$12,500(maximum of $5,500 subsidized)
|Career maximum total loan amounts
||$31,000(maximum of $23,000 subsidized)
||$57,500(maximum of $23,000 subsidized)
Cost of Attendance Limits on Student Loans
On top of the annual and aggregate student loan limits, your college sets its own guidelines on how much you can borrow based on its cost of attendance.
Your college’s financial aid office estimates the total educational cost of attending the school, including expenses like tuition, fees, books, room and board, and transportation for a given enrollment period.
Private Student Loan Limit
Private student loan limits are equal to the total cost of attendance minus financial aid, including federal student loans. Many private student loan providers limit undergraduate students to
$75,000 – $120,000. Graduate students often have higher limits. These limits include federal and private student loans.
If you work with a private lender, your school will certify the amount you can borrow. They’ll work with your lender to make sure that your total financial aid, including student loans, doesn’t exceed your cost of attendance minus other aid. (3)
What’s the Difference Between Direct Subsidized Loans and Direct Unsubsidized Loans?
Undergraduate students who demonstrate financial need may be eligible for Direct Subsidized Loans. The college determines the amount you can borrow, which can’t exceed the student’s financial need.
With a Direct Subsidized Loan, the federal government pays the interest while you are enrolled in school at least half time, as well as for the first six months after you graduate or stop attending school. They also cover interest payments if you choose to postpone your payment with a loan deferral.
Borrowers who received a Direct Subsidized Loan on or after July 1, 2012, but before July 1, 2014, must pay interest that accrues during the six-month grace period after leaving school. Borrowers who choose not to make interest payments will see the interest added to their loan balance.
Direct Unsubsidized Loans are available to students, even if they can’t demonstrate financial need. The school determines the total amount of money a student can borrow, based on the total cost of attendance and other financial aid.
Students must pay the interest on a Direct Unsubsidized Loan. And interest accrues while the student is in school and during periods of deferment or forbearance, with interest added to the principal loan amount.
How Do I Apply for a Loan?
Students who want the option of taking out a student loan must submit the Free Application for Federal Student Aid (FAFSA®) form. Your college bases its financial aid offer on information in the FAFSA form, and their offer may include federal student loans. You can choose to accept the offer or deny all or part of the offer. (4)
What To Do When You Have Surpassed Your Lifetime Loan Limit
For some college students, tuition and costs associated with attending school exceed the total amount they are allowed to borrow. There are three main ways that college students can handle expenses that exceed student loan limits:
1. Keep loan limits in mind as you plan for college
Maximize your ability to get grants and scholarships, and tap savings before you take out loans. Talk with your financial aid office to identify sources of funding that you may not have previously known of. Ask about merit-based aid and institutional need aid. Find out whether you can get on a payment plan to take care of some of your tuition costs. Limiting your debt early in your college years can help you avoid reaching your lifetime loan limits before you finish school.
2. Consider PLUS loans
If it costs more to attend school than you can cover with direct subsidized loans or direct unsubsidized loans, parent PLUS loans and grad PLUS loans may help bridge the gap.
Borrowers who received loan funds on or after July 1, 2020, pay 5.3% interest, which is much higher than the 2.73% interest rate on graduate loans and the 4.3% rate on direct loans for undergraduates.
PLUS loan borrowers must have good credit, as defined by the Department of Education (DOE). Undergraduate students can’t access PLUS loans without help from their parents. Many parents may be unable or unwilling to take on debt to pay for their child’s education.
3. Shop around for private student loans or personal loans
Students who have reached federal student loan limits may get the funds they need to pay for college through private student loans that aren’t subject to federal loan limits.
Lenders may have their own rules about student loan limits, however. Private loans may work for borrowers with good credit and favorable credit history, which could be difficult for young people just starting out.
Many undergrad students will require a cosigner. Remember that cosigners are equally legally responsible for the loan. If the borrower fails to make payments on time, the cosigner’s credit could be badly damaged. If the borrower defaults on the loan, the lender can come after the cosigner for payment.
It’s also important to note that private loans don’t come with the same protections as federally-backed student loans, and there’s no option for forbearance or deferment with a private loan.
For example, deferment, forbearance and repayment options are a given with federal student loans but not necessarily with private student loans. So taking on this form of student debt carries a higher risk!
Need a Student Loan? Talk to Charter Oak!
Here at Charter Oak Federal Credit Union, we encourage current and prospective students to learn about scholarships, including Charter Oak’s annual Scholarship Program, as well as available grants before considering loans to pay for college. Talk with family members about how savings may help pay for school, as well. Before considering private student loans, use federal student loans to pay for college.
Charter Oak provides student loans in partnership with Sallie Mae®. These student loans can help both undergraduate and graduate students get the money they need to pay for school.
- Multiple repayment options
- Competitive interest rates
- No prepayment penalties
- No origination fees
It’s crucial to understand future loan payments, including how long you’ll make monthly payments and how much of your future income you’ll devote to student loan payments before considering taking out a private loan. Students should also research the earning potential of their field of study so they are prepared for the reality of how much money they’ll make after completing their education.
We all know that tuition and other education expenses can be high, so that’s why we’ve partnered with Sallie Mae to offer our members their Smart Option Student Loan program. So find out today which student loan may be right for you!
(1) Anna Helhoski, 2021, How Much Can You Get in Student Loans? Accessed October 12, 2021, [Nerdwallet.com]
(2) Federal Student Aid, 2021, How much money can I borrow in federal student loans? Accessed October 12, 2021, [Studentaid.gov]
(3) Elaine Ruben, 2021, Student Loan Borrowing Limits in 2021? Accesed October 12, 2021, [edvisors.com]
(4) Federal Student Aid, 2021, How much money can I borrow in federal student loans? Accessed October 12, 2021, [Studentaid.gov]