What is the maximum student loan amount that you can borrow?

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April 14, 2020

When it comes to borrowing for college, federal student loans should generally be your first stop. But you can only borrow a limited amount, since the federal government has a maximum student loan amount of $ 31,000 for dependent undergraduates and $ 138,500 for graduate students.

Here’s what to know about the federal student aid limits and what to do if you hit that limit.

What is the maximum student loan amount?

Federal student loan limits are based on several factors:

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  • Type of schooling: undergraduate or graduate
  • Student status: dependent or independent
  • Annual vs aggregate: per year vs per life

This chart from the Pennsylvania State University Student Aid Office details the limits based on your situation:

Undergraduate student dependentDependent undergraduate student with a parent PLUS loan refusalIndependent undergraduate studentGraduate student or professional graduate
First year (0-29 credits)$ 5,500. A maximum of $ 3,500 can be subsidized.$ 9,500. A maximum of $ 3,500 can be subsidized.$ 9,500. A maximum of $ 3,500 can be subsidized.$ 20,500
Second year (29.1-59 credits)$ 6,500. A maximum of $ 4,500 can be subsidized.$ 10,500. A maximum of $ 4,500 can be subsidized.$ 10,500. A maximum of $ 4,500 can be subsidized.$ 20,500
Third, fourth and fifth years (59.1+ credits)$ 7,500. A maximum of $ 5,500 can be subsidized.$ 12,500. A maximum of $ 5,500 can be subsidized.$ 12,500. A maximum of $ 5,500 can be subsidized.$ 20,500
Maximum total loan amount$ 31,000. A maximum of $ 23,000 can be subsidized.$ 57,500. A maximum of $ 23,000 can be subsidized.$ 57,500. A maximum of $ 23,000 can be subsidized.$ 138,500. The graduate debt limit includes direct loans received for undergraduate studies.

In addition to these student loan limits, there are two other limits to be aware of:

  • You cannot exceed the cost of attending your school; in other words, you can’t take out more loans than you actually need.
  • You can only receive direct subsidized loans for your maximum eligibility period, which is “150% of the published duration of your program” – for example, six years for a four-year bachelor’s degree or three years for a bachelor’s degree. ‘two-year partner.

What to do if you reach the maximum student loan amount

If you’ve borrowed your maximum student loan amount, or are getting close to it, here are four steps you can take:

1. Talk to your financial aid office
2. Get off part-time
3. Tap into your emergency or retirement savings
4. Think about private student loans

1. Talk to your financial aid office

The federal government is not the only place that offers help; states and colleges also have programs.

So talk to your financial aid office and ask if there is anything they can do. Maybe he can offer help based on need or merit or recommend a local scholarship program. They may also be able to help you find help in your state.

2. Get off part-time

If you find out that you are on the verge of reaching the maximum student loan amount, reducing your course load will lower your costs and give you time to work while attending school. By doing so, you will hopefully be able to cover your tuition costs without taking on additional loans.

As for federal loans you’ve already taken out? If you are enrolled in part-time classes, your loans will remain deferred, which means you won’t need to repay them.

If they are subsidized loans, the government will cover the interest. But if these are unsubsidized loans, you may want to start making minimum payments to avoid increased interest charges.

3. Tap into your emergency or retirement savings

While it is never ideal to spend your savings, sometimes it is necessary. If you have an emergency fund, you can use some of that money to cover tuition costs. Just be sure to replace what you took out.

If you’ve been in the workforce for a while, you can use your retirement savings to pay for your education costs. For example, if you have had a Roth IRA open for more than five years, you can withdraw contributions for your education without penalty and without tax.

Think long and hard before you do this, however. The best thing to do with retirement investments is to let them sit and grow.

4. Think about private student loans

A final option to consider is the private student loan. Since they are not offered by the federal government, they are not subject to traditional student loan limits.

You can get private student loans from a variety of lenders, including large traditional banks and small online start-ups.

Although these loans have fewer restrictions than federal loans, their interest rates are higher. And you’ll probably need a co-signer (unless, of course, you’ve been in the workforce before and established your own credit).

Before taking out additional loans, make sure you understand the terms and how much you will end up paying in the long term. (You can use our student loan repayment calculator to calculate the numbers.)

Taking an additional $ 30,000 at an interest rate of 9.00%, for example, will result in monthly payments of $ 380 upon graduation and a total of $ 15,603 in interest over 10 years. Add that to the federal loans you already have, and you could be overwhelmed with debt when you graduate.

If you’ve reached the maximum student loan amount, don’t panic. Take a few deep breaths and think carefully about your options.

And remember: whatever you take out you will have to pay it back.

Rebecca Safier contributed to this report.


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