Federal Pupil Mortgage Limits: The way to Pay for Faculty When You Max Out

Federal pupil loans are a preferred approach to pay for faculty since they provide low-interest charges and versatile reimbursement phrases. Nevertheless, the Division of Training units pupil mortgage limits, limiting how a lot you possibly can borrow per yr and in complete all through your total academic profession.

When you’ve reached the combination pupil mortgage restrict (or the complete quantity you possibly can borrow for undergraduate and graduate research), you’ll have to discover different avenues. These can embrace completely different mortgage sources and even interesting your monetary help award.

Let’s take a more in-depth have a look at the utmost pupil mortgage quantity and what to do when you’ve reached it.

Federal pupil mortgage limits

If you happen to’re a university pupil or the mum or dad of 1, you need to be conscious of the Division of Training’s federal pupil mortgage limits. Finally, these borrowing restrictions might have an effect on how you plan to pay for college.

There are two types of federal student loan limits:

Subsidized and Unsubsidized Loan limits

The federal government provides Direct Subsidized and Unsubsidized Loans for undergraduate, graduate and professional students.

Here’s how the two loans differ:

  • Subsidized Loans: These are available to undergraduate students who demonstrate financial need. The government covers accrued interest while you’re attending school or during periods of deferment.
  • Unsubsidized Loans: Not based on financial need, these loans are available to undergraduate, as well as graduate and professional students. The student is responsible for all interest, including fees charged while in school or during most types of deferment.

You can only borrow up to a predetermined amount with both loan types. As noted, the annual limit is what you’re allowed per year, while the aggregate limit is the total federal student debt you can incur for all your studies at any level.

Furthermore, annual federal student loan limits are determined by your year in school and current dependency status. You can check out the details below, however right here’s an summary on this chart:

Dependent Undergraduate Pupil Unbiased Undergraduate Pupil* Graduate and Skilled Diploma Pupil
First Yr
(0 – 29 credit)
$5,500 complete (sponsored loans capped at $3,500) $9,500 (sponsored loans capped at $3,500) $20,500 (unsubsidized solely)
Second Yr
(29.1– 59 credit)
$6,500 (sponsored loans capped at $4,500) $10,500 (sponsored loans capped at $4,500) $20,500 (unsubsidized solely)
Third yr and past
(59.1+ credit)
$7,500 (sponsored capped at $5,500) $12,500 (sponsored capped at $5,500) $20,500 (unsubsidized solely)
Most Mortgage Quantities
(for total academic profession)
$31,000 (sponsored loans capped at $23,000) $57,500 (sponsored loans capped at $23,000)

$138,500 (sponsored loans capped at $65,500)

The graduate debt restrict consists of Direct loans acquired for undergraduate research.

*These limits can also apply to dependent college students whose dad and mom are denied a mum or dad PLUS mortgage.

PLUS Mortgage limits

The federal authorities additionally gives grad PLUS Loans for graduate and professional students, as well as parent PLUS Loans for parents of dependent undergraduates.

While there are no set limits for PLUS Loans, you can’t borrow more per year than your school’s cost of attendance, minus any additional aid you or your child will receive.

In general, it’s best to exhaust your subsidized and unsubsidized options before considering PLUS Loans since PLUS Loans have higher interest rates.

How your federal student loan limit is determined

As discussed, federal student loans are an excellent choice for financing your college career. However, your financial aid package might not offer enough to cover your school-related expenses.

Your federal student loan allowance is based on multiple factors, including information reported on your Free Application for Federal Financial Aid (FAFSA), as well as additional sources of funding, such as grants, scholarships and private student loans.

Here are the main factors that may determine your federal student loan limit, including some of those mentioned in the table above:

  • Dependency status: Generally, undergraduates are considered dependent students, meaning your parents’ income and assets will be used to calculate your Expected Family Contribution (EFC). However, graduate and professional students are considered independent students, resulting in larger borrowing limits.
  • Year in school: Your loan limit increases with each year of attendance, regardless of whether you’re a dependent or independent student. However, grad student limits remain the same each year (apart from grad PLUS Loans).
  • Marital status: Your FAFSA loans will likely change if you’re married and filing jointly. This is because your spouse’s income will influence your EFC.
  • Enrollment status: Loan amounts will vary based on whether you’re a full- or part-time student. The good news is that you can still receive financial aid as a part-time student.
  • Cost of attendance: Your college’s financial aid office estimates the total education cost of attending school, including expenses like tuition, fees, books, room and board and transportation. Your student loan limit (up to the federal maximum) is the cost of attendance minus any federal grants, scholarships, work-study and other student aid.

Knowing your cost of attendance is an integral part of understanding your student loan limits. Many colleges publish this information on their websites, but you also can contact your college’s financial aid office to request it.

Calculate how much money you’ll need

Knowing your student loan limits can help you decide which types of student loans to pursue. But instead of asking, “How much student loans can I get?” consider how much you need.

The answer varies for each individual. Depending on your school’s tuition, room and board, books and living costs, your college expenses could differ wildly from someone else’s. Try using the College Board’s tool to calculate how a lot school will value. Or you possibly can ask your most popular faculties about their internet value calculators.

You too can borrow much less when you obtain grants, scholarships and different pupil help that doesn’t should be repaid.

If you happen to’re uncertain in regards to the greenback quantity you need to be spending on school annually, have a look at our information on how a lot pupil mortgage debt is an excessive amount of.

Discovering further funds for faculty

Some college students may face prices that go above and past the usual federal pupil mortgage limits.

For instance, a first-year pupil may have to borrow $7,000 to cowl a yr’s tuition and charges — $1,500 above the undergraduate pupil mortgage restrict. Or a university senior who needs to study abroad might not have enough left in their aggregate limit to fund the program.

Here are four ways to handle college costs beyond the federal student loan limit:

1. Apply for multiple funding options

Identify all your sources for college funding, such as a 529 college savings account, work-study programs, grants or scholarships — before loans.

Doing so will reduce your student debt while keeping you within federal student loan limits.

In addition, you can ask friends and family to contribute toward your college goals. Try launching a GoFundMe campaign, or receive monetary gifts via the Gift of College or UGift.

2. Appeal for more aid

If the loan amounts outlined in your financial aid award letter won’t cover your anticipated costs, you should contact your college’s financial aid office to discuss options.

For instance, a university might offer additional institutional need- or merit-based aid. Students or families can also inquire about payment plans for tuition.

Lastly, you can file a needs-based appeal if you’re experiencing financial hardship. This is determined on a case-by-case basis, but it’s worth applying if you think your case merits review.

3. Consider borrowing PLUS Loans

If your cost of attendance is higher than Direct Subsidized Loan or Direct Unsubsidized Loan limits, PLUS Loans can help fill the gap.

However, there are a couple of drawbacks to PLUS Loans:

  • Higher interest rate: For loans disbursed on or after July 1, 2022, borrowers face a 7.54{61c2d3aff5dd861f6d765374843566b764152cba6ae7a0e0dca1c7933b41ddbb} rate, higher than the 6.54{61c2d3aff5dd861f6d765374843566b764152cba6ae7a0e0dca1c7933b41ddbb} rate on direct loans for graduate loans and the 4.99{61c2d3aff5dd861f6d765374843566b764152cba6ae7a0e0dca1c7933b41ddbb} rate on direct loans for undergraduates.
  • Credit requirements: Borrowers can’t have adverse credit (as defined by the Department of Education) if they want to access PLUS Loans.

While graduate students and parents of college students have the option to borrow PLUS Loans, undergraduate students don’t. They must rely on parents, who might be unwilling or ineligible to borrow PLUS Loans.

4. Shop around for private student loans

When students are up against federal student loan limits, they have another option: private student loans. These loans aren’t subject to the federal loan limits outlined above.

That doesn’t mean there are no limits on student loans from a private lender. Citizens Bank, for example, imposes an aggregate limit of $150,000 (including total federal and private student loan debt). See more private student loan limits in the chart below.

Additionally, borrowers often need a good credit score to qualify for a private student loan. Most undergraduate students typically apply with a cosigner, such as a parent or a creditworthy relative.

Today’s private student loan rates are competitive with federal student loan rates, with fixed annual percentage rates starting as low as 3.02{61c2d3aff5dd861f6d765374843566b764152cba6ae7a0e0dca1c7933b41ddbb} for well-qualified borrowers. Request a few student loan rates from our favorite lenders to compare options.

However, keep in mind that private loans don’t offer the borrower protections and perks federal student loans do. You can find out more in our comparison of federal and private loan benefits.

As for how much you can borrow, here are some examples of private student loan limits:

Private Student Loan Limits
Lender Annual limit Aggregate limit

$20,000 for undergraduate non-cosigned loans

$200,000 for undergraduate and graduate credit-based loans

$200,000 for undergraduate loans

$400,000 for graduate loans

Citizens Bank 100{61c2d3aff5dd861f6d765374843566b764152cba6ae7a0e0dca1c7933b41ddbb} of total cost of attendance (minus other aid received) $150,000
College Ave 100{61c2d3aff5dd861f6d765374843566b764152cba6ae7a0e0dca1c7933b41ddbb} total cost of attendance (minus other aid received) None
MPower Financing $50,000 per academic period $100,000
PNC $50,000 $225,000
RISLA $45,000 None

Note that some private lenders count your federal loan borrowing toward your aggregate limit.

All limits were current as of Sept. 30, 2022

Frequently asked questions

What is the maximum student loan amount for 2022-23?

The max federal student loan limit for 2022-23 is $5,500 to $7,5000 for dependent undergraduate students, based on your year in school. Independent undergrads can borrow between $9,500 to $12,500, while graduate students can borrow up to $20,500. Additionally, PLUS Loans can cover any remaining gaps in your college expenses if you meet the criteria (see more above).

How a lot monetary help can I get per semester?

Your monetary help package deal will define your federal annual award, probably together with Sponsored and Unsubsidized Federal Loans, grants and work-study awards. These funds are usually disbursed based mostly in your college’s periods, similar to half for every semester. Outdoors of that, you possibly can search scholarships and awards from different sources, together with your college or a mum or dad’s employer.

Why are there limits on federal pupil loans?

The Division of Training doesn’t have specific causes for limiting federal pupil loans. Nevertheless, for the reason that authorities has a set annual funds for pupil mortgage financing, having a most is smart. The objective is to help as many eligible college students as attainable, versus a smaller pool of scholars possibly receiving extra help than they want.

Moreover, federal loans present many advantages, together with income-driven reimbursement (IDR) plans and mortgage forgiveness. If the federal government didn’t impose limits, a lot of these help may not be attainable.

How typically do federal pupil mortgage limits change?

As you progress via school, you’ll be eligible to obtain extra funding annually. For instance, a first-year dependent pupil can borrow as much as $5,500, whereas a senior can borrow as much as $7,500.

As well as, the Division of Training periodically will increase federal pupil mortgage limits as a result of inflation and the rising value of faculty tuition.

What can I do if I would like emergency funds?

Most faculties and universities supply emergency pupil loans for these in dire want. Typically these loans are interest-free however should be repaid in a brief interval. Contact your college’s monetary help division for more information when you want fast assist.