Federal Student Loan Limits: How to Pay for College When You Max Out

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Federal student loans are a popular way to pay for college since they offer low-interest rates and flexible repayment terms. However, the Department of Education sets student loan limits, restricting how much you can borrow per year and in total throughout your entire educational career.

Once you’ve reached the aggregate student loan limit (or the full amount you can borrow for undergraduate and graduate study), you’ll need to explore other avenues. These can include different loan sources or even appealing your financial aid award.

Let’s take a closer look at the maximum student loan amount and what to do once you’ve reached it.

Federal student loan limits

If you’re a college student or the parent of one, you should be aware of the Department of Education’s federal student loan limits. Ultimately, these borrowing restrictions could affect 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, but here’s an overview in this chart:

Dependent Undergraduate Student Independent Undergraduate Student* Graduate and Professional Degree Student
First Year
(0 – 29 credits)
$5,500 total (subsidized loans capped at $3,500) $9,500 (subsidized loans capped at $3,500) $20,500 (unsubsidized only)
Second Year
(29.1– 59 credits)
$6,500 (subsidized loans capped at $4,500) $10,500 (subsidized loans capped at $4,500) $20,500 (unsubsidized only)
Third year and beyond
(59.1+ credits)
$7,500 (subsidized capped at $5,500) $12,500 (subsidized capped at $5,500) $20,500 (unsubsidized only)
Maximum Loan Amounts
(for entire educational career)
$31,000 (subsidized loans capped at $23,000) $57,500 (subsidized loans capped at $23,000)

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

The graduate debt limit includes Direct loans received for undergraduate study.

*These limits may also apply to dependent students whose parents are denied a parent PLUS loan.

PLUS Loan limits

The federal government also offers 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 much college will cost. Or you can ask your preferred schools about their net price calculators.

You can also borrow less if you receive grants, scholarships and other student aid that doesn’t need to be repaid.

If you’re unsure about the dollar amount you should be spending on college each year, look at our guide on how much student loan debt is too much.

Finding additional funds for college

Some students might face costs that go above and beyond the standard federal student loan limits.

For example, a first-year student might need to borrow $7,000 to cover a year’s tuition and fees — $1,500 above the undergraduate student loan limit. Or a college senior who wants 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% rate, higher than the 6.54% rate on direct loans for graduate loans and the 4.99% 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% 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
Ascent

$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% of total cost of attendance (minus other aid received) $150,000
College Ave 100% 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 much financial aid can I get per semester?

Your financial aid package will outline your federal annual award, possibly including Subsidized and Unsubsidized Federal Loans, grants and work-study awards. These funds are generally disbursed based on your school’s sessions, such as half for each semester. Outside of that, you can seek scholarships and awards from other sources, including your school or a parent’s employer.

Why are there limits on federal student loans?

The Department of Education doesn’t have explicit reasons for limiting federal student loans. However, since the government has a set annual budget for student loan financing, having a maximum makes sense. The goal is to assist as many eligible students as possible, as opposed to a smaller pool of students maybe receiving more aid than they need.

Furthermore, federal loans provide many benefits, including income-driven repayment (IDR) plans and loan forgiveness. If the government didn’t impose limits, these types of assistance might not be possible.

How often do federal student loan limits change?

As you progress through college, you’ll be eligible to receive more funding each year. For example, a first-year dependent student can borrow up to $5,500, whereas a senior can borrow up to $7,500.

In addition, the Department of Education periodically increases federal student loan limits due to inflation and the rising cost of college tuition.

What can I do if I need emergency funds?

Most colleges and universities offer emergency student loans for those in dire need. Often these loans are interest-free but need to be repaid in a short period. Contact your school’s financial aid department for more info if you need immediate help.



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