There are many types of student loans, each with their own borrowing limitations and terms. Federal student loans tend to have stricter borrowing limits compared to private loans, and it’s not uncommon for students to use a mix of both to cover their education expenses.
- Dependent undergraduate students can borrow a maximum of $31,000 in unsubsidized federal loans over the course of their studies.
- Graduate students can take out up to $20,500 in federal unsubsidized loans each year, but can take out more with grad PLUS loans.
- Undergraduate students with financial need can borrow up to $23,000 in subsidized federal loans for their undergraduate studies.
- Private lenders generally let you borrow up to your school’s total cost of attendance, though terms may vary.
Federal student loans have annual borrowing limits for each academic year, and lifetime borrowing limits known as aggregate loan limits. Once you reach your lifetime limit, you can no longer receive additional loans.
To determine how much federal aid you can get, you must submit the Free Application for Federal Student Aid (FAFSA). Once submitted, your school’s financial aid office will use the information you provided to determine which loans you’re eligible for, and how much you can borrow. The amount you can take out is based on:
- Your year in school
- Your school’s total cost of attendance
- Your enrollment status
- Whether you’re a dependent vs. independent student (do your parents financially support you?)
Direct Subsidized Loans are available to undergraduate students who demonstrate financial need and are enrolled at least half-time at a qualifying school. The government pays the interest when you’re enrolled in school at least half-time, during deferment periods, and during your six-month grace period after you leave school.
Both dependent and independent undergraduate students can borrow between $3,500 to $5,500 per academic year, and up to $23,000 total. Here’s a breakdown of the annual borrowing limits for subsidized student loans:
Year in school | Maximum you can borrow |
|---|---|
First year | $3,500 |
Second year | $4,500 |
Third year and beyond | $5,500 |
Lifetime loan limit | $23,000 |
For undergraduate borrowers, the current interest rate for Direct Subsidized Loans is 5.50% for loans disbursed on or after July 1, 2023, and before July 1, 2024.
Direct Unsubsidized Loans are available to both undergraduate and graduate students, and there’s no financial need requirement. Anyone enrolled at least half-time at a qualifying school can qualify for these loans.
Unsubsidized loans are generally the most affordable and accessible type of loan after subsidized federal loans. Like other federal loans, they come with annual and aggregate loan limits, depending on whether you’re a dependent, independent, or graduate student.
Borrowing limits for Direct Unsubsidized Loans are as follows:
Year in school | Dependent undergraduates | Independent undergraduates | Graduate students |
|---|---|---|---|
First year | $5,500 | $9,500 | $20,500 |
Second year | $6,500 | $10,500 | $20,500 |
Third year and beyond | $7,500 | $12,500 | $20,500 |
Lifetime loan limit | $31,000 | $57,500 | $138,500 (includes undergraduate loans) |
The current interest rate for undergraduate borrowers is 5.50%. For graduate and professional borrowers, the interest rate is 7.05% for loans disbursed on or after July 1, 2023, and before July 1, 2024.
Related: Subsidized vs. unsubsidized student loans
PLUS loans have no cumulative borrowing limits. You can borrow up to your school’s total cost of attendance, minus any other financial aid you receive, such as grants and scholarships.
Many borrowers turn to PLUS loans after exhausting all their subsidized and unsubsidized federal loans. There are two types of Direct PLUS Loans:
- Parent PLUS loans: Parent PLUS loans are for biological or adoptive parents (and in some cases, stepparents) of dependent undergraduates.
- Grad PLUS loans: Graduate PLUS loans are available to graduate or professional students.
You must pass a credit check to qualify for a Direct PLUS Loan. Borrowers with adverse credit won’t qualify without an endorser (similar to a cosigner) or proof of extenuating circumstances that explain their credit history. You must also complete credit counseling.
If you still have education costs to cover after exhausting all federal student loan options, consider looking into private student loans. These loans are available through banks, credit unions, and online lenders.
Good to know:
Private student loans often come with higher interest rates and fewer borrower protections than federal loans. Consider them only after using up your federal aid options.
Many lenders will let you borrow up to your school’s total cost of attendance. Like federal student loans, some private loans have lifetime limits. For example, Citizens Bank offers undergraduate and graduate student loans up to $150,000, and loans for health care degrees up to $350,000. However, other factors may impact the amount you can borrow, such as:
- Your credit score
- Your income
- Your degree program
- Having a cosigner
- A lender’s specific terms
If you’re working while in school, you may also be able to qualify based on meeting certain income requirements. The less risky you appear to lenders — meaning you meet or exceed their eligibility criteria — the more likely you are to get approved for a higher loan amount.
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Borrowers who graduated with at least a bachelor’s degree may refinance their student loans with ELFI. Every applicant is assigned a student loan advisor to help guide them through the process.
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EdvestinU is a loan program offered by Granite Edvance Corporation and offers affordable rates for refinance loans. Borrowers can refinance federal and private loans, and fixed and variable rate loans are available.
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INvestEd is an Indiana-based nonprofit lender that provides refinanced student loans nationwide. As a nonprofit, INvestEd offers competitive rates as well as an autopay discount. Cosigner release is also available after 12 on-time payments, which is less than many competitors.
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Founded in 1981, Rhode Island Student Loan Authority (RISLA) is a nonprofit lender that offers refinance loans to borrowers in all 50 states. Though most private lenders require borrowers to have graduated to qualify for refinancing, RISLA also serves borrowers who didn’t complete their degree.
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If you’ve reached your student loan borrowing limit and still need more funding to pay for school, here are some steps you can take:
- Contact your school’s financial aid office: They might be able to provide guidance on further funding options, and help you apply for scholarships, grants, or work-study programs.
- Work part-time: Earning money through part-time work can help cover tuition and living expenses without increasing your debt. Consider on-campus jobs or remote gigs for added flexibility.
- Save on living expenses: You can significantly reduce your college costs by living at home, opting for off-campus housing, or sharing room and board expenses with a roommate.
- Consider a more affordable school: Public in-state schools are often much more affordable than private out-of-state colleges.
Learn more: Average cost of college 2024
While you may get approved for the maximum loan amount, that doesn’t mean you have to borrow it all. Ideally, you should only borrow what you need for your education, including tuition, fees, books, and essential living expenses.
Depending on the terms, it could take a decade or more to pay off your loan. The longer you take to pay back the loan, the more interest you’ll pay over time. So it’s usually best to borrow only what is absolutely necessary.
Meet the contributor:Robyn Conti
Robyn Conti has been helping educate consumers and financial professionals about investing, retirement planning, and personal finance since 1998. Her articles have run in publications including Forbes Advisor, The Motley Fool, and Robb Report, among others.
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