You may be able to borrow up to the full cost of your college education in student loans, although the exact amount depends on the type of student loan you borrow. Dependent and independent undergraduate students can borrow up to a total of $31,000 and $57,500 in federal student loans, respectively, and many private loans set lifetime limits.
Regardless of the maximum loan amount, you should only borrow what you truly need. The more you borrow, the more interest will accrue. To get a rough estimate of how much you’ll need to borrow, tally up tuition and fees, housing, books, supplies and dining expenses.
Federal student loan limits
Using standard federal student loan limits, the cost of attendance and your Free Application for Federal Student Aid (FAFSA) information, your school determines how much you’re eligible to borrow in federal student loans. The amount you can take out is based on:
- The cost of attending the school.
- Your year in school.
- Your status as a dependent or independent student (whether your parents financially support you).
There are three main types of federal student loans:
- Direct Subsidized Loans: Available to undergraduate students with financial need. The Department of Education pays interest costs while the borrower attends school and during deferment periods.
- Direct Unsubsidized Loans: Available to undergraduate and graduate students, regardless of financial need. The borrower pays all interest costs.
- Direct PLUS Loans: Available to parents and graduate students, regardless of financial need.
Each of the different types of federal student loans has its own loan limits.
Undergraduate federal loan limits
If your parents financially support you, then you’re considered a dependent student. Federal student loan limits for dependents are $5,500 to $7,500 each year, up to a lifetime limit of $31,000.
You may be considered independent if you are over the age of 24, a military veteran or married, or if you financially support yourself. Independent students can borrow $9,500 to $12,500 annually and up to $57,500 total. If you’re a dependent undergrad but your parents don’t qualify for a parent PLUS loan, you may be able to borrow up to the federal student loan limits for independent students.
|Year in school||Annual loan limit (dependent undergraduate student)||Annual loan limit (independent undergraduate student)|
|Year 1||$5,500 (up to $3,500 may be subsidized)||$9,500 (up to $3,500 may be subsidized)|
|Year 2||$6,500 (up to $4,500 may be subsidized)||$10,500 (up to $4,500 may be subsidized)|
|Year 3 and beyond||$7,500 (up to $5,500 may be subsidized)||$12,500 (up to $5,500 may be subsidized)|
|Lifetime maximum limit||$31,000 (up to $23,000 may be subsidized)||$57,500 (up to $23,000 may be subsidized)|
Graduate federal loan limits
Students working on a graduate or professional degree can borrow up to $20,500 per year in Direct Unsubsidized Loans, with a lifetime maximum of $138,500 (including any federal loans borrowed during undergraduate school). If a borrower hits the graduate loan limit and needs to borrow more, they can take out a federal grad PLUS loan, up to the cost of attendance.
|Type of loan||Loan limit|
|Direct Unsubsidized Loan||$20,500 annually (lifetime max of $138,500, including federal undergraduate loans)|
|Grad PLUS loan||Up to the cost of attendance, minus any other financial aid received|
Private student loan limits
Private student loans are originated by private institutions such as banks, credit unions and online lenders. Private student loans are usually best when you’ve maxed out your federal financial aid potential, since they require hard credit checks and lack benefits like loan forgiveness opportunities and income-driven repayment plans.
While many lenders will allow you to borrow up to the total cost of attendance, the total amount that you can borrow will vary based on the lender, your major, your credit score and whether or not you have a co-signer. Below are examples of student loan limits among some private lenders.
|Citizens Bank||$350,000 aggregate (lower for some degrees)|
|College Ave||Total cost of attendance ($150,000 for some degrees)|
|CommonBond||$500,000 lifetime maximum|
|Earnest||Total cost of attendance|
|Sallie Mae||Total cost of attendance|
|SoFi||Total cost of attendance|
How much should you borrow?
Although student loan limits define how much you can borrow, you aren’t required to borrow the maximum. Depending on the loan terms, it could take years to pay off the debt, and the longer it takes, the more interest accrues — so it’s usually best to borrow as little as possible.
As a rule of thumb, try to keep your monthly student loan payment around 10 percent of your projected after-tax income your first year out of school. For example, if your take-home pay is $2,800 a month, then your student loan payments shouldn’t exceed $280.
Can you increase your student loan amount?
Private lenders likely won’t let you exceed their borrowing limits — and you also can’t borrow more than the federal student loan limits, even if you’re attending an expensive school. If you or your parents are willing to take out a PLUS loan, you might be able to fill the gaps that way.
How to pay for college after financial aid
If you’ve reached your limit on student loans, there are still ways to make a college education financially possible.
Scholarships and grants
Regardless of how much you’re offered in loans, scholarships and grants should always be on the top of your list when it comes to paying for college. You’re responsible for paying back everything you borrow with a loan plus interest, but scholarships and grants are often referred to as “free money” because you aren’t required to pay back those funds.
Scholarships and grants can be offered by the government, states, universities or private organizations. The key to maximizing potential scholarship money is to apply for as many as possible. Know the specific application deadlines, requirements and aid amounts before you apply and keep a detailed spreadsheet of the information so you don’t lose track.
There are scholarships offered for just about everything. Scholarship search engines can help you find scholarships that you qualify for based on things like your major, hobbies or future career aspirations.
Federal work-study programs are a form of financial aid designed for students with financial need. The program helps you find part-time employment with a company that partners with your school, and the money you earn goes straight to you.
How much you can earn depends on when you apply, your level of financial need and the amount of funding your school has available, although you’re guaranteed at least the federal minimum wage. If you’re interested in work-study, you’ll apply through the FAFSA.
Choose more affordable options
If you’ve maximized your scholarship and grant potential and don’t qualify for work-study, consider more affordable options. Some small-scale changes include opting to rent or buy used textbooks instead of new, living off campus or getting roommates. You can also consider transferring to an in-state school, trying out an online program or dropping to half-time enrollment while you work a part-time job.
The bottom line
The first step in calculating how to pay for college is understanding your school’s cost of attendance. From there, you can figure out whether you can cover the costs using grants, scholarships and money earned working a part-time job.
If you need to borrow money to pay for school, use your Direct Unsubsidized and Direct Subsidized loan options first. After that, you might be able to cover the rest with a PLUS loan. A private student loan should be your last resort, because they come with fewer protections than federal student loans.
Find out what your monthly payment will be and whether you feel comfortable with the amount. Taking out as little debt as possible gives you the best shot at postgraduation financial success.