Maximum Federal Student Loan
The maximum amount of student loan debt that you can take on is determined by the federal government. That’s why it’s important to understand how your overall financial aid package—including Pell grants, subsidized Stafford loans, unsubsidized Stafford loans, PLUS loans for parents and graduate/professional students—works together to create this limit. We’ll help you understand how much money you can borrow so you can meet your educational goals without getting buried in debt!
The maximum amount you can borrow depends on several factors:
The maximum amount you can borrow depends on several factors:
- The amount of money you need to borrow.
- The interest rate of your student loan.
- The length of time you plan to be in school.
- The type of loan you are taking out (for example, a subsidized or unsubsidized Direct Subsidized Loan).
- The type of school you are attending (for example, a private nonprofit college).
If your financial aid award includes loans, the type and amount of each loan will be included in your award letter or email notification from the federal processor that details how much aid has been awarded to you.
The Federal Pell Grant is a need-based grant that you can use to help pay for college. The amount of your award will depend on your financial need, which is determined by the results of the Free Application for Federal Student Aid (FAFSA).
Award amounts are based on cost of attendance and may also be affected by whether or not you have other types of aid. It does not matter how well you did in high school, or whether or not your parents attended college – unlike other types of federal financial aid, the Pell Grant is awarded based on your current circumstances and level of financial need. You must reapply each year that you wish to receive funding from this program; however, there is no limit as to how long one can receive these funds during their lifetime.
Federal Direct Subsidized Stafford Loan
The maximum amount you can borrow through the Federal Direct Subsidized Stafford Loan is $5,500 per year. You can borrow up to $23,000 total over the course of your undergraduate education, and up to $65,500 total over the course of your graduate education.
The following chart shows how much money you can borrow each academic year based on your grade level:
Grade Level Total Amount Borrowed Undergrad Graduate 1st-Year (Freshman) $5,500 1st-Year (Freshman) $5,500 2nd-Year (Sophomore)* 679750 3rd-Year (Junior)* 798250 4th-Year (Senior) 825000 5th Year if needed 825000 6th Year if needed 825000 7th Year if needed 825000 Postbaccalaureate* 120000
Federal Direct Unsubsidized Stafford Loan
The maximum amount you can borrow for the Federal Direct Unsubsidized Stafford Loan depends on a few factors. First, it depends on your school. The amount of money that a student can borrow is capped at $20,500 annually and $150,000 in total at all schools combined. Next, it depends on your financial need; loans are available to students who demonstrate financial need through their FAFSA form. If you don’t demonstrate financial need or want to avoid any possible interest payments (which could be significant), consider applying for a private loan instead of using federal funds to pay for college or graduate school tuition and fees.
Finally, there’s also an academic performance requirement: if you’re planning on pursuing an advanced degree in engineering or science while working full-time as part of the program—and thereby eliminating some other types of federal aid eligibility—you might not qualify for these types of loans because they only apply when students have enrolled full time; otherwise they’ll have access only through subsidized Stafford Loans instead (see below).
Federal Direct PLUS Loan for Parents of Dependent Undergraduate Students
- You can borrow up to the cost of attendance minus other aid.
- The PLUS Loan will be authorized by your child’s school and sent directly to the school.
You must be a parent of an eligible dependent undergraduate student enrolled in a degree-granting program at least half-time, or an independent undergraduate student who is unable to obtain sufficient credit elsewhere, as determined by the financial aid office at your child’s school.
Federal Direct PLUS Loan for Graduate and Professional Students
Federal Direct PLUS Loans are available to graduate and professional students who have already borrowed the maximum amount of federal student loans. The maximum amount that you can borrow each year depends on your year in school and the cost of attendance at your school. The loan’s interest rate will be the same as that for a new Direct Unsubsidized Loan, which is currently 4% (10/1/19).
- If you don’t qualify for a Federal Direct Unsubsidized Loan or a Federal Grad PLUS Loan, you may be able to get this one instead. To determine if your family qualifies for this type of loan, use our calculator below:
The total amount of financial aid that you can receive from the federal government is limited.
The total amount of financial aid you can receive from the federal government is limited, and several factors determine the maximum amount that you may borrow. These include your eligibility for the following types of loans:
- Pell Grant (the largest source of help)
- Federal Direct Subsidized Stafford Loan (a low-cost loan)
- Federal Direct Unsubsidized Stafford Loan (not necessarily lower than private student loans)
- Federal Direct PLUS Loan for Parents of Dependent Undergraduate Students (parent borrowers are eligible to take out this type of loan only if they have a creditworthy co-signer)
- Federal Direct PLUS Loan for Graduate and Professional Students (you are considered independent if you are 24 years old or older by June 30th with an undergraduate degree or already have an advanced degree).
The federal government limits the amount of money available for student loans, but there are ways to get more if you need it. You can apply for a private loan from a bank or credit union, but these will typically come with higher interest rates and fees than federal loans. If you have questions about how much financial aid is available for your educational expenses, contact our office today!