How Much Student Loan Can I Borrow Per Semester
Undergraduates can borrow up to $12,500 annually and $57,500 total in federal student loans. Graduate students can borrow up to $20,500 annually and $138,500 total.
Direct subsidized and unsubsidized loan limits.
|Dependent undergraduate students|
How long does it take to pay off a student loan?
- Federal student loan providers estimate that it will take borrowers 10 years to pay off their student loans, or at least thats the timeline for payoff with a standard repayment plan.
How Much Should You Borrow
The low borrowing limits and interest rates on the most affordable federal loans for undergrads mean that most borrowers who finish their degrees can repay them.
But if you go on to grad school, its easier to take on the level of student loan debt thats more difficult to repay. The higher limits on PLUS loans can saddle you with six-figure loan debt.
You can use the Department of Educations College Scorecard to get an idea of how much debt its reasonable to take on with the degree you are pursuing.
Federal Sources Of Financial Aid Per Year
Federal financial aid programs are provided through the U.S. Department of Education . Congress votes on how much money each program receives every year, and what the minimum and maximum amounts of financial support can be.
This grant has specific rules about working in certain fields and following certain classwork paths to become a certified teacher upon graduation. If you do not meet these standards, your grant will be revoked, and you may have to pay some or all of it back.
- Student loans: There are several loan programs provided by the federal government, including:
- Direct subsidized loans
- Direct PLUS loans, both for graduate students and parents with dependent undergraduates
- Direct consolidation loans
Loan amounts vary based on several factors, like:
- Whether you are a dependent or independent undergraduate student
- Whether you are a graduate or professional student
- Whether you have defaulted on student loan payments in the past
- Whether you have a significant financial need, qualifying you for subsidized loans
How much you can take out also depends on your academic year in school. Here are the current amounts set by the federal government:
You may also qualify for the federal work-study program, which helps you find a job, either on or off-campus, and pays you upfront so you can apply the income to your education costs. The amount you receive through this program varies by school.
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What To Do If You Reach Your Borrowing Limit
If youve gone over your allotted amount of federal loans, there are a few things you can do to be in good standing again.
Repay Your Loans or Make Payment ArrangementsYou can contact the National Student Loan Data System to find out which loans are over your limit and how much you need to repay to regain eligibility for loan borrowing. We will need a proof of payment and an adjusted loan history after youve made a payment to continue to award federal aid to you. Information about this is also available on your Student Aid Report and from FAFSA.
Consolidate Your Loans: You can contact the servicer for your loans to find out how to consolidate them. We will need to see the proof of your consolidation arrangement before we can continue to award federal aid to you.
Sign a Reaffirmation Letter: You can sign an agreement, or reaffirmation letter, that acknowledges the debt and affirms your intention to repay the excess amount as part of the normal repayment process. You can contact your federal loan servicer directly to get a letter.
To find out who your servicer is, you can contact the National Student Loan Data System or the U.S. Department of Education at 1-800-433-3243.
Direct Loans: Subsidized And Unsubsidized
Both subsidized and unsubsidized loans are granted at the beginning of a semester, and neither is required to be paid back until after you graduate . No matter which year the loan covers, once youre out of school, your payments begin.
The big difference between subsidized and unsubsidized loans is when you start paying interest.
An unsubsidized loan gains interest just like a private loan would: starting the day you take it out. The dont-pay-until-you-graduate grace period only applies for your loan payments. Interest payments are still required throughout your time in school.
However, if you take out a subsidized loan, the government pays interest for you while youre in school. Your personal interest payments will begin only after you graduate, along with the rest of your loan payments.
If youre going to take out a federal student loan, Rebecca recommends pursuing a subsidized one.
I remember the difference by saying unsubsidized is uncool, Rebecca said. Paying off the interest on an unsubsidized loan can be very stressful for students, especially if they arent earning much on the side while theyre in school.
Plus, she mentioned, if you are earning an income while in school, you would be better served by putting that money toward paying for your next semester upfront and skipping the loans altogether rather than paying down a growing debt.
The fewer loans you take out, the less interest you pay. The less interest you pay, the cheaper college will be.
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Federal Borrowing Limits For Graduate Students
Your federal borrowing limits are higher if youre working on a masters or doctorate program, including an M.A., MBA, M.D., J.D., or Ph.D.
The annual borrowing limit for grad students is $20,500 a year, and you can borrow up to $138,500 in total, including the loans you took out as an undergraduate. Since July 1, 2012, grad students arent eligible to take out subsidized loans anymore. But its possible for grad students who took them out before then to have up to $65,500 in subsidized loans.
Medical school students can take out up to $224,000 in federal loans before turning to grad PLUS or private student loans. For most medical school students, the annual borrowing limit on the more affordable federal student loans is $40,500.
Subsidized And Unsubsidized Loan Examples
Alberta Gator is a first year dependent undergraduate student. Her cost of attendance for Fall and Spring terms is $17,600. Albertas expected family contribution is $10,000 and her other financial aid totals $9,000.
Because Albertas EFC and other financial Aid exceed her Cost of Attendance, she is not eligible for need-based, Subsidized Loans. She is, however, eligible for an Unsubsidized Loan. The amount she would be awarded would be $5,500. Even though her cost of attendance minus other financial aid is $8,600, she can only receive up to her annual loan maximum .
Private Student Loan Process
To apply for a private loan you dont need to file a FAFSA. Youll need to apply for a loan with an individual lender. The lender will check your credit score and will often require a creditworthy cosigner.
If you have decided a private loan is right for you, check out our list of the best private student loans to compare lenders.
Turns Out There Are A Few Differences Between A Federal Student Loan And A Private Loan:
Most federal loans dont require a credit check.
Federal loans often have low, fixed interest rates,which vary based on the first disbursement date of the loan. The interest rate for Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans for undergraduate borrowers first disbursed on or after July 1, 2020, and before July 1, 2021, is 2.75%
Federal loans are tax-deductible.
Federal loans can also be deferredmost commonly, students will defer their loans for up to 6 months after they graduate .
Lastly, federal loans are eligible for loan forgiveness in some special cases.
While this list may make federal student loans look nicer than what Mr. Local Banker Man would has to offer, it should be noted that student loans are still debt. Taking out a student loan means spending money you dont have and that you will have to pay back… with interest.
Taking out a multi-thousand dollar loan at 18, with no career or even the guarantee of a good job once you graduate? Thats a financial gamble. For better or worse, it will impact your life long after college.
Given that, lets talk about the different kinds of federal student loans you could apply for and the impact they can have on your financial future.
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What Is Financial Aid
Most students dont have the ability to pay for college out of pocket. Considering tuition, books, room and board, and other related fees, the cost can be substantial. Not surprisingly, most students need to research financial aid options.
Financial aid consists of a variety of components that help students pay for college, such as scholarships, grants, loans, and work-study programs. Although some types of aid do not need to be paid back, others do.
It wasnt until I talked to Rebecca that I learned that financial aid does not always equate to free money.
Its absolutely possible to qualify for grants, which are essentially free money, Rebecca said, but most of the time, accepting financial aid means taking out federal loans.
I suddenly felt ripped off. No oneNO ONEever told me that financial aid meantstudent loans. Having been raised to live debt free myself, the idea that student debt may be masquerading under a friendlier title didnt sit well with me.
If financial aid is just a loan, I asked, how is it any better than getting a private loan to pay for college?
When Should I Apply For Student Loans
In order to apply for federal student loans, you must fill out your FAFSA during a specific time. The federal deadline for completing your FAFSA usually comes very late in the school year. For example, the deadline for the 2021-2022 school year is 11:59 pm on June 30, 2022. However, the federal deadline shouldnt be your only focus.
Schools have FAFSA deadlines as well, varying from campus to campus. Make a note to contact your schools financial aid office if youre unsure when you need to have your FAFSA completed. However, as a general rule, you should plan on applying for federal student loans before the beginning of the semester.
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How To Get The Most Financial Aid Per Semester
Federal financial aid is calculated a little differently by each school, but they all use your FAFSA number to determine your specific financial need. You should always provide accurate and truthful information on your FAFSA. Lying about income or moving money around can cause you to lose your award and be barred from receiving federal financial aid for the rest of your education. There are several ways to get enough financial aid to cover the cost of your post-secondary education, either from the federal government, your state government, and/or your school.
- Find merit-based scholarships to apply for, both through your college and from nonprofits or for-profits.
- Complete your FAFSA information early since some money is first-come, first served.
- Research other sources of income, like private student loans.
Need-based aid and federal student loans are the major sources of monetary support for students all over the United States, but they are not the only options to help you get through school. You could qualify for state-based grants and scholarships, which also use the FAFSA to determine your eligibility. Hobbies, good grades, and many other skills can help you qualify for merit-based scholarships through your college or from businesses outside your institution.
Federal Direct Plus Loan
Grad PLUS and Parent PLUS loans are available to graduate students and parents of dependent undergraduate students. PLUS loans arent subsidized, so interest will start accruing as soon as the loan is fully disbursed. Repayment can be deferred while the student is enrolled in college and for six months after graduation.
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Is It Worth It
If the estimated payments will cause a financial strain, the family has to consider its options. The student may want to attend a lower-cost community college to complete their lower-division or general education requirements and then transfer to a university, or attend another college completely. The family can also pull together to earn additional money, or the student can intensify the search for scholarships to locate additional funding.
Student Loan Rates Are Rising
Apply for a private student loan and lock in your rate before rates get any higher.
This chart from the Pennsylvania State University student aid office breaks down the limits depending on your situation:
|Dependent Undergraduate Student||Dependent Undergraduate Student with a Parent PLUS Loan Denial||Independent Undergraduate Student||Graduate or Professional Degree Student|
|First Year||$5,500. A maximum of $3,500 may be subsidized.||$9,500. A maximum of $3,500 may be subsidized.||$9,500. A maximum of $3,500 may be subsidized.||$20,500|
|$6,500. A maximum of $4,500 may be subsidized.||$10,500. A maximum of $4,500 may be subsidized.||$10,500. A maximum of $4,500 may be subsidized.||$20,500|
|Third, Fourth, and Fifth Years||$7,500. A maximum of $5,500 may be subsidized.||$12,500. A maximum of $5,500 may be subsidized.||$12,500. A maximum of $5,500 may be subsidized.||$20,500|
|$31,000. A maximum of $23,000 may be subsidized.||$57,500. A maximum of $23,000 may be subsidized.||$57,500. A maximum of $23,000 may be subsidized.||$138,500. The graduate debt limit includes Direct Loans received for undergraduate study.|
Besides these student loan limits, there are two other limitations to be aware of:
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Attending School Less Than Half Time You Can Still Apply For A Student Loan
Whether youre a full time, half-time, or less than half-time student, you can use school loans to pay for all your school-certified expenses at degree-granting institution.Taking winter or summer classes? Studying abroad? Taking continuing education or professional certification courses? We have student loans that can help you pay for classes taken online, on campus, or anywhere.
Accept And Receive Your Federal Direct Loans
Temple University students must accept offered Federal Direct loans online in the Financial Aid section of Self-Service Banner in the TUportal after receiving email notification that the financial aid award is ready for review.
New Federal Direct loan borrowers must complete a Master Promissory Note and Entrance Interview.
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Maintenance Loan For Living Costs
You may have to give details of your household income – this can affect how much you get.
The loan is paid directly into your bank account at the start of each term. You have to pay the loan back.
|2020 to 2021 academic year||2021 to 2022 academic year|
|Living at home|
|Living away from home, outside London||Up to £9,203|
|Living away from home, in London||Up to £12,010|
|You spend a year of a UK course studying abroad||Up to £10,539||Up to £10,866|
You may not get the full amount, so you may have to find other ways to fund the rest of your living costs. This could include, for example, part-time work, local authority assistance, bursaries, scholarships, or family contributions.
You can use the student finance calculator to estimate how much Maintenance Loan youll get – it will also tell you if youre eligible for extra grants or allowances.
If youre 60 or over on the first day of the first academic year of your course you can apply for up to £4,014.
You must report any changes to your living arrangements in your online account, so you get the correct amount of student finance. You might need evidence of any changes.
How Can I Pay For College Without Loans
So if youre feeling anxious about the best ways to pay for college without student loans, lets look at the options. Pay Cash for Your Degree. Apply for Aid. Choose an Affordable School. Go to Community College First. Consider Directional Schools. Explore Trade Schools. Apply for Scholarships. Get Grants.
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Choose More Affordable Options
If youve maximized your scholarship and grant potential and dont 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.
Loan Proration For Graduating Undergraduate Students
If you are a graduating senior and only attending one semester, your Federal Direct loans may be prorated based on the number of credits for which you are enrolled. This means that you may not be eligible to receive your maximum annual loan limit.
This affects students enrolled for only one final semester in an academic year: either fall-only, spring-only, or summer-only. For example, this will not affect students who are enrolled in fall and spring semesters and graduate at the end of the spring semester.
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