What is the Maximum Student Loan Limit?
The maximum student loan limit under the FFEL and Direct Student Loan programs, collectively known as Stafford Loans and regulated as part of the federal Title IV student aid programs, increases for the first three years of an undergraduate degree program, and remains steady for each year of a graduate degree program. Dependent students have lower borrowing limits than independent students. Reauthorization of the Higher Education Act of 1964 periodically adjusts the maximum student loan limits.
Loan Limits for Dependent Students
Students can determine whether they are considered dependent or independent by filling out the Dependency Status worksheet of the Free Application for Federal Student Aid (FAFSA). Students are dependent if they are younger than 23, unmarried, not in a graduate program or not active duty military personnel or an armed forces veteran. Whether or not a student is declared as a dependent on his or her parents’ income taxes does not affect dependency status for student loans.
Dependent students can borrow $5,500 their first year, $6,500 their second year and $7,500 their third and subsequent years. These annual limits are for the full year and are pro-rated if the remainder of the program is less than one academic year.
Independent Student Loan Limits
Students who can answer “no” to one of the questions asked on the dependency status worksheet have a higher maximum student loan limit. Independent undergraduate students can borrow $9,500 for their first year, $10,500 for their second year and $12,500 for their third and fourth years of study. As with dependent students, the maximum student loan limit is prorated when the remainder of the program is less than one year.
The higher maximum annual student loan limit also applies to dependent students whose parents apply for but are unable to get a PLUS Loan.
Annual Loan Limits for Graduate Students
Students enrolled in a master’s, doctorate or other graduate degree program can borrow up to $20,500 per academic year through the Stafford Loan programs. The limit is steady for all years of a graduate program, and all levels of graduate degrees.
Students in graduate programs max out their total student loan eligibility at $138,500, including loans taken out for undergraduate study. Some health professional degree programs have a ceiling of $224,000, including undergraduate debt.
Subsidized Loan Limits
The maximum student loan limit for each year includes both subsidized loans, which have the interest subsidized until the loan enters repayment, and unsubsidized loans, which accrue interest that the student must pay or capitalize from the date of disbursement. If students qualify for the need-based subsidized loans, the amount of the annual student loan maximum that can be in the form of subsidized loans is less than the total annual maximum.
Undergraduate students can have subsidized loans up to $3,500 their first year, $4,500 their second year, and $5,500 the third and later years. Graduate students are limited to $8,500 in subsidized loans per year, and $65,500 total, including undergraduate subsidized loans. The difference between the annual maximum student loan limit and the subsidized student loan limit is awarded as unsubsidized loans, and students who don’t qualify for subsidized loans can borrow the full annual maximum student loan amount as an unsubsidized loan.