Many people take out student loans to go to school. If you’re planning to fund your degree through federal or private loans, you may be wondering: Up to how much can I borrow in student loans?
Loan limits depend on whether you're taking out federal student loans or private student loans. They are also based on the type of federal loans you’re interested in.
Explore your options and borrowing limits in this guide to make an informed decision.
How much can I borrow in federal student loans?
The answer depends on your loan type. There are different types of federal student loans offered by the government, including:
- Direct Subsidized Loans: These are need-based and come with subsidized interest, so you don't pay interest while in school or while loans are in deferment. Only undergraduate students are eligible for them, and credit history doesn't matter.
- Direct Unsubsidized Loans: These loans are not need-based, and there's no subsidized interest. This means that students are responsible for paying interest. Undergraduate and graduate students are eligible regardless of credit history.
- PLUS Loans: These are available to graduate or professional students and parents of undergraduates. You can't qualify with adverse credit, and interest rates and origination fees are higher than those of Direct Loans. Interest is not subsidized.
Direct Subsidized and Unsubsidized Loan limits
Here are the borrowing limits for Direct Subsidized Loans and Direct Unsubsidized Loans. The table shows both undergraduate borrowing limits and graduate student loan limits.
*Dependent undergraduates whose parents aren't eligible for a PLUS loan can borrow up to the independent student amount.
Direct PLUS Loan limits
For Direct PLUS Loans, the maximum you can borrow as a graduate is the school-certified cost of attendance, minus any other financial aid you receive.
Keep in mind that PLUS loans usually come with higher interest rates. In 2023, the interest rate for Direct PLUS Loans is set at 8.05%.
Private student loan limits
The amount you're allowed to borrow in private student loans varies by lender.
Most private lenders typically let you borrow up to your school’s certified cost of attendance, minus any financial aid you receive from other sources. This can be useful if you max out your federal loan options and still need more funding.
On the other hand, there are private lenders who impose annual or lifetime loan limits. For example, Citizens allows you to borrow up to a specific aggregate amount based on the degree you are working toward:
- $150,000 for undergraduate and graduate degrees
- $225,000 for MBA and law degrees
- $180,000 to $350,000 for different health care degrees
Private student loan limits can vary depending on the lender and factors such as your credit score, income, and the financial credentials of your cosigner (if you have one). Some lenders allow you to prequalify for a loan on their website, which allows you to view estimated loan amounts and interest rates that you may qualify for.
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How much should I borrow in student loans?
When you decide how much money to borrow, you don’t necessarily want to take out the maximum federal or private loans that are available to you.
You should ideally borrow only what you need to cover the essential costs of earning your degree. That's because the more you borrow:
- The more interest you will pay
- The higher your monthly payments will be
- The more difficult it might be to pay off your student loans after graduation
You don't want your student loans to become a major financial burden, so think about your future income and aim to borrow only the amount you believe you'll be able to comfortably repay.
A good rule of thumb is to keep your total loan debt below the amount you expect to earn annually as your starting salary upon leaving school.
Student loan alternatives
There are other ways to fund your degree besides taking out student loans. Before you borrow, consider looking into these options:
- Scholarships and grants: This is free money for school that could come from the government, your school, nonprofits, or for-profit organizations. You can find scholarships and grants by talking to your school's financial aid office, using online databases such as BigFuture, or looking for opportunities in your community or field of study.
- Savings or family contributions: If you or your loved ones have money saved or you have a college fund such as a 529 plan, you can use this money to cover the costs of earning a degree.
- Choose a less expensive school: You could try to earn some credits at a community college or choose a school with lower tuition or a more generous financial aid package.
- Work part-time: You could participate in the federal work-study program if you're eligible, which would allow you to get an on-campus job. Or you could find an employer outside of school, including some companies that offer tuition reimbursement.
By maximizing the money you get from these other sources, you’ll likely keep student loan costs down so you can easily stay below the allowable borrowing limits — and hopefully end up with a debt that's affordable to repay.
