How Much Can I Borrow in Student Loans? Limits and Guidelines

If you need to take out student loans to cover college costs, you aren't alone. More than half of undergraduates leave school with an average student loan debt of $29,300, according to the College Board. There's a hard limit to how much you can take out in federal student loans. Private student loan maximums are less set in stone, but your borrowing is still capped based on your ability, or your cosigner's ability, to repay the loan and the cost of attendance at your school.

This guide will explain how much you can borrow in student loans, including federal and private loan limits for students, and provide strategies for reducing your own student loan burden.

Federal student loan borrowing limits

Federal student loan borrowing limits vary based on how far along you are in your education and whether or not your parents support you financially. Loan limits are also broken down into separate caps for Direct Unsubsidized Loans and Direct Subsidized Loans.

Undergraduate federal student loan limits

Independent undergraduates can borrow more than dependent students. While independent students can borrow up to $57,500 in federal student loans, a dependent student's federal loan limit is capped at $31,000.

“These loans have annual borrowing caps, and many of these subsidized loans have no interest while in school,” says Steve Azoury, a chartered financial consultant (ChFC) and owner of Azoury Financial in Troy, Michigan.

The chart below breaks down federal student loan borrowing limits for undergraduates taking out unsubsidized and subsidized federal loans

Graduate federal student loan limits

All graduate and professional students are considered financially independent from their parents, which impacts borrowing limitations. The total limits for graduate students take into account any federal loans from undergraduate coursework.

Graduate and professional students also have access to Direct PLUS Loans. Depending on the cost of your graduate school, your federal borrowing power might be further restricted. Generally, the maximum graduate PLUS loan amount you can borrow is the cost of attendance at your school minus other financial aid you receive.

Private student loan borrowing limits

A private student loan is another option. However, they usually have higher interest rates than federal student loans, and interest accrues while you're in school.

Private student loan limits vary from lender to lender. But, in general, the amount you can borrow from a private lender won't exceed your school's total cost of attendance minus any other financial aid you receive.

In addition to the cost of attendance loan limit, private student loan lenders consider your ability to repay the loan when determining how much you can borrow. Specifically, they often consider your credit score, monthly income, and debt-to-income ratio (DTI).

Since many students don't have robust income or established credit scores, many private lenders require parents to cosign undergraduate student loans. The lender evaluates the cosigner's ability to repay the loan in addition to the cost of your school when setting student loan borrowing limits.

Current private student loan rates

Factors that affect student loan borrowing limits

The absolute limit to the amount you can borrow in student loans varies a bit based on your individual situation. The following factors can have a big impact:

School's cost of attendance and financial aid eligibility

You won't be able to borrow more than your school's cost of attendance (COA), as determined by the school. This goes beyond tuition to include costs like books, housing, food, transportation, and more.

In addition to the COA, lenders often consider your other financial aid. So, if your school's COA is $20,000 and you received a $5,000 grant to cover school costs, you'll probably only be able to borrow $15,000.

In terms of different types of federal loan limits — like those attached to subsidized vs. unsubsidized loan limits, your financial aid eligibility comes into play. Direct Subsidized Loans are only available to undergraduate students with demonstrated financial need, which means students whose financial need isn't enough to qualify won't be able to tap into funding from these loans at all.

Dependency status and its role in borrowing limits

Independent students don't have the financial support of a parent, which leads to an increased federal student loan borrowing limit.

You'll count as an independent student if you are at least 24 years old, married, a veteran, a member of the armed forces, an orphan, a ward of the court, an emancipated minor, someone at risk of becoming homeless, or someone with legal dependents. Otherwise, you'll be considered a dependent student for federal borrowing purposes.

Dependent students have lower federal student loan borrowing limits.

Credit history

Although federal student loans don't require a credit score, private student lenders often require a reasonably good credit score before issuing you a loan. Generally, borrowers with higher credit scores can borrow larger loan amounts.

How to calculate how much you should borrow

Now that you have a better idea of your lifetime student loan cap, it might be tempting to borrow to the limit. But in reality, it's best to avoid overborrowing to reduce long-term debt after graduation.

It's best to borrow only what you absolutely need to cover your education costs. Beyond keeping your loan balance as low as possible, it's helpful to limit your borrowing to what your expected future earnings will allow you to repay comfortably.

“Consider the value of your major relative to your career goals,” says Dr. Shaan Patel, founder of online education company Prep Expert. “It's important to make sure the investment you're making in college will pay off with the kind of job opportunities you're looking for.”

With an idea of your future career, lean on resources like the U.S. Bureau of Labor Statistics to understand what you might earn in your future job. After you estimate your future earnings, consider how much of that income could realistically go toward repaying your loans.

Consider using loan calculators to evaluate the impact these loans will have on your future budget during repayment. Playing around with the numbers before you take on a student loan might motivate you to cut back on borrowing as much as possible to set up a smoother financial journey post-graduation.

Tips for managing student loan borrowing

Access to student loans can help you pay for your college education. However, overborrowing can leave you in a challenging financial position after graduation. With that in mind, limiting your student loan borrowing as much as possible is ideal.

Use the tips below to limit your student loans.

• Seek out scholarships and grants: You won't have to repay these funding sources after graduation. Make applying to relevant scholarships and grants a priority to offset school costs.
• Work part-time: A part-time job or work-study opportunity can help you cover school-related costs without taking out a loan.
• Explore employer tuition reimbursement programs. Some employers, like Chipotle and Target, offer tuition reimbursement programs to help employees pay for school. Finding an employer with this perk could be a game-changer if you are looking for a job.

When you need to lean on student loans, stick with federal loans first when possible.

“Private student loan interest rates are typically higher, and may not offer some of the protections offered by federal loans,” says Martha Kortiak Mert, chief operating officer of Saving For College, a website that offers resources and information about financing higher education. “For example, during the COVID pandemic, when loan payments were paused, the pause only applied to federal loans, and those with private loans had to continue paying,” Mert says.

The borrower protections embedded into federal student loans include income-driven repayment schedules and potential forgiveness opportunities. Either or both could come in handy as you navigate repayment after graduation.