How Much Can I Borrow in Student Loans?

The high cost of college and graduate school forces some students to take out loans to cover at least a portion of their tuition and expenses. However, the federal government limits how much each student can borrow in federal loans.

Federal Loans

The Department of Education sets limits on how much money you may borrow from the federal government (see the Resources section), which adjusts based on your year in school and whether you are a dependent or independent student. The federal government also imposes lifetime caps, which limit the total amount you may borrow for student loans.

Private Loans

Private lenders do not have the same restrictions that federal loans impose. However, many private lenders limit the amount that they will lend you to the difference between your financial aid and your expected cost of attendance. For example, if your school's expected cost of attendance equals $40,000 and you have $15,000 in other aid, you usually won't be able to borrow more than $25,000.

Warning

Just because you can borrow money for your education does not mean that you should. The Sallie Mae site recommends keeping your debt level as low as possible so that your future student loan payments do not exceed five to 10 percent of your expected income after graduation.

References

• U.S. Department of Education: Federal Student Aid: Direct Stafford Loans
• Sallie Mae: Keeping Your Debt Level Low

Resources

• U.S. Department of Education: Funding Education Beyond High School