Limits help to reduce abuse. Therefore, student loans can be abused if not properly guided. Student loan limits are determined by factors such as type of loan, cost of attendance of your school, and year of stay in school.
Often, the maximum amount is not what you should borrow. This is because; one needs to cut his coat according to his size. Thus, the loan amount is what you can comfortably pay back and still falls in between the loan limits. In addition, you should be able to borrow what you can easily pay back even when the interest is high. With a comfortable interest rate, repayment is made easier.
WHAT YOU SHOULD KNOW
- Firstly, There are different types of loans which include Federal loans such as federal direct subsidized loans, federal direct unsubsidized loans, and Federal Direct PLUS loans. Also, another type of loan is private loans.
- Also,The way you qualify for a specific loan is different from what qualifies you on another type of loan.
- Lastly, Loan limits depend on the type of loan, cost of attendance, and length of stay in school.
How Much Can I borrow?
Earlier on we mentioned that loan limits have factors that are used to determine it. Thus, types of loans are part of them and it will be detailed below. The following are federal student loans:
- First,Direct Subsidized loan
- Secondly, Direct Unsubsidized Loan, and
- Thirdly, Direct PLUS.
Federal Direct Student loans
We have a table that contains the loan limits for federal direct student loans. Thus, the maximum amount you can borrow on Direct Subsidized and Unsubsidized student loans and other direct student loans.
|Dependent Undergrads (parents eligible for PLUS loans)||Subsidized||Total|
|Year 3 and above||$5,500||$7,500|
Dependent Undergrads (parents not eligible for PLUS loans)
|Year 3 and above||$5,500||$12,500|
Federal Direct PLUS loans are different from other federal direct loans. There are meant for parents with dependent undergraduate students and graduates as well. Moreover, PLUS loans don’t have a specific limit because it depends on the cost of attendance of a school to disburse funds. Even at this, it does require a credit check instead of a specific credit score. The cost of attendance involves the cover the cost of tuition, room and board, books, and living expenses.
Federal Direct Unsubsidized loans are designed for undergraduate and graduate students without minding the financial need. Unlike PLUS loan, this loan has limits that you can borrow.
Private Student Loan
Private student loans are available to anyone starting from undergraduate to graduate, to parents, as long as they can meet the requirement. For instance, Credit Check.
Private student loans can be offered by banks, credit unions, and financial institutions. As a result of different lenders, the limits vary by lender and also influenced by the cost of attendance at the school you or your school.