Federal student loans have fastened annual and combination loan limits, which have an effect on the utmost quantity a student can borrow from the federal student loan packages. Federal student loans are additionally topic to price of attendance caps that stop students from receiving student assist and student loans that collectively exceed the faculty’s whole price.
Federal student loans even have cut-off dates that have an effect on the variety of tutorial years for which you’ll borrow, based mostly on the traditional size of your tutorial program.
Loan limits for federal student loans are set by regulation. The Higher Education Act of 1965 specifies the annual and combination loan limits for each federal student loan program. These loan limits are up to date often by Congress, usually as a part of reauthorization of the Higher Education Act. Congress final elevated the loan limits on federal student loans in 2008.
Cost of Attendance Cap
Federal student loans might not exceed the faculty’s price of attendance (COA) minus different assist obtained. This is also known as a COA – Aid cap or as a price of attendance cap.
In impact, the student can’t borrow greater than it prices to attend the faculty.
Use our Student Loan Calculator to find out the month-to-month loan cost and whole funds in your student loans.
The Federal Direct Stafford loan has fastened annual loan limits along with the price of attendance cap. The Federal Direct PLUS loan doesn’t have fastened annual limits along with the price of attendance cap.
Annual Loan Limits
The Federal Direct Stafford loan’s annual loan limits are based mostly on the student’s diploma degree, dependency standing, and 12 months in class.
The backed Federal Direct Stafford loan, which is accessible solely to undergraduate students, has a decrease annual loan restrict than the general Federal Direct Stafford loan. Anything that the student doesn’t get as a backed loan may be borrowed as an unsubsidized loan, as much as the general loan limits.
The backed Federal Direct Stafford loan has the identical annual loan limits for each dependent and unbiased students.
The annual limits for the backed Federal Direct Stafford loan are $3,500 for freshmen, $4,500 for sophomores, $5,500 for juniors and $5,500 for seniors.
The Federal Direct Stafford loan has totally different general annual loan limits for dependent and unbiased student. A dependent student can qualify for the upper annual loan limits out there to unbiased students if their mum or dad is denied a Federal Direct PLUS loan as a result of the mum or dad has an hostile credit historical past.
- Dependent Students: $5,500 for freshmen, $6,500 for sophomores, $7,500 for juniors and $7,500 for seniors
- Independent Students: $9,500 for freshmen, $10,500 for sophomores, $12,500 for juniors and $12,500 for seniors
- Graduate Students: $20,500 per 12 months ($40,500 for well being professions students)
The larger general annual loan limits implies that all undergraduate students, even those that obtain backed Federal Direct Stafford loans, can borrow at the very least $2,000 a 12 months in unsubsidized Federal Direct Stafford loans.
Although students should be enrolled on at the very least a half-time foundation to obtained federal student loans, the loan limits usually are not in any other case adjusted by the student’s enrollment standing. Half-time students get the identical annual loan limits as full-time students.
Among students enrolled in Bachelor’s diploma packages, about half of debtors (54%) borrow lower than the annual most, 41% borrow the same old most and 5% borrow the distinctive most, based mostly on knowledge from the 2015-2016 National Postsecondary Student Aid Study (NPSAS). The distinctive most refers to dependent students whose dad and mom have been denied the Federal Parent PLUS loan.
Aggregate Loan Limits
The Federal Direct Stafford loan’s combination loan limits are based mostly on the student’s diploma degree and dependency standing.
The backed Federal Direct Stafford loan has an combination restrict of $23,000.
The general Federal Direct Stafford loan has an combination restrict of $31,000 for dependent students and $57,500 for unbiased students and dependent students whose mum or dad was denied a Federal Parent PLUS loan.
The combination loan restrict for graduate students is $138,500 ($224,000 for well being professions students), together with undergraduate loans.
Reaching these combination limits requires undergraduate students to borrow for greater than 4 years. The sum of the general annual loan limits for 4 years of Federal Direct Stafford loans are $27,000 for dependent undergraduate students and $45,000 for unbiased undergraduate students. The sum of 4 years of annual loan limits for the backed Federal Direct Stafford loan is $19,000.
The Federal Direct PLUS loan has no combination limits.
There are two cut-off dates that have an effect on the variety of years for which a student can borrow, one for all federal student loans and one for backed Federal Direct Stafford loans.
To qualify for continued receipt of federal student assist, together with federal student loans, the student should be making Satisfactory Academic Progress (SAP). In addition to sustaining at the very least a 2.0 GPA on a 4.0 scale, the student should be on monitor to graduate inside 150% of the traditional timeframe.
The regular timeframe for a Bachelor’s diploma is 4 years, so 150% of the traditional timeframe is six years. For affiliate’s levels the utmost timeframe limitation is three years. As quickly as it’s clear that the student gained’t have the ability to graduate inside the most timeframe limitation, the student loses additional eligibility for federal student assist.
The backed Federal Direct Stafford loan has an analogous most timeframe limitation for debtors who haven’t any excellent student loans previous to July 1, 2013, however with just a few twists.
- The most eligibility interval is 150% of the traditional timeframe for the diploma program, however counts solely tutorial phrases throughout which the student obtained a backed Federal Direct Stafford loan.
- The time interval that counts in opposition to the utmost eligibility interval is prorated based mostly on enrollment standing.
- When the student reaches the utmost eligibility interval, the curiosity on their backed Federal Direct Stafford loans turns into unsubsidized and the federal authorities will now not pay the curiosity throughout deferments.
If you have got reached the boundaries of your federal student loan eligibility however nonetheless want extra money to complete your diploma, personal student loans might present extra flexibility.