Did you know that student loan lifetime limits exist? There are in fact maximum borrowing limits for both Federal student loans and private financing. This can make paying for the entirety of your college costs all that more confusing, especially if you aren’t well aware of these lifetime limits right from the beginning of your college career.
To make sure you’re on track for covering your school costs, let’s go over what the limits are on how much you can borrow from the two main types of student loans, Federal and private.
The Student Loan Lifetime Limits for Federal Student Loans
The first thing to understand is that your limits will vary. There are a number of factors, like the cost of your individual school and the type of loans you have, that affect your maximum borrowing limit.
It is also essential to keep in mind that you may be eligible to borrow above your frustrated limit if you repay some of the loans you currently have. However, you will never be allowed to borrow more Federal student loan money than is required to cover the established cost of attending school.
With those two essential things in mind, the Federal Student Aid Office does have defined maximum borrowing limits. Again, your limit may be less than these depending on your individual situation.
For undergraduate students defined as dependent, the maximum borrowing limit is $31,000. Of that total amount, only $23,000 may be subsidized loans.
For undergraduate students defined as independent, that maximum limit is $57,000. The limit on subsidized loans remains at $23,000.
Graduate school students are always considered independent. These students have a Federal student loan borrowing limit of $138,500. Of that total, only $65,500 may come from subsidized loans. Graduate students have another factor to keep in mind, which is that the total limit on the Federal student loan amount will still include loans from when they were an undergraduate. This means you may hit your student loan lifetime limits sooner if you also received Federal student loans while receiving your undergraduate degree.
Private Student Loans: The Student Loan Lifetime Limits
The lifetime limits for private student loans are set by the financial institution issuing the loan. There is no law about how much a bank or credit union may loan to a student for covering their expenses. Still, every institution will have their own lifetime limit.
As with any private loan, there are a number of factors the lender will take into consideration when deciding how much to grant for a loan.
For example, what is your credit history? Many students will need a cosigner to overcome a lack of credit history and employment.
The lender will also likely look at what you’re studying and what field you are likely to go into for work after graduation. If you are likely to obtain a job in a field that pays more, they’ll be more likely to lend you a higher amount.
They will also consider the cost of your attendance. Like with Federal student loans, the lender is unlikely to offer you more financing that you need to cover the entire cost of your college attendance.
Covering The Costs Of Attending College
Many students will not receive enough financial aid or Federal student loans to cover all their expenses while attending college. While merit-based scholarships are another option for receiving more funding, most students will need to also look into private student loans to cover the costs of their education, especially if they reach the student loan lifetime limits set by the Department of Education for Federal student loans. Fortunately, the limits on Federal student loans do not impede students from seeking out private funding as well to cover all of their expenses.