Student loans cover the gap between the cost of college and what you’re able to pay out of pocket. While student loans can cover quite a bit, they do have limits.
There are two main types of student loans: federal and private. The borrowing limit for each type of loan will depend on various factors.
Federal Student Loan Borrowing Limits
The borrowing limit for federal student loans depends on:
- Your dependency status
- Your year in school
- The type of loan
Dependency Status
A dependent student is one who relies on another, typically a parent(s), as another source of income. If your parent(s) claim you as a dependent, their income is factored into your Expected Family Contribution. Thus, you may receive less financial aid than if you filed as an independent student.
An independent student is one who does not rely on another person as a source of income. There are specific conditions a student needs to meet to be considered an independent. The student must be at least one of the following:
- At least 24 years old
- Married
- A veteran or member of the armed forces
- A graduate or professional student
- An orphan
- A ward of the court
- An individual with legal dependents other than a spouse
- An emancipated minor
- An individual who is homeless or at risk of becoming homeless
Independent students tend to receive more financial aid than dependent students.
Undergraduate Federal Student Loan Limits
There are two types of undergraduate federal student loans: subsidized and unsubsidized. Federal subsidized loans are given out based on financial need. Federal unsubsidized loans are given out based on the overall cost of attendance (COA) minus any financial aid the student has already received.
How Subsidized Loan Amounts are Determined
When you complete the FAFSA, your financial information will help determine your Expected Family Contribution (EFC). Financial aid staff will subtract your EFC from the overall cost of attendance (COA) at your respective school to determine your financial need. The result of this equation will determine how much need-based aid you are eligible for.
For example, if the COA at the school is $20,000 and your EFC is $9,000, your financial need is $11,000. Thus, you won’t be eligible for more than $11,000 in need-based aid.
How Unsubsidized Loan Amounts are Determined
After need-based aid is given, your eligibility for non-need-based aid will be determined. To do this, financial aid staff will subtract the amount of financial aid awarded so far from the overall COA.
For example, if the COA at the school is $20,000 and you’ve been awarded a total of $9,000 in need-based aid and scholarships, you are eligible for up to $11,000 in non-need-based aid.
While dependent and independent students can borrow both subsidized and unsubsidized loans, independent students are typically able to borrow more in unsubsidized loans.
The borrowing limits for federal undergraduate student loans are as follows:
Dependent Undergraduate Students
First Year: $5,500 ($3,500 subsidized, $2,000 unsubsidized)
Second Year: $6,500 ($4,500 subsidized, $2,000 unsubsidized)
Third Year and Beyond: $7,500 ($5,500 subsidized, $2,000 unsubsidized)
Total Limit Over the Course of Your Entire Education: $31,000 ($23,000 subsidized, $7,000 unsubsidized)
Independent Undergraduate Students
First Year: $9,500 ($3,500 subsidized, $6,000 unsubsidized)
Second Year: $10,500 ($4,500 subsidized, $6,000 unsubsidized)
Third Year and Beyond: $12,500 ($5,500 subsidized, $7,000 unsubsidized)
Total Limit Over the Course of Your Entire Education: $57,500 ($23,000 subsidized, $34,500 unsubsidized)
Graduate Federal Student Loan Limits
As of July 1, 2012, the Department of Education no longer offers subsidized loans for graduate students. Graduate students are, however, eligible for unsubsidized loans.
Graduate students can borrow up to $20,500 in unsubsidized federal loans per year. There is a lifetime limit of $138,500 for borrowing which includes undergraduate loans.
So, let’s say that as an undergraduate student, you borrowed $30,000 in federal student loans. As a graduate student, you would only be eligible for up to $108,500 in graduate student loans.
Important Notes
In order to be eligible for any federal student loan, regardless of year or dependency status, you must complete the FAFSA. For a complete guide on how to complete the FAFSA, check out this article.
Private Student Loan Borrowing Limits
Because each private lender is its own individual entity, each one will have its own unique borrowing limit. Most private student lenders will cover the total cost of attendance. Others have specific limits, some reaching $500,000.
To see what you qualify for with each lender, complete the Sparrow application. The following are the lenders we partner with and their respective borrowing limits:
Undergraduate and Graduate Student Loans
Arkansas Student Loan Authority
Annual limit: School-certified COA minus financial aid
Lifetime limit: $100,000
Annual limit: School-certified COA minus financial aid
Lifetime limit: $200,000
Annual limit: School-certified COA minus financial aid
Lifetime limit: $20,000
Annual limit: School-certified COA minus financial aid
Lifetime limit: Does not disclose
Annual limit: School-certified COA minus financial aid
Lifetime limit: School-certified COA minus financial aid
Annual limit: School-certified COA minus financial aid
Lifetime limit: School-certified COA minus financial aid
Annual limit: School-certified COA minus financial aid
Lifetime limit: School-certified COA minus financial aid
Annual limit: $15,000
Lifetime limit: Does not disclose
ISL Education Lending
Annual limit: School-certified COA minus financial aid
Lifetime limit: $100,000
Annual limit: School-certified COA minus financial aid
Lifetime limit: School-certified COA minus financial aid
Per semester limit: $25,000
Annual limit: $50,000
Lifetime limit: Does not disclose
Annual limit: Does not disclose
Lifetime limit: $125,000 for undergraduates; $500,000 for graduates
Annual limit: Does not disclose
Lifetime limit: $220,000
Annual limit: School-certified COA minus financial aid
Lifetime limit: School-certified COA minus financial aid
Annual limit: School-certified COA minus financial aid
Lifetime limit: School-certified COA minus financial aid
Refinance Loans
Arkansas Student Loan Authority
Refinance limit: $250,000
Refinance Limit: $400,000
Refinance limit: $300,000, depending on degree type
Refinance limit: $500,000
EDvestinU
Refinance limit: $200,000
Refinance limit: $300,000, depending on degree type
Refinance limit: $500,000, depending on degree type
Refinance limit: up to the total outstanding balance
Final Thoughts from the Nest
Depending on what type of student loan you need, your year in school, and your dependency status, the borrowing limit will vary. To see what you’re eligible to borrow from top private student lenders complete the Sparrow application.
Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.