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How much can I borrow in student loans?

Andrew Goldman

Andrew Goldman has been writing for over 20 years and investing for the past 10 years. He currently writes about personal finance and investing for Wealthsimple. Andrew's past work has been published in The New York Times Magazine, Bloomberg Businessweek, New York Magazine and Wired. Television appearances include NBC's Today show as well as Fox News. Andrew holds a Bachelor of Arts (English) from the University of Texas. He and his wife Robin live in Westport, Connecticut with their two boys and a Bedlington terrier. In his spare time, he hosts “The Originals" podcast.

With the sticker price for a four-year private college at about $51,000 a year you’re probably going to need a significant cash infusion to get yourself graduated. But exactly how much can you borrow?

How’s this for a satisfying answer: it really depends. All vagaries will be determined by the information contained in your FAFSA, or Free Application for Federal Student Aid, which is, coincidentally the only free thing involving your college education you may ever undertake. If the government decides that you’re an independent student, meaning, you fit at least one major criterion, such as age, marital status, and whether you support kids of your own, you’ll be able to borrow a lot more, specifically, as much as $57,500 as an undergraduate, or $138,500 if you’re a grad student or are seeking a professional degree. Independent though they may behave, students who are still living under their parents’ roof and eating freely of mom-provided Cap’n Crunch, are considered dependant students, and will be limited to taking $31,000 in loans for their entire undergrad education. (These amounts are not evenly dispersed through your education; as you can see here, the longer you’re in school, the higher your annual loan limit will be.)

And just because the government says you can borrow that much doesn’t mean that you will be able to; once you get admitted to school, your future alma mater will use your FAFSA stats to determine your financial aid package—which in addition to grants and scholarships includes how much of the student loan max you’ll be entitled to borrow. So it will pay to not be a jerk to the folks in the financial aid office.

Ideally, you’ll want to take as much of your loans as possible from the Department of Education in so called direct subsidized loans — loans in which the government pays the loan interest as long as you’re enrolled in school. These loans are very specifically need based. Direct unsubsidized loans are available to anyone, regardless of need, and the unsubsidized bit means you’ll be expected to pay the interest for the duration of the loan term, though you’ll be able to defer any payments until after you’ve finished school. Apart from generally offering lower interest rates than banks, government loans are particularly appealing if you have any inkling that you might seek a non-profit or government career; if you make ten years worth of timely payments on a qualifying government student loan while working as a fireman, a city planner, or grant writer for a 501(c)(3) nonprofit, the remainder of your loan balances will be forgiven.

Last Updated August 1, 2018

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