If you’re trying to figure out how to pay for college or graduate school, you've probably wondered if there’s a limit to the amount you can take out in student loans.

Technically, no. Realistically, yes.

Federal loans, both subsidized and unsubsidized, have very strict limits. (Subsidized loans are need-based and proof of financial need is required; unsubsidized don’t have need requirements but your education costs must exceed the amount of financial aid awarded).

One of these loans is the Perkins Loan. The Perkins Loan has the lowest interest rate of any educational loan program, but it also has a low maximum available to borrow. For instance, in recent years, the maximum you could borrow each year with a Perkins was around $4,000, for a total limit of approximately $20,000. A graduate student could borrow around $6,000 with a total limit of $40,000.

Stafford Loans are also based on need formulas provided by your Free Application For Student Aid (FAFSA). The amounts you can borrow are also based – again – on whether you’re an undergraduate or graduate student and what in what year of school you’re enrolled. In recent years dependent undergraduate students could take out a maximum of around $2,600 during the first year of study, and increments of approximately a thousand more each year through the fourth year. Individuals who are designated independent – not financially dependent on their parents or anyone else – can borrow approximately $10,000 more dollars over the course of their approved program.


The borrowing limits are the same whether the Stafford Loan comes from the Federal Direct Loan Program (FDLP) or the FFELP (Federal Family Education Loan Program).

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The Federal PLUS loans can now provide funds to undergraduates, but the parents of the individual must take out the loan, and that individual must be classified as a dependent. Graduate school students can now take out PLUS loans without going through their parents. The PLUS is not need-based, but is limited to the cost of your yearly enrollment minus whatever other financial aid amount you already have.

Private loans usually have a much higher maximum available to borrow, but it is based on your individual creditworthiness, combined with whatever your school budget is, (and this is usually provided by the school itself). Some students may need $100,000 in tuition monies, but previous or current debts or defaults may prevent the private lender from taking this much of a risk. Conversely, someone with excellent credit (or who has parents with excellent credit who take the loan out for them) may qualify for $100,000 or more, but need only $2,000 a year to cover their school expenses.