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If you need to borrow money to pay for college, federal student loans are usually your first choice. Federal student loans are generally more affordable than private student loans and offer generous repayment plan options.
However, the government places limits on how much you can borrow from schools (at least for some students).
Let’s take a look at student loan limits for 2023 and what to do if you need more money.
student loan limit 2023
The amount you can borrow depends on several factors. These include:
- how advanced are you in your education
- Whether you are a dependent student
Dependent students are listed on someone else’s tax return and tend to have lower borrowing limits.
Here’s a breakdown of student loan limits for 2023:
Dependent Student: Direct Loan Loan Limit
Direct loans, also known as Stafford loans, have borrowing limits based on dependency.
There are two types of direct loans. With subsidized direct loans, the federal government will cover your interest payments until you graduate or the grace period ends. In contrast, an unsubsidized loan means you are responsible for interest that begins accruing on the loan as soon as you take out the loan.
As a dependent student, the amount you can borrow is:
Annual borrowing limit for dependent students |
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2nd year undergraduate |
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Undergraduate 3rd year (Applies to graduate school 3rd year) |
Additionally, you should keep in mind your total lending limit.At the time of writing, you can borrow up to $31,000 in federal student loansOf this total, however, only $23,000 can be subsidized loans.
Independent Students: Loan Limits for Direct Loans
Independent students do not appear on anyone else’s tax returns. Based on this distinction, dependent students or more can be borrowed.
Please note that dependent students whose parents were unable to obtain a PLUS loan may also take advantage of these higher loan limits.
Total annual borrowing limit for independent students |
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2nd year undergraduate |
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Undergraduate 3rd year (Applies to graduate school 3rd year) |
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graduate school or vocational school |
The total limit is also higher for independent students. Currently, independent students can borrow up to $57,500 for their undergraduate education. However, only her $23,000 of this amount will be a subsidized loan.
PLUS Loan Limit
Parents of undergraduate students can take advantage of the Parent PLUS Loan. Funds from loans can help fund your child’s education.
Graduate students can also take out Grad PLUS loans.
at this point PLUS loans have no borrowing limitsHowever, you cannot borrow more than the tuition fee. Please contact your child’s school if you have questions about attendance costs or eligible financial assistance.
How to stay below the limit
For some, federal student loan limits provide enough breathing room.
However, some may feel pressured to borrow more. If you’re worried about needing to borrow more, here are some tips for minimizing student loan debt.
- Please select the appropriate school: A college education is never cheap, but some schools are more affordable than others. Consider the cost of education in addition to finding the right school to meet your graduation goals.
- Consider all options. You don’t necessarily have to go to an expensive school for four years. If cost is a concern, consider attending community college for her first two years.
- Consider long-term goals. Your big dreams are unlikely to end in college. Whatever your long-term goals, a hefty student loan burden can only hold you back. If there is an opportunity to reduce costs, take advantage of it.
- Increase your income: Even if you are a student, you can find ways to increase your income. Whether you start a traditional part-time job or take a side job while in school, increasing your income can help you avoid extra student loan debt.
College is definitely expensive. But with a little smarts on the financial side, you can avoid hitting the federal student loan limit.
What to do if you need to borrow more
You can’t always be creative. Federal student loans aren’t the only solution if you need to borrow more money to cover your education costs. Private student loans are also an option for students.
Private student loans generally have higher interest rates. But you don’t face the same borrowing limits you see with federal student loans.
If you need to take out a private student loan, take your time and compare all the options. Do your research and find a moneylender that offers relatively low interest rates and terms that you are comfortable with.
Some considerations are:
- your repayment schedule
- borrower protection
- Lending period
For example, some lenders allow you to start making payments after you graduate.
Need help buying a private student loan? See today’s top options.
Conclusion
Federal student loan limits may mean you need to find creative ways to cover the rest of your education.
If possible, start a side business or a traditional part-time job to increase your income while in college. With a modest income, you can avoid taking out extra student loans. If you can’t balance coursework and income streams, private student loans can help fill the gap.