Federal student loans have fixed annual and aggregate loan limits, which affect the maximum amount a student can borrow from the federal student loan programs. Federal student loans are also subject to cost of attendance caps that prevent students from receiving student aid and student loans that together exceed the college’s total cost.
Federal student loans also have time limits that affect the number of academic years for which you can borrow, based on the normal length of your academic program.
Loan limits for federal student loans are set by law. The Higher Education Act of 1965 specifies the annual and aggregate loan limits for every federal student loan program. These loan limits are updated occasionally by Congress, often as part of reauthorization of the Higher Education Act. Congress last increased the loan limits on federal student loans in 2008.
Cost of Attendance Cap
Federal student loans may not exceed the college’s cost of attendance (COA) minus other aid received. This is often referred to as a COA – Aid cap or as a cost of attendance cap.
In effect, the student cannot borrow more than it costs to attend the college.
Use our Student Loan Calculator to determine the monthly loan payment and total payments on your student loans.
The Federal Direct Stafford loan has fixed annual loan limits in addition to the cost of attendance cap. The Federal Direct PLUS loan does not have fixed annual limits in addition to the cost of attendance cap.
Annual Loan Limits
The Federal Direct Stafford loan’s annual loan limits are based on the student’s degree level, dependency status, and year in school.
The subsidized Federal Direct Stafford loan, which is available only to undergraduate students, has a lower annual loan limit than the overall Federal Direct Stafford loan. Anything that the student doesn’t get as a subsidized loan can be borrowed as an unsubsidized loan, up to the overall loan limits.
The subsidized Federal Direct Stafford loan has the same annual loan limits for both dependent and independent students.
The annual limits for the subsidized Federal Direct Stafford loan are $3,500 for freshmen, $4,500 for sophomores, $5,500 for juniors and $5,500 for seniors.
The Federal Direct Stafford loan has different overall annual loan limits for dependent and independent student. A dependent student can qualify for the higher annual loan limits available to independent students if their parent is denied a Federal Direct PLUS loan because the parent has an adverse credit history.
- Dependent Students: $5,500 for freshmen, $6,500 for sophomores, $7,500 for juniors and $7,500 for seniors
- Independent Students: $9,500 for freshmen, $10,500 for sophomores, $12,500 for juniors and $12,500 for seniors
- Graduate Students: $20,500 per year ($40,500 for health professions students)
The higher overall annual loan limits means that all undergraduate students, even those who receive subsidized Federal Direct Stafford loans, can borrow at least $2,000 a year in unsubsidized Federal Direct Stafford loans.
Although students must be enrolled on at least a half-time basis to received federal student loans, the loan limits are not otherwise adjusted by the student’s enrollment status. Half-time students get the same annual loan limits as full-time students.
Among students enrolled in Bachelor’s degree programs, about half of borrowers (54%) borrow less than the annual maximum, 41% borrow the usual maximum and 5% borrow the exceptional maximum, based on data from the 2015-2016 National Postsecondary Student Aid Study (NPSAS). The exceptional maximum refers to dependent students whose parents were denied the Federal Parent PLUS loan.
Aggregate Loan Limits
The Federal Direct Stafford loan’s aggregate loan limits are based on the student’s degree level and dependency status.
The subsidized Federal Direct Stafford loan has an aggregate limit of $23,000.
The overall Federal Direct Stafford loan has an aggregate limit of $31,000 for dependent students and $57,500 for independent students and dependent students whose parent was denied a Federal Parent PLUS loan.
The aggregate loan limit for graduate students is $138,500 ($224,000 for health professions students), including undergraduate loans.
Reaching these aggregate limits requires undergraduate students to borrow for more than four years. The sum of the overall annual loan limits for four years of Federal Direct Stafford loans are $27,000 for dependent undergraduate students and $45,000 for independent undergraduate students. The sum of four years of annual loan limits for the subsidized Federal Direct Stafford loan is $19,000.
The Federal Direct PLUS loan has no aggregate limits.
Time Limits
There are two time limits that affect the number of years for which a student can borrow, one for all federal student loans and one for subsidized Federal Direct Stafford loans.
To qualify for continued receipt of federal student aid, including federal student loans, the student must be making Satisfactory Academic Progress (SAP). In addition to maintaining at least a 2.0 GPA on a 4.0 scale, the student must be on track to graduate within 150% of the normal timeframe.
The normal timeframe for a Bachelor’s degree is four years, so 150% of the normal timeframe is six years. For associate’s degrees the maximum timeframe limitation is three years. As soon as it is clear that the student won’t be able to graduate within the maximum timeframe limitation, the student loses further eligibility for federal student aid.
The subsidized Federal Direct Stafford loan has a similar maximum timeframe limitation for borrowers who have no outstanding student loans prior to July 1, 2013, but with a few twists.
- The maximum eligibility period is 150% of the normal timeframe for the degree program, but counts only academic terms during which the student received a subsidized Federal Direct Stafford loan.
- The time period that counts against the maximum eligibility period is prorated based on enrollment status.
- When the student reaches the maximum eligibility period, the interest on their subsidized Federal Direct Stafford loans becomes unsubsidized and the federal government will no longer pay the interest during deferments.
If you have reached the limits of your federal student loan eligibility but still need more money to finish your degree, private student loans may provide more flexibility.
