If you need to borrow money to pay for college, federal student loans are often your first choice. Federal student loans are generally more affordable than private student loans and offer generous repayment plan options, including loan forgiveness!
However, the government sets limits on how much you can borrow for school (at least for some students).
Let’s explore the 2023 student loan borrowing limits and what happens if you need more money.
Student Loan Loan Limits 2023
The amount you can borrow varies depending on a few factors. These include:
- How far along you are in your education
- Whether or not you are a dependent student
Dependent students are listed on someone else’s tax returns, which tend to have lower loan limitations.
Here’s the breakdown of student loan borrowing limits for 2023.
Dependent students: loan limits for direct loans
Direct loans, also known as Stafford loans, have set loan limits based on your dependency status.
Direct loans come in two flavors. Direct subsidized loans involve the federal government covering your interest payments until you graduate or reach the end of your deferment period. By contrast, unsubsidized loans mean that you are responsible for the interest that begins to accrue on the loan as soon as you apply.
As a dependent student, this is what you can borrow.
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Total annual loan limit for dependent students |
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sophomore degree |
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Third Year Undergraduate (applies to subsequent graduate years) |
Also, you will need to take into account the added loan limit. At the time of writing, you can borrow up to $31,000 in federal student loans. But only $23,000 of this total amount can be subsidized loans.
Independent Students: Loan Limits for Direct Loans
Independent students don’t show up on anyone else’s tax returns. Based on this distinction, you can borrow from more dependent students.
Keep in mind that dependent students whose parents were unable to obtain PLUS Loans can also take advantage of these higher loan limits.
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Total annual loan limit for independent students |
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sophomore degree |
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Third Year Undergraduate (applies to subsequent graduate years) |
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Graduate or Professional School |
The aggregate limit is also higher for independent students. Currently, independent students can borrow up to $57,500 for their college education. However, only $23,000 of this amount can be subsidized loans.
PLUS loan limits
Parents of a college student have the option of obtaining a Parent PLUS Loan. Loan proceeds can help you finance your child’s education.
Graduate students can also get a Grad PLUS loan.
At the moment, PLUS loans do not have set loan limits. However, you cannot borrow more than the cost of attendance. If you have questions about the cost of attendance or any qualifying financial aid, please contact your child’s school.
How to stay below the limits
For some, the borrowing limits on federal student loans offer a lot of breathing room.
But others may feel the pressure to borrow more. If you’re concerned about the need to borrow more, here are some tips to help you minimize student loan debt:
- Choose the right school: While a college education is never cheap, some schools are more affordable than others. In addition to finding the right school to meet your graduation goals, consider the cost of your education.
- Consider all your options: You don’t have to go to an expensive school for four years. If you are concerned about cost, consider attending a community college for your first two years.
- Consider your long-term goals: Your big dreams are unlikely to end with college. Regardless of your long-term goals, a heavy student loan load will likely only hold you back. If you have an opportunity to cut costs, take it.
- Increase your income: Even as a student, you can find ways to increase your income. Whether you choose a traditional part-time job or work a side job during school, increasing your income can help you avoid taking on additional student loan debt.
College is undeniably expensive. But with a little financial creativity, you could avoid reaching the federal student loan borrowing limit.
What to do if you need to borrow more
It is not always feasible to be creative. If you need to borrow more money to cover your education, federal student loans aren’t the only solution. Private student loans are also an option for students.
In general, private student loans have higher interest rates. But you won’t face the same borrowing limitations you encounter with federal student loans.
If you need to get private student loans, take the time to compare all of your options. Shop around to find a lender that offers relatively low rates and terms that you’re comfortable with.
Some considerations include:
- Your payment schedule
- Borrower Protections
- loan term
For example, some lenders allow you to start making payments after you graduate.
Want help buying a private student loan? Explore the best options today.
The bottom line
Federal student loan borrowing limits may mean you need to find a creative way to finance the remaining cost of your education.
If possible, increase your income during college by choosing a side job or a traditional part-time job. With some income, you can avoid taking out additional student loans. If you can’t balance your studies with a stream of income, private student loans can help you make up the difference.