Rights & Responsibilities
Federal Loan Basics
Did you know that all students (who qualify) are eligible for student loans to cover their academic program balance each year?
There are limits to what each student is eligible for and each school will advise the student on which program and loan are best.
According to the Dept. of Education, here are the current loan limits based on two types of students; Dependent & Independent.
By Year
Dependent Students (except students whose parents are unable to obtain Parent PLUS Loans)
Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
First-Year Undergraduate Annual Loan Limit
Dependent: $5,500-No more than $3,500 of this amount may be in subsidized loans.
Independent: $9,500-No more than $3,500 of this amount may be in subsidized loans.
Second-Year Undergraduate Annual Loan Limit
Dependent: $6,500-No more than $4,500 of this amount may be in subsidized loans.
Independent: $10,500-No more than $4,500 of this amount may be in subsidized loans.
Third-Year and Beyond Undergraduate Annual Loan Limit
Dependent: $7,500 per year-No more than $5,500 of this amount may be in subsidized loans.
Independent: $12,500-No more than $5,500 of this amount may be in subsidized loans.
The following loans are for students seeking their GRADUATE degree (after Bachelor’s degree).
Graduate or Professional Student Annual Loan Limit
Not Applicable (all graduate and professional degree students are considered independent).
$20,500 (unsubsidized only).
Click on the image below to view the Life-Time maximum loan limits.
Subsidized and Unsubsidized
Aggregate MAX Loan Limits - 🔗 Federal Loans
DEPENDENT:
$31,000 -No more than $23,000 of this amount may be in subsidized loans.
INDEPENDENT:
$57,500 for undergraduates-No more than $23,000 of this amount may be in subsidized loans.
GRADUATE: 🔗 Aggregate Loan Limits
$138,500 for graduate or professional students-No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.
Grace Period
Did you know that a student has a Grace Period from the time they finish school or drop below half-time enrollment before beginning repayments?
This means that your federal loans allow for a short break between school and the beginning of the repayment of loans.
According to Dept of Education, “Once you graduate, drop below half-time enrollment, or leave school, your federal student loan goes into repayment. However, if you have a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, you have a six-month grace period before you are required to start making regular payments. You’ll have a nine-month grace period if you’ve got a Perkins Loan. (Got a PLUS loan? You’ll go into repayment as soon as the loan is fully disbursed—which means once it’s paid out. But if you’re a graduate and professional student PLUS borrower, you will be placed on an automatic deferment while in school and for six months after graduating, leaving school, or dropping below half-time enrollment.)”
This six-month Grace period was created to allow a student to begin working and situate their budgets to begin repayment of their federal loans.
For certain types of federal student loans, a period of time after you graduate, withdraw from school, or drop below half-time enrollment when you are not required to make payments. You are responsible for paying the interest that accrues on unsubsidized loans during the grace period. If the interest is unpaid, it will be added to the principal balance of the loan (capitalized) when the repayment period begins.
Parent PLUS Loan
Did you know that there is a federal for Parents of Dependent students?
It is called a PLUS loan, it was created to allow parents to help pay for college or career school.
Unlike federal loans for students, a PLUS loan is credit-based and will be the responsibility of the parent taking the loan.
Repayment
The Dept of Education has different repayment plans available. in some cases, a student will need to qualify for a certain repayment plan.
To view the different plans, click on Standard to view all repayment plans.
Did you know that you can ask for assistance if you are having problems making your loan payment?
Contact your loan servicer as soon as possible. You may be able to change your repayment plan to one that lowers your monthly payment and, in some cases, may be based on your income. You can also ask your loan servicer about your options for a deferment or forbearance or loan consolidation.