Getting a college education is an expensive endeavor, particularly if it involves postgraduate studies. However, if a student hopes to get a degree and the opportunity to make a good living, it's an expense that he will need to find a way to pay for. For many people, that means taking out expensive low-interest student loans. Although the interest rate on these loans is low, you will still wind up repaying much more than you borrowed.
FAFSA
The first step in determining how much money you can borrow for a school loan is to fill out the Free Application for Federal Student Aid (FAFSA). Schools use the FAFSA information to determine your financial aid package, including federal student loans. These may be either direct subsidized loans or direct unsubsidized loans. Unsubsidized loans are not made on the basis of financial need but subsidized loans are.
Limits
There are limits on how much you can borrow, not only each year but as a total amount. To some extent, the amount will be based on the cost of tuition at the college you are attending as well as other factors and could be less than the maximum amounts. You are able to combine subsidized and unsubsidized loans if the maximum amount you receive in an unsubsidized loan doesn't cover all of your education expenses.
Dependent Undergraduate Limits
In 2011, undergraduate students who can be claimed as a dependent on someone else's taxes can borrow a maximum of $5,500 during their first year of college with more than $3,500 being subsidized. These amounts increase by $1,000 for the second year of college and another $1,000 for the third year and beyond. The maximum debt you can borrow in federal student loans is $31,000, with no more than $23,000 being subsidized.
Independent Undergraduate Limits
Undergraduate students who are independent and cannot be claimed on someone else's taxes can borrow a maximum of $9,500 during their first year of college, with more than $3,500 being subsidized. These amounts increase by $1,000 for the second year of college. For the third year of college and beyond, you can borrow another $12,500 for the third year and beyond. The maximum debt you can borrow in federal student loans is $31,000, with no more than $23,000 being subsidized.
Graduate and Professional Limits
The maximum that can be borrowed annually for graduate and professional programs is $20,500 with no than $8,500 being subsidized. The total amount that can be borrowed is $138,500 with no more than $65,500 being subsidized. However, if you are studying certain health profession programs, you may be able to get additional unsubsidized loans beyond the limit. In this case, your total amount that you could borrow would be $224,500 with no more than $65,500 being subsidized.
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