Student Loans: How Much Can You Borrow?

The cost of a college education is rising to astronomical prices, leaving many students wondering about student loan borrowing limits. The answer depends on several factors, including your academic progress, your tax status as a dependent, and the type of loan you want.

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An infographic defining and explaining the four types of federal student loans. — Image source: The Motley Fool.

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Direct Loans

Direct Loans are federal student loans made directly by the U.S. Department of Education to students or parents.

Direct Subsidized Loans

A direct subsidized loan is available to undergraduate students with financial need, as determined by the Free Application for Federal Student Aid (FAFSA). The subsidy comes in the form of the Department of Education paying the interest expense while the borrower is enrolled in school. There's also a grace period after graduation.

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Subsidized Student Loans

A subsidized student loan is a type of federal student loan that is designed to help borrowers with demonstrated financial need pay for college.

The amount you can borrow for a direct subsidized loan is based solely on your financial need. Your financial need is determined by factors that include your family's income and assets and the cost of attending your school. Additionally, there's a cap you cannot exceed on federal student loan borrowing, regardless of financial need.

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Direct Unsubsidized Loans

Direct unsubsidized loans are available to anyone enrolled at least half-time in college. There's no need to demonstrate financial need. However, interest will accrue throughout your time as a student, so you'll graduate with a higher loan balance than the amount you borrowed.

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Unsubsidized Student Loans

Unsubsidized student loans are a form of student loan where the borrower is responsible for paying all interest that accumulates, even when in school or on a deferment.

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Borrowing limits for subsidized and unsubsidized student loans. Data source: studentaid.gov.

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There are also aggregate borrowing limits for student loans.

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Aggregate borrowing limits for student loans. Data source: studentaid.gov.

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However, with the rising cost of tuition at some private universities, you may also need to get a private student loan. The limits may be higher, but the interest rates are usually less favorable for private student loans, and repayment terms aren't very attractive.

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Subsidized and Unsubsidized Student Loans: Explained and Compared

Here's what borrowers need to know about the two main types of federal student loans: subsidized and unsubsidized.

How to Consolidate and Refinance Your Student Loans

Student loan consolidation allows you to roll your student loans into one, but it's not the same as refinancing.

Student Loan Penalties: A Complete Guide

While there are no penalties for paying student loans early, borrowers can be charged fees for not paying student loans on time.

How Military Student Loan Forgiveness Works in 2025

Military student loan forgiveness programs can help those who have served reduce their loan balance, but not everyone qualifies.

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The cost of taking on debt is an important consideration when deciding how to pay for school. Be sure you and your family can afford the loan payments along with other education costs.

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About the Author

Adam Levy is a contributing Motley Fool stock market analyst covering technology, consumer, and financial stocks and how policy, economic, and consumer trends shape personal finance, Social Security and retirement savings. Before The Motley Fool, Adam was a financial advisor at Edward Jones. He studied finance and electrical engineering at Carnegie Mellon University.

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