How unsubsidized student loans work
Unsubsidized and subsidized student loans have different borrowing limits that depend on your year in school and dependency status. Assuming you qualify for both loan types, first-year dependent students can borrow as much as $5,500 in federal student loans with as much as $3,500 in subsidized loans. On the other end of the spectrum, independent students in their third year and beyond can borrow as much as $12,500, with as much as $5,500 in subsidized loans.
So, if you're a third-year independent student and qualify for subsidized loans, you could obtain $5,500 in subsidized loans and a $7,000 unsubsidized loan. On the other hand, even if you don't qualify for subsidized loans, you can still borrow $12,500 for the year -- it will just be in the form of unsubsidized loans.
Under the current Department of Education rules, graduate and professional students can only qualify for unsubsidized loans, regardless of financial need, and there's an annual limit of $20,500.
There are also aggregate loan limits -- in other words, you can't simply stay in school indefinitely and borrow the maximum year after year. These are:
- For dependent undergraduates, a maximum of $31,000 in federal direct loans with as much as $23,000 in subsidized loans.
- For independent undergraduates, a maximum of $57,500 in federal direct loans with as much as $23,000 in subsidized loans.
- For graduate or professional students, a maximum of $138,500 in federal direct loans, including any loans received for undergraduate study.
Finally, if these borrowing limits don't cover the full cost of attendance, there are other borrowing options. Students and their parents can look into private student loans as well as PLUS loans, both of which can be made for as much as the entire cost of attendance.
