The cost of attending college continues to rise, and for many students, paying for their education requires borrowing. A variety of federal student loans are available through the U.S. Department of Education, while private loans are offered by banks and other lenders. Each loan comes with a different set of parameters and qualifications that dictate whether and how much students can borrow.
Learn more about how much you can borrow from each student loan program, along with alternative ways to pay.
[Read: Best Private Student Loans.]
What Is the Maximum Amount I Can Borrow?
Regardless of the type or number of loans a student takes out, the maximum annual loan amount is capped at the cost of attendance, or COA, at the student’s college or university. For two-year and four-year universities, the COA includes the total cost of tuition, fees and related expenses like on-campus room and board for both the fall and spring semesters of one school year. These are known as direct costs and can typically be found on the school’s website. It can also include indirect costs and estimates of other expenses that students will likely incur but aren’t paying directly to the school, like textbooks and off-campus living and transportation.
Based on the latest federal student loan data, approximately 92% of student loans are made by the federal government; the remaining 8% of funding comes from private student loans.
The reason federal loans are much more popular is that they are easier to qualify for and have benefits. “Federal student loans often have lower interest rates and offer more borrower protections as compared to private student loans,” says Sarah Austin, policy analyst at the National Association of Student Financial Aid Administrators.
Federal Direct Subsidized and Unsubsidized Loans
The maximum amount that undergraduate students can borrow each year in federal direct subsidized and unsubsidized loans ranges from $5,500 to $12,500 per year, depending on their year in school and whether they’re a dependent or independent student. Borrowers can refer to the chart on StudentAid.gov to see how this breaks down. Note: These amounts are unchanged by the One Big Beautiful Bill Ac.
The actual amount is determined from information provided on the Free Application for Federal Student Aid form, which students are required to submit each year to be considered for federal and some other sources of financial aid. The financial information reported on the FAFSA is then used to calculate the Student Aid Index, which your college’s financial aid office uses to determine your federal student aid package.
There are also maximum total amounts students can borrow over the course of their undergraduate education, known as aggregate totals. Dependent students can borrow up to $31,000 in subsidized and unsubsidized student loans, with no more than $23,000 of the total in subsidized loans. Independent students can borrow up to $57,500 with the same cap on subsidized loans.
While students can’t borrow more than the cost of attendance, they might not always need to borrow the maximum amount allotted. The COA typically includes average expenses for indirect costs, and financially conscious students might be able to get by with spending less than the average.
“I recommend only borrowing what you need,” says Leslie H. Tayne, finance and debt expert and founder of Tayne Law Group. “Don’t take out more funding just because the option is there. One day, you will have to pay back whatever you take out, so if you only take what you need, you will thank yourself later.”
[Read: Best Student Loan Refinance Lenders.]
Federal Direct Subsidized Loan Limits
Federal direct subsidized loans are available to eligible undergraduate students who demonstrate financial need. With these loans, the Education Department pays the interest while students are in school at least half time, as well as during the six-month grace period after they leave school and during periods of deferment.
In 2025, just 15% of federal student loans were subsidized, according to The College Board’s Trends in College Pricing.
Undergraduate students can borrow a maximum of $3,500 to $5,500 in direct subsidized loans, depending on which program year they’re in. The school will determine the specific amount based on financial need as determined by the student’s SAI.
Federal Direct Unsubsidized Loan Limits
Federal direct unsubsidized loans are available to all undergraduate and graduate students and don’t require students to demonstrate financial need. These loans accrue interest while students are in school and during periods of deferment.
The amount of direct unsubsidized loans that students may be eligible to receive is determined by their year in school and status as either a dependent or independent student. The annual maximum amount increases each year, and independent students can borrow more than dependent students.
Note that students already enrolled in a program of study at an institution as of June 30, 2026 who previously received a federal direct loan, and are still in the same program may be grandfathered into the pre-OBBBA limits.
Federal PLUS Loan Limits
PLUS loans are another type of federal loans available for parents of dependent undergraduate students. In this case, the parent is the borrower on behalf of their dependent student and is responsible for paying back the loan. Eligibility isn’t based on financial need, but parents must go through a credit check and demonstrate they don’t have any adverse credit.
What’s changing this academic year, however, is that there are new federal loan limits for parent borrowers. Beginning in the 2026-2027 academic year, Parent PLUS loans will be capped at $20,000 per year, with a lifetime limit of $65,000 per dependent student. Previously, parents were able to borrow up to the cost of attendance.
With new annual and aggregate borrowing limits on Parent PLUS Loans, students and parents may no longer be able to rely fully on federal funding to cover a student’s cost of attendance, says Austin. “This will likely lead students and families to explore private loan options,” she says, “which typically have more stringent credit requirements meaning not all borrowers will qualify, even with a cosigner.”
Private Student Loan Limits
When federal student loans can’t cover the full college cost, then students have to decide what their next move will be. “When a student reaches these loan limits, they have to turn to private student loans to fill the gap or enroll in a less expensive college,” says Mark Kantrowitz, student loan expert and author of “How to Appeal for More College Financial Aid.”
Private student loans typically come from banks, credit unions and other lenders. They are almost always capped up to the COA, but otherwise, limits are up to the lender’s discretion. “Lenders set their own limits for private student loans, often based on their calculation of how much debt a student can afford to repay, based on the student’s academic major, the college where the student is enrolled and the student’s likelihood of graduating with the degree,” says Kantrowitz.
Because private student loans are credit underwritten, they require the borrower (and/or their cosigner) to have a very good credit score, minimum income thresholds and less than a maximum debt-to-income ratio, explains Kantrowitz. Since many undergraduate students have not yet established a credit history, however, the vast majority need a cosigner to qualify. In fact, around 94% of total private student loans in school year 2025-2026 were cosigned.
If the cosigner has strong credit, there’s a chance the student could get a competitive rate. But the flipside is also true.
As for repayment options, private loans do not have the flexibility of federal loans. Tayne advises having a well-thought-out, researched and realistic repayment strategy in place for all loans, but especially private ones. “It’s good to have a budget for when your payments begin, with your best- and worst-case scenarios, in terms of your financial status,” she says. “That way, you have a plan in place even if you haven’t yet found a job.”
[Read: Best Student Loans for Graduate School]
What to Consider When Taking Out a Loan
A little foresight and planning go a long way when considering student loans. Things like aid eligibility, tuition and COA can change on an annual basis, so projecting beyond the current school year and through the duration of the program is important.
When factoring in repayment, borrowers should also consider their planned line of work and whether the typical starting salary will be enough to cover loan repayments. Kantrowitz recommends this rule of thumb: “Students should aim to graduate with total student loan debt that is less than their annual starting salary,” he says “If total debt is less than annual income, the student should be able to afford to repay their student loans in 10 years or less.”
Graduates with lower starting salaries could consider an income-driven repayment plan (for the federal portion of their student loans), which allows them to make smaller loan payments but may lengthen the duration of repayment. As for private loans, Tayne recommends having conversations with your lender about all options for payments and deferment beforehand. “You never know when financial turbulence can hit, so knowing your options ahead of time is best,” she says.
Borrowers who go on to work in public service, either in government or at a nonprofit organization, could get a reprieve via the Public Service Loan Forgiveness plan, which wipes out all remaining federal direct loan debt after 10 years of full-time service, as long as regular minimum payments have been made. Keep in mind that private loans don’t qualify for forgiveness under the PSLF plan, and neither does part-time employment.
[READ: Fastest Co-Signer Release Student Loans]
Consider Other Sources of Funding
Some colleges try to help their students minimize the amount of loans needed, or avoid loans altogether by trying to meet full financial need through scholarships, grants and work-study opportunities.
Even if you can’t fully avoid student loans, other types of aid can help reduce the amount you borrow. For example, Pell Grants are awarded to undergraduate students who demonstrate exceptional financial need on the FAFSA. Amounts change yearly, but for the 2026-2027 school year, the maximum federal Pell Grant award was $7,395. Scholarships are another important source of financial aid.
Ultimately, families should think twice about borrowing above their means, even if that means choosing a less expensive school that might not be your first choice. “Live like a student while you are in school,” Kantrowitz advises, “so you don’t have to live like a student after you graduate.”
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How Much Can I Borrow for College? originally appeared on usnews.com
