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🎓 Federal Student Loan Basics (Easy to Understand)
Did you know most students can get federal student loans to help pay for college each year? But there are limits on how much you can borrow each year and in total.
Your loan limits depend on whether you're a dependent student or an independent student.
✅ What is a Dependent Student?
A dependent student still gets support from their parents, so they have to include their parents' financial info on the FAFSA. You are dependent unless you meet one of these:
- You're 24 or older
- You're married
- You have children or other dependents you support
- You're working on a graduate or professional degree
- You were in foster care, a ward of the court, or are an emancipated minor
- You're an unaccompanied youth who is homeless or at risk of being homeless
💵 Annual Loan Limits for Undergraduate Students
| Year | Dependent | Independent |
|---|---|---|
| First Year | $5,500max $3,500 subsidized | $9,500max $3,500 subsidized |
| Second Year | $6,500max $4,500 subsidized | $10,500max $4,500 subsidized |
| Third Year & Beyond | $7,500max $5,500 subsidized | $12,500max $5,500 subsidized |
💡 What are Subsidized and Unsubsidized Loans?
Subsidized Loans
Government pays the interest
The government pays the interest while you're in school.
Unsubsidized Loans
You are responsible for all the interest
You are responsible for all the interest.
🎓 Graduate or Professional Students
If you go to graduate or professional school (after a bachelor's degree), you can borrow:
Up to $20,500 per year
But these are only unsubsidized loans (you pay all the interest).
$20,500per year
Special case for health professions (like medicine, dentistry, pharmacy): You may get extra unsubsidized loan amounts, and your total limit can be higher.
🏁 Total (Aggregate) Loan Limits
-
Dependent undergraduate studentsmax $23,000 subsidized$31,000 total
-
Independent undergraduate studentsmax $23,000 subsidized$57,500 total
-
Graduate or professional studentsincluding undergrad loans; no more than $65,500 can be subsidized$138,500 total
-
Health professions programsstill max $65,500 subsidized$224,000 total
🕒 Grace Period (Easy to Understand)
Did you know you don't have to start paying your federal student loans right away after you leave school?
When you graduate, leave school, or drop below half-time enrollment, most federal student loans give you a short "break" called a grace period before you start making payments.
6months
Direct Subsidized and Direct Unsubsidized Loans
You get 6 months before you have to pay.
9months
Perkins Loans
You get 9 months.
PLUSloans
PLUS Loans
You usually start paying right away. But if you're a graduate or professional student with a PLUS Loan, you get an automatic 6-month break after you leave school or drop below half-time.
The grace period is meant to give you time to find a job and plan your budget before paying back your loans.
| Loan Type | Grace Period | Notes |
|---|---|---|
| Perkins Loan | 9 months | No new Perkins Loans given, but old ones still have grace. |
| Parent PLUS Loan | None | Payments start right away after loan is fully paid out. |
| Grad PLUS Loan | 6 months | Automatic break after leaving school or dropping below half-time. |
⚠️
Important: If you have unsubsidized loans, interest will still build up (accrue) during the grace period. If you don't pay this interest, it gets added to your loan balance (this is called capitalization), so you'll owe more later.