If you’re planning to go to college, you’re probably trying to devise a strategy to pay for it. One year at a public state university costs USD 9,410, while a year at a private school costs USD 32,410. Can I get a student loan for college?
What types of federal student loans are available?
The US Federal Department student loan program is William D. Ford’s Direct Loan program. Under this program, the US Department of Education is your lender. Four types of direct loans are available:
- Direct subsidized loans are loans granted to eligible undergraduate students who have a financial need to cover the costs of higher education in a college or vocational school.
- Direct non-subsidized loans are loans granted to eligible undergraduate, graduate and professional students, but eligibility does not depend on financial needs.
PLUS direct loans are loans granted to graduating or vocational students and their dependent students to help cover the costs of education not covered by other financial assistance. Eligibility does not depend on financial needs, but credit control is required. Borrowers who have a negative credit history must meet the additional requirements to qualify.
Direct consolidation loans allow you to combine all eligible federal student loans into one loan with one loan provider.
How much money can I borrow in federal student loans?
It depends on whether you are a student, graduate, professional student or parent.
If you are a undergraduate student, the maximum amount you can borrow each year under Direct Subsidized Loans and Direct Non-subsidized Loans is between USD 5,500 and USD 12,500 per year, depending on the year you are in school and your dependency.
If you are a graduate or professional student, you can borrow up to USD 20,500 annually in the form of direct loans without subsidies. PLUS direct loans can also be used for the remainder of the university’s costs, as determined by the school, not covered by other financial support.
If you are the parent of a dependent student, you can receive a PLUS Direct Loan for the remainder of the child’s school costs, as determined by his school, not otherwise covered by financial assistance.
Private student loan limits
Loan limits for private students vary by lender. In general, the amount borrowed cannot exceed the total cost of participation in the school.
Borrow federal student loans up to private student loans. Federal loans have collateral that private loans do not have, including income-based repayment plans and loan cancellation programs.