How Much Can I Borrow Using
The Stafford Loan Program
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How much you can borrow using the Stafford Loan Program depends on a number of variables. Let’s examine them.
(1) The year you are attending school, and
(2) Whether you have a subsidized or unsubsidized Direct or FFEL Stafford Loan.
Subsidized Student Loans
A subsidized loan is awarded on the basis of financial need. If you're eligible for a subsidized loan, the government will pay (i.e., subsidize) the interest on your loan for any of these three reasons:
(1) While you're in school
(2) For the first six months after you leave school
(3) If you qualify to have your payments deferred. Depending on your financial need, you may borrow subsidized money for an amount up to the annual loan borrowing limit for your level of study (see below).
Unsubsidized Student Loans
You may be able to borrow beyond your subsidized loan amount even if you haven’t demonstrated financial need. In this case, you would receive an unsubsidized loan. Your school subtracts the total amount of your other financial aid from your cost of attendance to determine whether you're eligible for an unsubsidized loan.
Duly note: Unlike a subsidized loan, you are responsible for the interest from the time the unsubsidized loan is disbursed until it's paid in full. You can choose to pay the interest or allow it to accrue (accumulate) and be capitalized (that is, added to the principal amount of your loan). Capitalizing the interest increases the total amount you will have to repay.
Hot Tip: You can receive a subsidized loan and an unsubsidized loan for the same enrollment period as long as you don't exceed the annual loan limits.
Dependent Undergraduate Student
If you're a dependent undergraduate student, each year you can borrow up to
$3,500 (for the 2007-08 academic year) if you're a first-year student enrolled in a program of study that is at least a full academic year.
$4,500 (for the 2007-08 academic year) if you've completed your first year of study and the remainder of your program is at least a full academic year.
$5,500 if you've completed two years of study and the remainder of your program is at least a full academic year.
Independent Undergraduate Student
If you are an independent undergraduate student or a dependent student whose parents have applied for but were unable to get a PLUS Loan, each year you can borrow up to:
$7,500 (for the 2007-08 academic year) if you're a first-year student enrolled in a program of study that is at least a full academic year. No more than $3,500 of this amount may be in subsidized loans.
$8,500 (for the 2007-08 academic year) if you've completed your first year of study and the remainder of your program is at least a full academic year. No more than $4,500 of this amount may be in subsidized loans.
$10,500 (for the 2007-08 academic year) if you've completed two years of study and the remainder of your program is at least a full academic year. No more than $5,500 of this amount may be in subsidized loans.
Graduate Student
If you are a graduate student or a professional degree student, each year you can borrow up to
$20,500 for the 2007-08 academic year. No more than $8,500 of this amount may be in subsidized loans.
When you graduate with a graduate or professional degree, the maximum total debt allowed from Stafford Loans is $138,500. No more than $65,500 of this amount may be in subsidized loans. This maximum total graduate debt limit includes Stafford Loans received for undergraduate study.
Hot Tip: The amounts noted are for the 2007-08 academic year and indicate the maximum yearly amounts you can borrow in both subsidized and unsubsidized FFELs or Direct Loans, individually or combined. Because you can't borrow more than your cost of attendance minus the amount of any Federal Pell Grant you're eligible for and minus any other financial aid you'll get, you may receive less than the annual maximum amounts.
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