Student loans are an incredibly important topic in today's world. The average student now graduates with $37,000 worth of debt according to data collected by financial expert Mark Kantrowitz. Many people wonder how the numbers have climbed so high and if there are any limits on how much money you can get in student loans.
It turns out that there are some limits when it comes to student loans, especially federally funded student loans. At the same time, there are numerous way to take out more money if you need it depending on your program and your credit worthiness. Here are some examples, broken down by undergraduate and graduate student loans:
Undergraduate Student Loans
As an undergraduate, you can take out $5,500 per year in Perkins loans. Then, you can take out $5,500 to $12,500 per year in Direct Subsidized and Direct Unsubsidized Loans on top of that. Remember that subsidized loans are preferable, since interest doesn't accrue on the loans until after you leave school. Additionally, pay close attention to your entrance counseling when applying for student aid so that you're aware of all the costs associated with your student loans and how much you will have to pay when you finish school.
Graduate School Loans
Graduate school can be a very expensive endeavor, and many people leave graduate school with six figure debt. The reason is that if you're a graduate student you can borrow up to $8,000 each year in Perkins Loans in addition to $20,500 in direct unsubsidized loans (loans that accrue interest while you're in school.) If that amount is still not enough, you can take out Direct PLUS loans, which is very common for those who are in law school or medical school. Direct PLUS loans are the primary reasons why people who are in medical school are allowed to take out an average of $183,000 per year.
Private loans are another option when it comes to borrowing money for school. The amount of money you can borrow with private loans is more flexible and really depends on your credit score and credit history. Most people who are in school or pursuing graduate studies do not have a lengthy enough credit history to borrow large amounts of money on their own, so many of them take on a co-signer and get a personal loan. With a qualified co-signer, you could borrow a significant amount of money.
It's also important to note that if you've exhausted all of these options and there is still money left that you need to pay, your parents can always take out a Parent PLUS loan for any other costs. Just remember that there are many options to save money on college costs, from attending community colleges to searching for grants or scholarships. When it comes to graduate school, there are also many opportunities for graduate stipends and assistantships. Many employers will also pay for their employees to pursue higher education. So, just be sure to do your research and make sure you're knowledgeable not only about how much money you can take out with student loans but how much money you should take out in order to pay it back effectively.