What is the Maximum Amount of Student Loans You Can Get?
The question that runs on most students’ minds when they are preparing for college is, ‘Is there a cap on student loans?’ With the rise in college tuition fee, a lot of students turn to federal or private subsidized student loans to finance their education. The reason why a lot of students like to know if there is a limit on what they can borrow is the fact that most students would like a student loan that covers most of their college expenses like tuition, books, housing and other costs they might incur while in college. With this type of loan, many needy students are assured of a hassle-free college education.
So, is there a limit on student loans? Yes. There is a loans max for both federal and private student loans.
- Federal Student Loans
Federal loans are the most common among students. To apply for this type of loan, you do not have to visit a bank but fill out a provided application form. If your application is successful, the loan will be presented to you in the form of a financial aid award letter. In the US, there are two financial aid programs: the Federal Perkins Loan Program and William D. Ford Federal Direct Loan. The direct loan is the most common among students. This program offers four types of unsubsidized and subsidized loans. On the other hand, the Perkins Loan Program is normally given to students who are considered to have an exceptional need for aid. If you qualify, it is possible to get FAFSA loans amount of $5,500- $12,500 every year in unsubsidized and subsidized loans. The amount you get is usually based on a few factors such as which year you are in college. The limit on federal student loans depends on whether or not you are independent or dependent on your parents. Dependent students get a maximum of $31,000(unsubsidized) and $23,000(subsidized).
- Private Student Loans
The other type of loans common among students is the private student loans. This is a type of loan provided by banks and other financial institutions. They are not in any way part of the federal loan program, and you cannot lump them together for consolidation purposes. So, why would anyone choose private loans and what can private student loans be used for? The reason why some students go for private loans is the fact that they offer more money than federal programs. This is especially important if you are looking for a loan that can cover most of your expenses. For private loans, the maximum amount of money you can borrow varies from one lender to another. However, in most cases, the total loan you get is dependent on how good or bad your credit history is.
How Much Student Loans Can I Get When Starting College?
All student loans are given on an annual basis. For private loans, you will receive the amount of money your credit history allows you to borrow. If you have a very good credit history, there is a great chance that you will get a decent amount of money. For example, the Stafford loans amounts per year are $3,500 and $5,500 subsidized and unsubsidized loans respectively for dependent freshmen and $3,500 and 9,500 subsidized and unsubsidized loans respectively for independent freshmen. Therefore, it depends on your status (dependent or independent) and the type of loan you are getting (unsubsidized or subsidized). The amount of money you get from federal loans will depend on how needy you are compared to other students.
Is it Advisable to Apply for Government Loans for College and how does the Government Benefit?
The answer to this question solely depends on why you are taking out the loan. Is it because you are unable to pay for college or is it because you want to have some money while in college? If you are applying for the loan because you do not have the financial means to pay for college, it is a very good idea. This is because the financial aid will help you complete your education without any interruption due to lack of finances. However, if you are applying for the loan so that you can squander it on different things while in college, it is not a good idea. It might look like free money when you are applying, but not so much when you start making the payment. If you can do without the money, it would be better for you not to apply for the loan. Onto the question, ‘how much money does the government make on student loans?’ The government only gains what students pay in interest when paying back the loan which is very little.
How Much Should I Take Out in Student Loans?
To decide how much money you should take out in student loans, you need to consider how much you need. A lot of students would like to get the most amount of money available not considering that they might only be adding extra costs they do not need. Before you apply for a loan, consider how much you will need for tuition, books, housing and other expenses. Once you have an idea, base your application on that figure. This way, you will only apply for the money you need and lower your repayment costs.
Which Student Loans Can I Apply For?
What student loans am I eligible for? The question of who can get student loans is another common question about student loans. Anyone can apply for federal and private student loans. However, if you or your parents have a bad credit history, it might be difficult for you to get approved for the loans. It might also be hard to get federal loans if they do not consider you needy.