Credible takeaways
- Graduate students can borrow as much as $20,500 per year in federal Direct Unsubsidized Loans, with a lifetime limit of $138,500, including undergraduate loans.
- Federal graduate PLUS loans provide financing beyond Direct Unsubsidized Loans but they require a credit check.
- Private student loans can fill any funding gaps when federal loans aren't enough to cover your total costs.
Graduate school can be expensive, with tuition and fees for the 2023-24 academic year averaging $11,827 at public institutions according to the National Center for Education Statistics. That doesn't include room and board, textbooks, or other supplies, which can quickly add to the cost. Federal loan limits may not be enough to cover everything, leaving many students to explore private loans as an option.
In this guide, we'll break down graduate student loan limits and offer tips to help you maximize your borrowing.
Tip:
Federal loans are often the best place to start if you need to borrow money for grad school because they come with benefits like income-driven repayment plans and possible loan forgiveness.
How much can I get in graduate student loans?
The amount you can borrow in grad school loans depends on whether you choose federal or private loans.
Federal student loans offer two options for graduate students: Direct Unsubsidized Loans and grad PLUS loans. Direct Unsubsidized Loans have an annual borrowing limit of $20,500 per year, while grad PLUS loans allow you to borrow as much as the full cost of attendance. You can apply for both to ensure you have enough funding to cover your expenses.
Private student loans typically let you borrow as much as the total cost of attendance at your school, minus any federal aid you've already received.
Federal graduate loan limits
As a graduate student, you have access to two types of federal loans: Direct Unsubsidized Loans and graduate PLUS loans. Here's how much graduate students can borrow with each:
- Direct Unsubsidized Loans: You can borrow as much as $20,500 per academic year in Direct Unsubsidized Loans. The total lifetime limit, including any undergraduate student loans, is $138,500. These loans accrue interest while you're in school and don't require a credit check or a cosigner.
- Grad PLUS loans: Grad PLUS loans can cover any remaining costs if your expenses exceed the Direct Unsubsidized Loan limit. These loans are subject to a credit check for adverse credit history but don't have a fixed borrowing limit beyond the cost of attendance, minus any other financial aid.
Private graduate loan limits
Private student loans offer another financing option when federal loans aren't enough. Unlike federal loans, where the federal government sets limits, private lenders set their own borrowing limits.
Most private lenders won't allow you to borrow more than the total cost of attendance (COA) at your school, minus any other financial aid or loans you receive. Capping the amount you can borrow ensures you don't overborrow beyond what you need to cover tuition, fees, books, and living expenses.
Each lender has its own maximum loan limits, both annually and in total. While some may have caps similar to federal student loans, others may allow you to borrow more depending on your financial situation and program costs.
Best graduate student loan lenders
How loan limits affect your borrowing strategy
Student loan limits play a key role in how you pay for grad school, especially after you've maximized scholarships and grants, which don't require repayment. Here's how to approach borrowing:
- Start with federal loans: Direct Unsubsidized Loans should be your first choice. While the loan limits are lower, they offer competitive fixed interest rates, flexible repayment options, and valuable borrower protections like income-driven repayment plans and potential loan forgiveness.
- Use grad PLUS loans for extra funding: Use grad PLUS loans to cover costs above the federal loan limits. These loans come with the same federal benefits as Direct Unsubsidized Loans, but have higher interest rates.
- Consider private student loans as a last resort: Once you exhaust your federal loan options, you can use private student loans to cover any remaining costs. Because private student loans lack federal benefits, it's best to limit your reliance on them and only borrow what you can afford to repay.
How to maximize your graduate student loans
Even if you're eligible to borrow as much as your school's cost of attendance, it's smart to consider how much you actually need. The cost of attendance is just an estimate, and you might be able to manage with less. By borrowing only what's necessary, you'll reduce what you owe after graduation, keeping your future loan payments more manageable.
Maximize scholarships and grants first. Since these don't need to be repaid, every dollar you earn is one less you have to borrow. When it comes to loans, a good rule of thumb is to borrow no more than your expected annual salary after graduation. Use resources like the Bureau of Labor Statistics to estimate your future earnings, and a student loan calculator to gauge your monthly loan payments.
If you've borrowed more than needed, you can return unused federal loan funds within 120 days of the loan disbursement without accruing interest or fees on that amount. Contact your school's financial aid office for specific instructions.
Private student loan policies vary, so check with your lender if you want to return excess funds. Some may waive interest if you return the money quickly, while others may require you to make a lump-sum payment instead.
FAQ
What happens if I reach my graduate loan limit?
Once you reach the federal aggregate loan limit of $138,500, you won't be able to borrow more through federal loans. At that point, you'll need to turn to private loans. You can also pay down your federal loans - either partially or in full - and then reapply for additional federal loans.
Can I increase my graduate loan limits?
Generally, you can't increase federal loan limits. However, students in certain health professions programs qualify for higher borrowing limits. For example, if you're pursuing a master's degree in public health, your aggregate limit is $224,000 instead of $138,500.
Do graduate loan limits vary by school or program?
Yes, while most programs follow the standard federal loan limits, students in eligible health professions programs have higher borrowing limits. In these cases, the aggregate loan limit is $224,000.
How do loan limits differ between federal and private loans?
Federal loans have set annual and aggregate limits determined by the government. Private loan limits, however, vary by lender. Your limit for private loans depends on factors like your school's cost of attendance and any other financial aid you've received.
What should I do if I need more than the loan limit?
If you need more than the federal loan limits allow, consider private loan options. You can also explore scholarships, grants, or part-time work to help cover the remaining costs.
