Both subsidized and unsubsidized federal student loans have annual loan limits and aggregate loan limits. These limits may mean that you need to take out additional loans from a private lender in order to pay the full cost of attendance.
Annual loan limits, or the total amount you can borrow per year, depend on your grade level, as well as whether you’re a dependent or independent student. Independent students can typically take out more federal student loans than dependent students.
Aggregate loan limits, or the cumulative loan amount you can owe at any given time, change based on your program (undergraduate, graduate, and professional), as well as whether or not you’re a dependent or independent student.
Borrowing limits: Undergraduate & graduate/professional students
After you graduate, or drop below half-time enrollment, you must start paying the government back for your loans. Typically, federal loans allow a six-month grace period after you leave school before you have to start making monthly payments.
It’s important to note that interest may accrue during your grace period. If you’re able to start making payments before the grace period has expired, you’ll save yourself money on the life of the loan.
Get in touch with your student loan servicer to find out more about your loan repayment plans and other repayment options.
How do you apply for a federal student loan?
You apply for a subsidized or unsubsidized federal student loan the same way: Simply fill out the Free Application for Federal Student Aid (FAFSA) .
Once the government receives your application, it forwards your information to the colleges or universities that you listed on your FAFSA.
The schools that decide to accept you will send you an acceptance letter and a financial aid package. The financial aid package will generally include information about federal and state grants, as well as your eligibility for federal subsidized and unsubsidized student loans.
- Even though the FAFSA is a government application, your financial aid package will come from the financial aid offices of colleges that you have applied to. You will not get an award letter from the federal gov ernment.
- You may get more or less federal financial aid depending on which school you attend.
After taking into account the free money we mentioned above, it’s generally best to accept all subsidized loan dollars offered to you , followed by federal unsubsidized loans and then private loans, as necessary.
What if you can’t pay?
Certainly, most college students hope to be gainfully employed not long after graduation. Still, it’s always a good idea to know what your options are should you find yourself in the unfortunate position of not being able to pay back your loan right away.
Here again, subsidized student loans can offer some reassurance. If you’re unable to pay for any reason, you can exercise one of two options: deferment or forbearance.
Deferment allows you to lower or postpone payments for up to three years, often without interest accrual during the time of nonpayment for subsidized loans. Unsubsidized loans may also allow deferment, but interest is usually charged during those periods .
Forbearance lets you stop making payments for up to a year; however, interest will continue to accrue during that time.
Other ways to pay for school
| $9,500 | $9,500 | $3,500 | $3,500 |
| $5,500 | $5,500 | $3,500 | $3,500 |
| $10,500 | $20,000 | $4,500 | $8,000 |
| $6,500 | $13,000 | $4,500 | $8,000 |
| $12,500 | $32,500 | $5,500 | $13,500 |
| $7,500 | $20,500 | $5,500 | $13,500 |
| – | $57,500 | – | $23,000 |
| – | $31,000 | – | $23,000 |