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  • 6m.
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    The Student Loan Borrower's Cheat Sheet

    If you're taking on a student loan to pay for school, be sure you know what you're getting yourself into. By doing a little research on loan types, how much you can borrow, and your repayment options, you can be a confident borrower.
    Updated: July 1, 2017

    What You'll Learn

    • Different types of federal and non-federal loans.
    • Annual and aggregate borrowing limits.
    • Grace periods for different loans.
    students sitting around a table

    When it comes to taking on student loans, borrowers face an important question: how much should I borrow for college? Of course, that answer will differ for everyone depending on his or her situation. However, to figure that out, borrowers must first answer an additional question: how much can I borrow for college?

    If you're wondering how much you can borrow in subsidized Stafford loans or you want to know the interest rate for each of the loans in your award letter, you've come to the right place. We pulled together this cheat sheet with helpful information on each federal student loan, as well as information on private, state, and institutional loans. That way, you can compare the pros and cons of all your borrowing options.

    Types Of Loans

    Federal and non-federal loans can both help you pay for school, but they come with very different benefits. To start, let's define these loan options.

    Federal Loans

    • Undergraduate subsidized Stafford loans are loans only offered to undergraduates, and they do not accrue interest while you are in school at least half time.
    • Undergraduate unsubsidized Stafford loans are loans for undergraduates that do not consider financial need; interest accrues on these over the entire life of the loan.
    • Graduate unsubsidized Stafford loans are similar to their undergraduate counterparts; however, graduate students get higher annual limits to help cover their education costs. Medical and health professions students get an even larger annual loan limit to cover their programs.
    • Grad PLUS loans are unsubsidized and can cover expenses not met by other federal financial aid for graduate students.
    • Parent PLUS loans are unsubsidized and can be utilized by parents of undergraduate students to cover expenses not met by the student's other federal financial aid.
    • Perkins loans are administered by the school for undergraduate or graduate students who demonstrate exceptional financial need; these do not accrue interest while you attend school at least half time. As of October 1, 2015, only some current Perkins loan borrowers are eligible to receive new Perkins loans.

    Non-Federal

    • Private loans are offered by banks or credit unions and are designed to cover your balance after all other federal financial aid options have been utilized.
    • State loans are typically offered through your home state or the state where your school resides. Depending on the state, the terms of the loan may be comparable to federal loans. They can also help you if you are ineligible for federal aid or do not receive enough aid to cover your cost of attendance.
    • Institutional loans are sometimes offered by schools to assist you when you find yourself in dire financial straits or to supplement your federal financial aid awards.

    Borrowing Limits For Loans

    Now that you know what you're dealing with, let's look at the details for borrowing each type of loan, including the amount you can borrow overall and each year.

    Loan Type

    Borrowing Maximums

    Interest Rate

    7/1/2017-6/30/2018

    Need-Based/Credit Check Required

     

    Subsidized Stafford, undergrad

    Annual:

    $3,500 for first year

    $4,500 for second year

    $5,500 for third year and beyond

    Aggregate:

    $23,000

    4.45%

    Yes/No

    Learn More

    Unsubsidized Stafford, undergrad

    Annual:

    Dependent Students:

    $2,000 per year with subsidized Stafford max

    ($5,500 for first year, $6,500 for second year, and $7,500 for third year and beyond if no subsidized Stafford)

    Independent Students:

    $6,000 for first and second year

    $7,000 for third year and beyond with subsidized Stafford max.

    ($9,500 for first year, $10,500 for second year, and $12,500 for third year and beyond if no subsidized Stafford)

    Aggregate:

    $31,000 for dependent students, and $57,500 for independent or dependent students with parents who were denied the PLUS loan

    4.45%

    No/No

    Learn More

    Unsubsidized Stafford, grad

    Annual:

    $20,500

    Aggregate:

    $138,500

    6%

    No/No

    Learn More

    Unsubsidized Stafford, grad health professions

    Annual:

    Up to $20,000 (9-month year) or $26,667 (12-month year), depending on the program

    Aggregate:

    $224,000

    6%

    No/No

    Learn More

    Grad PLUS

    Annual:

    Cost of attendance

    Aggregate:

    None

    7%

    No/Yes

    Learn More

    Parent PLUS

    Annual:

    Cost of attendance

    Aggregate:

    None

    7%

    No/Yes

    Learn More

    Perkins, undergrad

    Annual:

    $5,500

    Aggregate:

    $27,500

    5% fixed

    Yes/No

    Learn More

    Perkins, grad

    Annual:

    $8,000

    Aggregate:

    $60,000

    5% fixed

    Yes/No

    Learn More

    Private loans

    Annual:

    Cost of attendance

    Aggregate:

    There may be an aggregate max depending on the loan and lender

    Depends on lender and credit

    No/Yes

    Learn More

    State loans

    Annual:

    Cost of attendance

    Aggregate:

    Varies by state

    Depends on State

    Maybe/Maybe

    Institutional loans

    Annual:

    Cost of attendance

    Aggregate:

    Varies by school

    Depends on school

    Usually/Maybe

    Learn More

    Repayment Basics

    Of course, when you borrow a loan, it pays to know what you'll get yourself into once repayment rolls around as well. Here's a high-level look at some key repayment details for each loan type.

    Loan Type

    Grace Period

    Income-Driven Repayment Option

    Deferment And Discharge

    Subsidized Stafford, undergrad

    6 months

    IBR/ICR/Pay As You Earn/REPAYE

    Yes

    Learn More

    Unsubsidized Stafford, undergrad

    6 months

    IBR/ICR/Pay As You Earn/REPAYE

    Yes

    Learn More

    Unsubsidized Stafford, grad/grad health professions

    6 months

    IBR/ICR/Pay As You Earn/REPAYE

    Yes

    Learn More

    Grad PLUS

    6 months

    IBR/ICR/Pay As You Earn/REPAYE

    Yes

    Learn More

    Parent PLUS

    6 months (upon request)

    ICR if consolidated with DL

    Yes

    Learn More

    Perkins

    9 months

    IBR/ICR/Pay As You Earn if consolidated into DL*/REPAYE

    Yes

    Learn More

    Private Loans

    Typically none

    Typically no

    Sometimes (Limited)

    Learn More

    State Loans

    Sometimes

    Maybe

    Maybe

    Institutional Loans

    Usually

    Maybe

    Maybe

    Learn More

    *Perkins loans have unique deferment and cancellation options that may be more generous than what DL offers. You will lose these benefits if you consolidate your Perkins loans.

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