Credible takeaways
- Federal student loans have annual and aggregate limits that will change for some loan types starting in July 2026.
- Private student loans typically allow you to borrow up to the school-certified cost of attendance, minus other financial aid you’ve received.
- Consider your future salary when deciding how much to borrow in student loans.
More than 40% of people who pursued education beyond high school used student loans to help fund their degrees, according to 2024 Federal Reserve data. This accounts for 30% of all adults, including 17% who still owe money and 24% who have repaid their debt in full. But taking on student loans isn't necessarily a bad thing.
“One of the greatest ways you can invest in yourself is by investing in your education,” says Steven Conners, founder and president of Conners Wealth Management.
However, you'll need to make informed choices about how much to borrow to avoid spending a lot on interest. Learn how your school's cost of attendance, the type of loans you're using, and your status as a dependent or independent student can all affect the amount you’re able to borrow.
How much can I borrow in federal student loans?
There are several types of federal student loans, each with its own borrowing limits.
Direct Subsidized and Unsubsidized Loans have lower interest rates and origination fees than Direct PLUS Loans, and interest doesn't accrue on subsidized loans while you're in school and during eligible periods of deferment. While Direct Subsidized Loans are need-based, there are no income limitsor financial need requirements for unsubsidized loans.
The table below provides an overview of the loan limits for Direct Subsidized, Unsubsidized, and PLUS Loans.
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Source: StudentAid.gov
Changes to federal student loan limits coming in 2026
Beginning July 1, 2026, new borrowers won’t be able to take out grad PLUS loans, as the program is being sunsetted under “The One, Big, Beautiful Bill Act.”In addition, Direct Unsubsidized Loan limits for graduate and professional students will change. While the annual limit will remain the same for grad students, the new aggregate limit will be $100,000. For professional students, the annual limit will be $50,000, and the aggregate limit will be $200,000.
For new parent PLUS loan borrowers, there will be a limit of $20,000 per dependent student, with an aggregate limit of $65,000 per student. Finally, there will be a $257,500 lifetime limit on all federal student loans combined (except parent PLUS loans).
How much can I borrow in private student loans?
Private student loans are issued by private lenders rather than the government. Typically, private lenders allow you to borrow up to the school-certified cost of attendance, minus any other financial aid you’ve received.
If you have excellent credit, you may find that private loansoffer a lower student loan interest ratethan PLUS loans, usually without an origination fee. This can make these loans tempting, but remember that you won't get any federal borrower benefits, such as access to loan forgiveness, generous deferment or forbearance options, and income-driven repayment plans.
“You should first seek out federal student loan options, as those typically come with more borrower protection,” says Conners.
What affects how much I can borrow in private student loans?
Private student loan lenders evaluate whether you're likely to be a responsible borrower before they approve you for a loan or set your interest rate. Lenders consider many criteria, including:
- Credit score: Those with good or excellent credit are viewed as more responsible borrowers who pose less risk to lenders, so they can get approved more easily and often borrow more.
- Income: Lenders want to ensure you have enough money to repay the loan. They'll review your income and debt-to-income ratioto find out if you have enough room in your budget for loan payments.
- Cost of attendance: Private student loan lenders generally cap the amount you can borrow at the school-certified cost of attendance, so if you attend a costlier school, your loan limit will be higher.
- Financial aid: Because you can’t borrow more than your school-certified cost of attendance, minus other financial aid, lenders will consider how much you’ve been offered in aid before setting your loan amount.
How to calculate how much you should borrow
Student loans are often considered to be “good debt” since you’re investing in yourself. However, you could still have problems repaying it if you borrow too much or can't secure a well-paying job with your degree.
As a result, you must be cautious in deciding how much debt you commit to repaying. Depending on your situation, this may be less than what lenders allow you to borrow. Here’s how to calculate the amount you should borrow.
Consider whether your investment will pay off
“You should look at a student loan like buying a house,” says Wheeler Pulliam, certified financial planner (CFP) and managing partner at Xponify Financial in Hickory Creek, Texas.
“In buying a house, you want to make sure it’s in a good location, and consider whether its value will increase over time. It’s the same with a student loan. You want a degree that will afford you a decent career with a good salary. You want to ensure that there is a good return on investment for your money,” he explains.
Research your chosen school carefully and consider contacting them to find out the following:
- What percentage of graduates are employed?
- What type of work are they finding?
- What do their salaries look like?
Consider affordability and repayment timeline
You'll also want to think about how long the loan will be a burden and how it’ll affect your overall finances.
“In general, it would be best practice not to take on a loan that you don’t think you can pay off within 10 years of graduating,” advises Pulliam.
So, how can you tell if you're likely to struggle to repay what you owe?
“When applying for loans, try to keep your total debt below what your anticipated first-year salary will be. Also, try to keep your future monthly payments at or below 10% of your anticipated monthly salary,” says Domenick D'Andrea, financial adviser and co-founder of DanDarah Wealth Management.
It’s worth taking the time to think carefully about this issue.
“Too many young people take out massive amounts of student debt based on their dreams and passions alone, without thinking about how long it will take to pay it off,” says Pulliam.
How to borrow responsibly
The best way to borrow responsibly is to try to borrow as little as you can to accomplish your goals.
“Look at any potential grantsor scholarshipsyou may qualify for to help keep your student loans as low as possible,” says D'Andrea. “Make sure that you only borrow what is needed so you can keep your future payments as low as possible. Borrowing too much can also affect any future loans, such as borrowing for a car, a mortgage, or any other debt.”
Connors also recommends getting quotes from multiple private student loan lenders before you commit to one particular lender, as rates and terms can vary. Getting at least three quotes should give you an idea of what’s reasonable.
Finally, consider student loan refinancing in the future if your financial situation allows you to qualify for a new loan at a more affordable rate. Just keep in mind that refinancing federal student loans will cause you to lose federal protections, such as access to loan forgiveness.