How much can I borrow from the direct student loan federal program?

How much you can borrow depends on which kind of loan you receive:

Perkins Loans

The Student Loan Comparison Chart shows the maximum Perkins Loan funds you can receive, depending on whether you're an undergraduate student or a graduate or professional student. But, the amount you can borrow might be less than the maximums given.

Unlike for Stafford Loans, each school participating in the Federal Perkins Loan program is provided a certain amount of Perkins Loan funds each year. When all funds are used for that award year, no more awards can be made for that year. So, submit your Free Application for Federal Student Aid (FAFSA) as early as you can so you can be considered for these funds.

 

Stafford Loans (Direct Student Loans and FFEL)

Your loan limits depend on what year you are in school, whether you're a dependent student , and whether you receive "subsidized" or "unsubsidized" Stafford Loans.

 

Subsidized Stafford Loan

If you demonstrate financial need, you can borrow a "subsidized" FFEL or Direct Loan to cover some or all of that need. For a subsidized loan, the U.S. Department of Education pays the interest while you're in school at least half time, for the first six months after you leave school, and during a period of deferment—a postponement of loan payments. (Click here for information on deferment.)

The amount of your subsidized loan cannot exceed your financial need.

Unsubsidized Stafford Loan

You might be able to receive loan funds beyond your subsidized loan limit or even if you don't have demonstrated financial need. In that case, you'd receive an unsubsidized loan.

In addition to Perkins Loans, the U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of what are generally known as Stafford Loans (for students) and PLUS Loans (for parents)

Schools generally participate in either the FFEL or Direct Loan program but sometimes participate in both. Under the Direct Loan Program, the funds for your loan come directly from the federal government. Funds for your FFEL will come from a bank, credit union, or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but repayment plans differ somewhat.

How can I get a FFEL or Direct Loan?

For either type of loan, you must fill out a FAFSA. After your FAFSA is processed, your school will review the results and will inform you about your loan eligibility. You also will have to sign a promissory note, a binding legal document that lists the conditions under which you're borrowing and the terms under which you agree to repay your loan.

How to Choose and Evaluate Lenders

You'll need to choose a lender if you obtain a FFEL Stafford Loan. (If you have a Direct Stafford Loan from the federal direct student loan program, the federal government—through the U.S. Department of Education—is your lender.) Schools that participate in the FFEL Program will usually have a list of preferred lenders. Student loan borrowers may choose a lender from that list, or choose a different lender they prefer (for example, a credit union).

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