Question:
I have reached the maximum limits on my federal student loans. Where can I get the money I need to pay for college?
Answer:
Federal student loans have both annual and aggregate student loan limits. If you have reached your annual loan limit, you will need to wait until next year to borrow more. If you have reached your aggregate loan limit, you can discuss your situation with your financial aid office. However, if you hit an annual or aggregate loan limit, you will need to find another way to cover the cost of college. After carefully reviewing the amount you will need, you may need to consider a private student loan.
Federal Student Loan Limits
The annual loan limits on the Direct Unsubsidized Loan range from $5,500 to $7,500 for dependent undergraduate students and $9,500 to $12,500 for independent undergraduate students. The aggregate loan limits are $31,000 for dependent students and $57,500 for independent students. If you are a graduate student or professional student, your loan limits depend on your field of study.
How to Make College More Affordable
If you need to borrow more than these limits, it may be a sign that you are over-borrowing. Total student loan debt at graduation should be less than the expected annual starting salary and, ideally, a lot less. If total student loan debt is less than annual income, you should be able to repay your student loans in ten years or less. If total debt exceeds annual income, you will struggle to make the monthly loan payments.
To get an estimate of debt at graduation, multiply your first year student loan debt by the length of the educational program. This figure should be within 15 percent of the actual debt at graduation.
Students who are enrolled at higher-cost colleges tend to borrow more. If you are still in your first year in college, consider transferring to a lower-cost college. Otherwise, continue pursuing your education, since it will be difficult to repay the debt without a college degree.
If you are encountering financial difficulty, talk to the financial aid administrator at your college. The financial aid administrator may be able to provide additional funds, especially if your money problems are caused by special circumstances.
Next, create a plan for finishing your degree. Map out which courses will be taken each academic term, being mindful of prerequisite requirements and how frequently each class is offered. Consider taking on a heavier academic course-load during the school year or summer classes to continue making progress toward an on-time completion.
How to Find More Money for College
There are several methods of finding the money to fill the gap between college costs and financial aid:
- Talk to your family. Perhaps your parents, grandparents, aunts, uncles or other relatives will be willing to give you the money you need to finish your degree.
- Look for a part-time job. Ask the college's student employment office if there are any work-study jobs available that no other student wanted. Also, look for job opportunities on- or near- campus.
- Did you know you can sell your clothes you don't wear anymore? There are great apps to sell clothes or other belonging you don't really use anymore.
- Pursue a side hustle. Do you have a talent, skill, or resource you can use as a side hustle? If you're an artist, musician, or writer, you can find ways to offer your services for a fee. Also look into opportunities or apps to help other with house projects, tasks, or every day errands—especially is you have a car.
- Search for scholarships.
- Consider a private student loan.
You could also take a leave of absence from school to work full-time for a short period to earn enough money to pay for the rest of your education. Most federal and private student loans have a six-month grace period after the student drops below half-time enrollment before repayment begins. But, beware; leaving school is the first step toward not finishing your education. Students who stop-out are less likely to graduate.