Is There a Limit on Private Student Loans?

By Elaine Rubin December 14, 2018

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Question

I am trying to pay for Graduate school and I maxed out my federal student loans (including Direct Graduate PLUS). I found a lender for a private student loan, but my school denied certification of that private student loan. Can they do that? What are my options now, I needed those funds to cover off-campus living expenses?

Answer

This can be a tough situation to be in. But yes, you can reach your loan limits on both, federal and private student loans. And you would likely find out when your school denies to certify any additional student loans.

The process of awarding and certifying student loans (both federal and private) is managed by your college. Your college is only allowed to certify financial aid (including federal and private student loans) up to your program’s cost of attendance (set by your school) for your academic year. If you’ve already received loans and other aid up to your cost of attendance, then you do need to find another way to pay for your college costs.

Denied for Student Loans, Now What?

Your options may be limited in this situation.

1. Have a conversation with your financial aid advisor. Discuss your situation and ask if you can request a professional judgment or “PJ” to make a change to your cost of attendance. If your cost of attendance is increased, then you would be eligible for additional student loan funds. PJs are done on a case-by-case basis by your financial aid office. Make sure to provide any documentation they request, it is their decision to approve/deny your request. 
2. Look for a more affordable living situation. Can you cut down on any other expenses to help manage these costs? How about finding a roommate? Do you have the option of on-campus housing instead of off-campus? This may not be the living situation you hoped for, but you need to find a way to reduce this cost if you aren’t eligible for additional aid/loans.
3. Look for a way to earn income to help cover your living expenses. It may be tough to take on a job while attending graduate school, but it may be necessary. Look for positions which offer you the flexibility you need while you are attending school. 

When you graduate you will be required to repay the loans you borrowed, so loan limits are actually a protection. It is worth it to have the discussion with your financial aid office to see if there is any way they can help you this academic year.

Best of luck!

The Edvisor®