Chapter 4

Annual and Aggregate Loan Limits

Annual Loan Limit Overview

Direct Subsidized Loans and Direct Unsubsidized Loans have annual loan limits that vary based on the student’s grade level and (for Direct Unsubsidized Loans) dependency status. The annual loan limits are the maximum amounts that a student may receive for an academic year. The actual loan amount that a student is eligible to receive may be less than the annual loan limit. (There are also aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans, as discussed later in this chapter.)

There are higher Direct Unsubsidized Loan annual loan limits for students enrolled in certain health professions programs, and special loan limits for certain students who are not enrolled in a program that leads to a degree or certificate awarded by the school they are attending. Also, the annual loan limits for undergraduate students must be prorated (reduced) in some cases.

Depending on the academic calendar of the program, a student who has reached the annual loan limit cannot receive another Direct Subsidized Loan or Direct Unsubsidized Loan until they either begin another academic year, or, in some cases, progress within an academic year to a grade level with a higher annual loan limit.

Annual Loan Limits: Basic Principles

  • For undergraduate students, there is a combined annual loan limit for Direct Subsidized Loans and Direct Unsubsidized Loans, of which not more than a specified amount may be comprised of Direct Subsidized Loans.

  • For graduate or professional students, the annual loan limit is only for Direct Unsubsidized Loans. Graduate or professional students are not eligible to receive Direct Subsidized Loans.

  • An undergraduate student who is ineligible for Direct Subsidized Loans may receive up to the full combined subsidized and unsubsidized annual loan limit in Direct Unsubsidized Loans.

  • The Direct Subsidized Loan annual loan limits are the same for both dependent and independent undergraduates.

  • Dependent students have lower combined subsidized and unsubsidized annual loan limits than independent students. However, if a dependent student’s parent(s) cannot borrow a Direct PLUS Loan, the student becomes eligible for the higher combined subsidized and unsubsidized annual loan limits that are otherwise available only to independent students, allowing the dependent student to receive additional Direct Unsubsidized Loan funds (however, this does not change the student’s dependency status).

  • The annual loan limits apply to the academic year (that is, the annual loan limit is the maximum loan amount that a student may receive for one academic year).

  • The student’s maximum annual loan limit increases as the student progresses to higher grade levels.

  • For undergraduate students, the loan limit must be prorated if the student is enrolled in a program (or in the remaining portion of a program) that is less than an academic year in length.

Annual Loan Limits for Dependent Undergraduates

For dependent undergraduate students (excluding dependent undergraduates whose parents are unable to obtain Direct PLUS Loans), the combined Direct Subsidized Loan and Direct Unsubsidized Loan annual loan limits are shown in Table 1A below.

The “Total (subsidized and unsubsidized)” limits in Table 1A represent the total of all Direct Subsidized Loans and Direct Unsubsidized Loans a dependent undergraduate student may borrow at each level of study for a single academic year. For example, a dependent first-year undergraduate may receive up to $5,500 in Direct Subsidized Loans and/or Direct Unsubsidized Loans for a single academic year, but no more than $3,500 of this amount may be subsidized. A dependent first-year undergraduate who has no subsidized loan eligibility may receive up to the full $5,500 in Direct Unsubsidized Loans.

Volume 8, Chapter 4, Table 1A: Dependent Undergraduate Annual Limits for Direct Subsidized Loans and Direct Unsubsidized Loans

Dependent Undergraduates (Excluding Dependent Students Whose Parents Can’t Get Direct PLUS Loans)

Total (Subsidized and Unsubsidized)

Maximum Subsidized

First Year

$5,500

$3,500

Second Year

$6,500

$4,500

Third Year and Beyond

$7,500

$5,500

Annual Loan Limits for Independent Undergraduates and Certain Dependent Undergraduates

The maximum Direct Subsidized Loan amount that an undergraduate student may receive each academic year is the same for both dependent and independent undergraduates. However, there are higher Direct Unsubsidized Loan annual loan limits for independent undergraduate students and for dependent undergraduates whose parents are unable to obtain Direct PLUS Loans. For these students, the combined Direct Subsidized Loan and Direct Unsubsidized Loan annual loan limits are shown below in Table 1B.

As with the loan limits for dependent undergraduates, the “Total (subsidized and unsubsidized)” limits represent the total of all Direct Subsidized Loans and Direct Unsubsidized Loans that an independent undergraduate student (or a dependent undergraduate whose parent is unable to obtain a Direct PLUS Loan) may borrow at each level of study, for a single academic year. For example, an independent, first-year undergraduate may receive up to $9,500 in Direct Subsidized Loans and Direct Unsubsidized Loans for a single academic year, but no more than $3,500 of this amount may be subsidized. An independent first-year undergraduate who has no subsidized loan eligibility may receive up to the full $9,500 in Direct Unsubsidized Loan funds.

Although a dependent undergraduate whose parent is unable to obtain a Direct PLUS Loan has access to the same higher Direct Unsubsidized Loan annual loan limits as an independent undergraduate at the same grade level, the student is still considered to be a dependent student for all other Title IV purposes.

For more detail on the conditions under which a dependent undergraduate can receive increased Direct Unsubsidized Loan amounts, see “Criteria for dependent students to receive additional Direct Unsubsidized Loan funds” below.

Volume 8, Chapter 4, Table 1B: Independent Undergraduate Annual Limits for Direct Subsidized Loans and Direct Unsubsidized Loans

Independent Undergraduates (and Dependent Undergraduates Whose Parents Can’t Get Direct PLUS Loans)

Total (Subsidized and Unsubsidized)

Maximum Subsidized

First Year

$9,500

$3,500

Second Year

$10,500

$4,500

Third Year and Beyond

$12,500

$5,500

Criteria for Dependent Students to Receive Additional Direct Unsubsidized Loan Funds

Dependent students whose parents are unable to borrow Direct PLUS Loans due to adverse credit or other exceptional circumstances may receive additional Direct Unsubsidized Loan funds up to the same amount that is available to independent undergraduate students. Because Direct PLUS Loans can be made for up to the full COA minus other financial assistance received, the additional Direct Unsubsidized Loan amount may not be sufficient to substitute entirely for the amount a parent could receive under the Direct PLUS Loan program. Therefore, you should determine whether the parents may be able to borrow a Direct PLUS Loan by obtaining an endorser who does not have an adverse credit history before originating additional unsubsidized loan amounts for the dependent student. Before a dependent student can receive the additional Direct Unsubsidized Loan amount, you must document the basis of the student’s eligibility. Some basic guidelines for making this determination are discussed below. However, keep in mind that none of the following, by themselves, are sufficient to make a dependent student eligible for additional Direct Unsubsidized Loan funds:

  • The parent’s unwillingness to borrow a Direct PLUS Loan (even though the parent would otherwise be eligible to borrow);

  • The school’s decision not to participate in the Direct PLUS Loan program; or

  • The financial aid administrator’s belief that the parent should not borrow a Direct PLUS Loan.

General Guidelines for Determining That a Dependent Student May Receive Additional Unsubsidized Funds

The sections that follow provide general guidelines for making a determination that a dependent student is eligible to receive additional Direct Unsubsidized Loan funds under various circumstances.

Only One Parent Has Applied for a Direct PLUS Loan and Been Denied

If only one of a student’s parents has applied for a Direct PLUS Loan and been denied based on adverse credit, you may award additional Direct Unsubsidized Loan funds on that basis, without first determining whether there is another parent who could take out a Direct PLUS Loan. However, if both parents apply independently and one is approved and the other denied, the dependent student is not eligible for the additional unsubsidized loan amounts.

A Previously Approved Parent Later Requests Additional Direct PLUS Loan Funds and Is Denied

The dependent student may become eligible at any time during an academic year if a parent has first been approved and then later denied a Direct PLUS Loan. For example, if a parent was approved for and received the full amount of a Direct PLUS Loan for a fall-spring loan period, but the parent is subsequently determined ineligible due to having an adverse credit history when they request additional Direct PLUS Loan funds later during the spring semester, you may award additional Direct Unsubsidized Loan funds to the student. However, the Direct PLUS Loan funds that the parent previously received during the same period of enrollment must be treated as OFA when determining the additional Direct Unsubsidized Loan amount that the student is eligible to receive.

A Parent Is Unable To Borrow a Direct PLUS Loan For Reasons Other Than Adverse Credit History (Exceptional Circumstances)

In addition to cases in which a parent has been denied a Direct PLUS Loan due to adverse credit, a dependent undergraduate student may also be eligible for increased unsubsidized loan amounts if you determine and document the existence of exceptional circumstances other than adverse credit that would prevent a parent from borrowing a Direct PLUS Loan.

If you make such a determination, you may award increased Direct Unsubsidized Loan amounts to a dependent undergraduate even if the student’s parent previously applied for a Direct PLUS Loan and was found to not have an adverse credit history. Similarly, if you make such a determination before a parent has requested a Direct PLUS Loan, you may award the increased Direct Unsubsidized Loan funds to the dependent student without requiring the parent to apply for a Direct PLUS Loan.

Examples of such exceptional circumstances include, but are not limited, to the following:

  • The parent is incarcerated.

  • The parent’s whereabouts are unknown.

  • The parent has filed for bankruptcy and has provided a letter from the bankruptcy court stating that as a condition of the bankruptcy filing, the parent may not incur any additional debt.

  • The parent’s income is limited to public assistance or disability benefits, and you have documented that the parent would not be able to repay the Direct PLUS Loan.

  • You have examined the family financial information and documented the parent’s likely inability to repay the Direct PLUS Loan due to an existing debt burden or the parent’s expected income-to-debt ratio.

  • The parent of a dependent student is not a U.S. citizen or permanent resident or is not able to provide evidence from the U.S. Citizenship and Immigration Service that they are in the United States for other than a temporary purpose with the intention of becoming a citizen or permanent resident.

Before originating a loan for the increased Direct Unsubsidized Loan amounts based on a parent’s ineligibility for a Direct PLUS Loan due to adverse credit or other exceptional circumstances, you must document the basis of the dependent student’s eligibility.

A determination that a parent is ineligible for a Direct PLUS Loan in one academic year based on adverse credit or other exceptional circumstances does not automatically support the dependent student’s additional unsubsidized loan eligibility in subsequent years. If a dependent student is determined to be eligible for additional unsubsidized loan amounts in one academic year, you must re-examine and document that the basis for the student’s eligibility continues to exist before originating additional unsubsidized loan amounts for the student in a subsequent year.

Annual Loan Limit for Graduate and Professional Students

The annual loan limit for graduate or professional students is shown below in Table 1C. Graduate and professional students are not eligible to receive Direct Subsidized Loans, so the annual loan limit for these students represents only Direct Unsubsidized Loans.

A student in an undergraduate program is not eligible for the graduate loan limit based on taking graduate coursework as a part of the undergraduate program. In contrast, a graduate student taking some undergraduate coursework is eligible for the graduate loan limit if the student is enrolled at least half time in courses (graduate or undergraduate) that can be applied to the graduate program. However, the student must already be admitted into the graduate program.

A student with a bachelor’s degree who is taking preparatory work for graduate school (or whose full admission to the graduate program is contingent upon completion of certain undergraduate courses) is not eligible for graduate loan limits. See the discussion later in this chapter on annual loan limits for students taking preparatory coursework.

Volume 8, Chapter 4, Table 1C: Graduate and Professional Student Annual Limits for Direct Unsubsidized Loans

Graduate and Professional Students

Total (Unsubsidized Only)

All years

$20,500

Loan Limit Level for Transfer Students

If you’re awarding a Direct Loan to a student who is transferring from a program at another school to a program at your school that is greater than one academic year in length, you may use the loan limits for a second-year or higher undergraduate if your school classifies the student at that level based on the number of academic credits it accepts from the prior school, or based on the granting of advance standing in the new program. Note, however, that if the student already has an associate or bachelor’s degree and if that degree is required for entry into a program at your school, you must use the third-year and beyond undergraduate loan limits for a student who transfers to that program.

Loan Limit When a Baccalaureate or Associate Degree is Required for Admission to an Undergraduate Program

For a student who has an associate or baccalaureate degree that is required for admission into an undergraduate program, you must use the third-year and beyond undergraduate loan limits for that student.

Annual Loan Limits for Direct PLUS Loans

There are no fixed annual loan limits for Direct PLUS Loans. A graduate or professional student may be awarded a Direct PLUS Loan for up to the student’s COA minus OFA (see Volume 3, Chapter 3 for packaging rules). Therefore, a graduate or professional student who has received the maximum Direct Unsubsidized Loan amount for an academic year may have additional Direct PLUS Loan eligibility. Similarly, the total Direct PLUS Loan amount borrowed by a parent on behalf of a dependent student may not exceed the student’s estimated COA minus OFA the student receives for the period of enrollment. This is the only borrowing limit for Direct PLUS Loans.

Annual Loan Limit for Programs Greater Than One Academic Year, But Less Than Two Academic Years in Length

The “Eligibility and Certification Approval Report” (ECAR) lists “one-year” as the highest educational program offered by a school if its longest program is one academic year or more in length, but less than two academic years. Students who have successfully completed the first academic year of such programs can be treated as second-year undergraduates for annual loan limit purposes, even though the ECAR lists the school’s highest program offering as “one-year.” For instance, a student enrolled in a 1,500 clock-hour program would be eligible for the second-year loan limits after completing the first 900 clock hours and 26 weeks of instructional time. However, because the remaining portion of the program would be less than a full academic year in length, the loan limit would have to be prorated, as explained in Chapter 5 of this volume.

Annual Loan Limits for One-Year and Two-Year Programs

If a program can normally be completed in one year of full-time study, a student in that program can never receive more than the first-year annual loan limit, even if it takes the student more than one academic year to finish the program.

Similarly, a student in a program that students are expected to complete in two years can never receive more than the second-year annual loan limit for an academic year, even if individual students sometimes take more than two years to finish the program. However, some schools offer associate degree programs that have been approved by the school’s state licensing agency or accrediting agency as programs that require more than two academic years of study for a full-time student to complete. Students enrolled in such a program may receive Direct Loans at the third-year annual loan limit after they have successfully completed the first two academic years of the program, and if the school has a grade level progression standard that allows for third year level loans.

Note also that a school may not link two stand-alone one-year programs by making one a prerequisite for admission, and then classify students beginning the second one-year program as second-year undergraduates for loan limit purposes. However, hours or credits earned in a prior certificate program could be used to classify a transfer student at a grade level higher than grade level one if the student transfers into a program that is greater than one academic year in length and the new school accepts a year’s worth of credits or hours from the prior program. For instance, if a school admits a transfer student from a certificate program and accepts 900 clock hours that the student earned toward its 1,500-hour program, the student could be eligible for the second-year loan limits if other students in the program are eligible for second-year loan limits after completing the first 900 hours of the program.

Annual Loan Limits for Preparatory Coursework and Teacher Certification Programs

In Chapter 1 of this volume we discussed instances in which a student may receive Direct Loans for coursework that is not part of an eligible program leading to a degree or certificate awarded by the school (preparatory coursework and teacher certification programs). The annual loan limits for students enrolled in preparatory coursework or teacher certification programs are shown in Tables 2A and 2B below.

Volume 8, Chapter 4, Table 2A: Annual Loan Limits for Preparatory Coursework (Maximum 12 Consecutive Months)

Preparatory coursework required for enrollment in an undergraduate program:

Total (Subsidized and Unsubsidized)

Maximum Subsidized

Dependent undergraduates (excluding dependent students whose parents can’t get Direct PLUS Loans)

$ 2,625

$ 2,625

Independent undergraduates (and dependent undergraduates whose parents can’t get Direct PLUS Loans)

$ 8,625

$ 2,625

Preparatory coursework required for enrollment in a graduate or professional program:

Total (Subsidized and Unsubsidized)

Maximum Subsidized

Dependent undergraduates (excluding dependent students whose parents can’t get Direct PLUS Loans)

$ 5,500

$ 5,500

Independent undergraduates (and dependent undergraduates whose parents can’t get Direct PLUS Loans)

$12,500

$ 5,500

Volume 8, Chapter 4, Table 2B: Annual Loan Limits for Teacher Certification Coursework

Total (Subsidized and Unsubsidized)

Maximum Subsidized

Dependent undergraduates (excluding dependent students whose parents can’t get Direct PLUS Loans)

$ 5,500

$ 5,500

Independent undergraduates (and dependent undergraduates whose parents can’t get Direct PLUS Loans)

$12,500

$ 5,500

Note that for dependent undergraduates, the annual loan limits shown above in Tables 2A and 2B do not provide an additional unsubsidized loan amount beyond the maximum annual subsidized amount, as is the case with the loan limits for independent undergraduates and dependent undergraduates whose parents cannot get Direct PLUS Loans. For dependent undergraduates enrolled in preparatory coursework or teacher certification programs, there is just a single annual loan limit representing the maximum amount of subsidized and/or unsubsidized loans that the student may receive for an academic year.

For example, a dependent undergraduate taking preparatory coursework required for enrollment in a graduate or professional program could receive up to $5,500 per academic year in Direct Loan funds, which could be all subsidized, all unsubsidized, or a combination of subsidized and unsubsidized. In contrast, an independent undergraduate taking the same preparatory coursework could receive up to $12,500 per academic year, not more than $5,500 of which could be subsidized.

Loan limits for preparatory coursework and teacher certification coursework are not subject to proration (see Chapter 5 of this volume) if the coursework is less than a full academic year.

Combined Undergraduate and Graduate Programs

Some programs combine undergraduate and graduate study and allow a student to complete both a bachelor's degree and a graduate or professional degree within the same program. These are referred to as "dual degree programs." For instance, a school could offer a 5-year dual degree program leading to both a bachelor's degree and a graduate or professional degree, and could define the first three or four years of study as being at the undergraduate level, and the remaining year(s) of study as being at the graduate or professional level. A student may receive Direct Loans at the applicable undergraduate annual loan limits (as well as other Title IV aid at the undergraduate level) during the undergraduate portion of such a program, and then may receive Direct Loans at the graduate and professional student annual loan limit (and also Direct PLUS Loans) for the graduate and professional portion of the program.

See Volume 1 for more detailed guidance on student eligibility for Title IV aid in programs that combine undergraduate and graduate study, including programs that lead only to a graduate or professional degree, but may admit students who do not yet meet the regulatory requirements to be considered graduate or professional degree students.

Students Returning for a Second Baccalaureate Degree

If a student with a baccalaureate degree enrolls in another baccalaureate program, the student’s grade level for loan limit purposes would be based on the amount of work that the school counts toward satisfying the requirements of the new program. For instance, if your school accepts 30 semester hours of a student’s work in a previous baccalaureate program toward the requirements for a BS in Chemistry at your school and, on that basis, classifies the student at the second-year level, then the student would be eligible for second-year undergraduate loan limits (see “Loan limit when a baccalaureate or associate degree is required for admission to an undergraduate program” earlier in this chapter for the loan limit that applies when a student is required to have a prior associates or baccalaureate degree as a condition for being admitted to an undergraduate program).

Students Who Transfer From a Graduate Program to an Undergraduate Program During an Academic Year

If a student transfers from a graduate program to an undergraduate program in the middle of an academic year, the undergraduate annual loan limit for the student’s grade level applies, but amounts previously borrowed at the graduate level within the same academic year do not count against the undergraduate annual loan limit. However, the total amount awarded for the academic year may not exceed the higher (graduate or professional) annual loan limit.

Volume 8, Chapter 4, Example 1: Transfer From a Graduate to Undergraduate Program During the Same Academic Year

A student who received $10,250 in Direct Unsubsidized Loan funds for a fall semester loan as a graduate student enrolls in an undergraduate program at the same school in the spring semester of the school’s fall-spring academic year and is classified as a third-year independent undergraduate. As a third-year independent undergraduate, the student’s annual loan limit is $12,500, not more than $5,500 of which may be subsidized. However, the student may not receive the full $12,500, since that amount, when added to the $10,250 the student received as a graduate student in the fall, would exceed the $20,500 graduate or professional student annual loan limit. Therefore, the student’s maximum loan eligibility for the spring semester (if supported by COA and OFA) is $10,250, not more than $5,500 of which may be subsidized.

Increased Unsubsidized Annual Loan Limits for Certain Health Professions Students

There are higher annual Direct Unsubsidized Loan limits for certain graduate and professional health professions students. Schools may award the increased unsubsidized amounts to students who are enrolled at least half time in certain health professions programs. The programs must be accredited by specific accrediting agencies.

The programs that are eligible for the increased Direct Unsubsidized Loan amounts, the applicable increased unsubsidized loan amounts, and the approved accrediting agencies for these programs are shown in Tables 3A and 3B below. As shown in the tables, the increased unsubsidized loan annual limits vary by program and academic year length.

Volume 8, Chapter 4, Table 3A: Health Professions Programs Eligible for an Additional $20,000 or $26,667

Additional $20,000 in Unsubsidized Loans for an Academic Year Covering 9 months

Additional $26,667 in Unsubsidized Loans for an Academic Year Covering 12 months

Program
Approved Accrediting Agency

Doctor of Allopathic Medicine

Liaison Committee on Medical Education

Doctor of Osteopathic Medicine

American Osteopathic Association, Bureau of Professional Education

Doctor of Dentistry

American Dental Association, Commission on Dental Accreditation

Doctor of Veterinary Medicine

American Veterinary Medical Association, Council on Education

Doctor of Optometry

American Optometric Association, Council on Optometric Education

Doctor of Podiatric Medicine

American Podiatric Medical Association, Council on Podiatric Medical Education

Doctor of Naturopathic Medicine, Doctor of Naturopathy

Council on Naturopathic Medical Education

Volume 8, Chapter 4, Table 3B: Health Professions Programs Eligible for an Additional $12,500 or $16,667

Additional $12,500 in Unsubsidized Loans for an Academic Year Covering 9 months

Additional $16,667 in Unsubsidized Loans for an Academic Year Covering 12 months

Program
Approved Accrediting Agency

Doctor of Pharmacy

Accreditation Council for Pharmacy Education

Graduate program in Public Health (including Master's and Doctoral degree programs in Public Health)

Council on Education for Public Health

Doctor of Chiropractic

Council on Chiropractic Education, Commission on Accreditation

Doctoral Degree in Clinical Psychology

American Psychological Association, Committee on Accreditation

Master's or Doctoral Degree in Health Administration

Commission on Accreditation of Healthcare Management Education

The increased unsubsidized amounts that an eligible health professions student may receive are in addition to the regular $20,500 Direct Unsubsidized Loan annual loan limit for graduate and professional students. For example, a student enrolled in a 9-month Doctor of Dentistry program is eligible for the regular Direct Unsubsidized annual loan maximum for a graduate or professional student ($20,500 unsubsidized), plus the maximum increased unsubsidized amount of $20,000, for a total Direct Unsubsidized Loan maximum of $40,500 per academic year.

Graduate and professional students who qualify for the higher annual Direct Unsubsidized Loan limits are also eligible for a higher combined subsidized/unsubsidized aggregate loan limit, as explained later in this chapter.

Proration of the Increased Health Professions Annual Loan Limit for an Academic Year Covering 10 or 11 Months

Tables 3A and 3B above show the increased unsubsidized loan limits for programs with an academic year of either nine months or 12 months. For eligible health professions programs with an academic year covering 10 or 11 months, the annual additional unsubsidized loan limit must be prorated. If the academic year covers 10 or 11 months, the prorated annual loan limit is determined by dividing the applicable loan limit for an academic year covering nine months by nine, and then multiplying the result by 10 or 11. For example, the prorated increased unsubsidized loan limit for a Doctor of Dentistry program with an 11-month academic year would be $24,444, calculated as follows:

$20,000 ÷ 9 = $2,222.22

$2,222.22 x 11 = $24,444.42, rounded to $24,444

Foreign Schools May Not Award Increased Unsubsidized Loan Amounts

Foreign schools that participate in the Direct Loan Program may not award the increased Direct Unsubsidized Loan amounts to health professions students.

Aggregate Loan Limit Overview

As explained earlier in this chapter, there are limits on the maximum Direct Subsidized Loan and Direct Unsubsidized Loan amounts that a student may receive each academic year (annual loan limits). There are also limits on a student’s maximum outstanding total Direct Subsidized Loan and Direct Unsubsidized Loan debt. These are called aggregate loan limits. A borrower who has reached the aggregate borrowing limit for Direct Subsidized Loans and Direct Unsubsidized Loans may not receive additional loans. Once the loans are repaid, in full or in part, the borrower may apply for additional loans.

To ensure that a student doesn’t exceed the aggregate loan limits, the student’s FAFSA form data is matched with NSLDS, and if the student has exceeded or is approaching the aggregate loan limits, this will be noted in the ISIR. If a student transfers to your school, you must inform NSLDS so that it can begin the Transfer Student Monitoring process.

Aggregate Loan Limits for Direct Subsidized Loans and Direct Unsubsidized Loans

The aggregate loan limits for Direct Subsidized Loans and Direct Unsubsidized Loans are shown in Table 4 below.

Volume 8, Chapter 4, Table 4: Aggregate Limits for Direct Subsidized Loans and Direct Unsubsidized Loans

Total (Subsidized and Unsubsidized)

Maximum Subsidized

Dependent undergraduates (excluding those whose parents can’t get Direct PLUS Loans)

$31,000

$23,000

Independent undergraduates (and dependent undergraduates whose parents can’t get Direct PLUS Loans)

$57,500

$23,000

Graduate and professional students

$138,500

$65,500

Notes on the aggregate loan limits shown in Table 4:

  • The “Total (subsidized and unsubsidized)” column shows the maximum combined outstanding subsidized and unsubsidized loan debt for a student. The “Maximum subsidized” column shows the maximum portion of the combined subsidized and unsubsidized limit that may be subsidized. For example, a dependent undergraduate may have up to a maximum of $31,000 in combined subsidized and unsubsidized outstanding loan debt, but no more than $23,000 of this amount may consist of subsidized loans.

  • Capitalized interest (unpaid accrued interest that has been added to the principal balance of a loan) is not counted toward a borrower’s aggregate loan limits (see ”Checking Remaining Loan Eligibility Under Aggregate Loan Limits” below for more information).

  • The $138,500 combined subsidized and unsubsidized aggregate loan limit for graduate and professional students includes loans received for undergraduate study.

  • The $65,500 subsidized aggregate loan limit for graduate and professional students includes subsidized loans received for prior undergraduate study. For students who were enrolled in graduate or professional programs before July 1, 2012, it also includes any subsidized loans they received for prior graduate or professional study (subsidized loan eligibility for graduate and professional students was eliminated effective for loan periods beginning on or after July 1, 2012).

  • The loan amounts counted toward a borrower’s aggregate loan limits include any outstanding Direct Subsidized Loan and Direct Unsubsidized Loan amounts, and also any outstanding Subsidized and Unsubsidized Federal Stafford Loans previously borrowed under the FFEL Program (no new loans have been made under the FFEL Program since June 30, 2010).

  • In the case of a Direct Consolidation Loan or a Federal Consolidation Loan made under the FFEL Program, the outstanding amount of the consolidation loan representing any Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, or Unsubsidized Federal Stafford Loans that were paid off by the consolidation loan is counted toward the aggregate subsidized and unsubsidized loan limits accordingly.

Aggregate Loan Limit for an Undergraduate Student With a Graduate Degree

In some cases, a student who previously received undergraduate and graduate degrees returns to school to complete a second undergraduate program. Only the loans that the student received for the first undergraduate program are included in determining the student’s remaining eligibility for loans for the second undergraduate program, up to the undergraduate aggregate limits. Although loans received for graduate study are not counted toward a student’s undergraduate aggregate loan limit, the combined loan amounts received for undergraduate and graduate programs may not exceed the total allowable aggregate loan limits.

Volume 8, Chapter 4, Example 2: Returning to an Undergraduate Program After Receiving Loans for Graduate Study

An independent student has received the following loan amounts for a first undergraduate program and a graduate program:

Subsidized:

Unsubsidized:

Total

Undergraduate

$19,000

$26,000

$45,000

Graduate

$0

$86,000

$86,000

Total

$19,000

$112,000

$131,000

The student has now enrolled in a second undergraduate program. Only the loans received for the first undergraduate program are counted toward the student’s undergraduate aggregate loan limit. Because the total amount received for the first undergraduate program ($45,000) does not exceed the aggregate loan limit for an independent undergraduate ($57,500, maximum $23,000 subsidized), the student has remaining loan eligibility for the second undergraduate program.

The difference between the independent undergraduate aggregate loan limit and the total amount of the loans received for the first undergraduate program is $12,000. However, the student may not receive the full $12,000, because that amount, when combined with the amount received for the first undergraduate program and the amount received for the graduate program, would exceed the combined undergraduate and graduate aggregate loan limit of $138,500:

$45,000 + $86,000 + $12,500 = $143,500

Therefore, the student’s remaining loan eligibility for the second undergraduate program is $7,500 ($138,500 minus $131,000 already received for the first undergraduate program and the graduate program). Not more than $4,000 of this amount may be subsidized ($23,000 undergraduate subsidized aggregate loan limit minus $19,000 in subsidized loans received for the first undergraduate program).

Treatment of Direct Subsidized Loans and Direct Unsubsidized Loans Received for Teacher Certification Coursework or Preparatory Coursework

Students receiving Direct Loans for teacher certification coursework or for preparatory coursework (including preparatory coursework required for admission to a graduate or professional program) are considered to be undergraduates for all Title IV purposes. Therefore, Direct Subsidized Loans and Direct Unsubsidized Loans that a student receives for teacher certification coursework or preparatory coursework are counted against the student's undergraduate aggregate loan limits. (See Chapter 1 of this volume and the discussion earlier in this chapter for guidance on Direct Loan eligibility for teacher certification and preparatory coursework and the applicable annual loan limits.)

Higher Aggregate Loan Limit for Certain Health Professions Students

As explained earlier in this chapter, graduate and professional students who are enrolled in certain health professions programs are eligible for higher annual Direct Unsubsidized Loan limits. These students also have a higher combined subsidized and unsubsidized aggregate loan limit.

The combined subsidized and unsubsidized aggregate loan limit for graduate and professional health professions students who are eligible to receive the increased annual unsubsidized amounts is $224,000. Not more than $65,500 of this amount may be from subsidized loans (see the notes following Table 4 above regarding the $65,500 subsidized aggregate loan limit for graduate and professional students).

If a student who received increased Direct Unsubsidized Loan amounts for a qualifying health profession program later enrolls in a non-health professions program, the student is no longer eligible for the increased Direct Unsubsidized Loan limits. However, the additional loan amounts received for the health professions program are not counted toward the normal aggregate loan limit for that student.

Checking Remaining Eligibility Under the Aggregate Loan Limits

Before originating a Direct Subsidized Loan or Direct Unsubsidized Loan, it’s important to make sure the student still has remaining eligibility under the aggregate loan limits. As long as there is no conflicting information, you may rely on the financial aid history (provided on the ISIR as well as on the NSLDS Professional Access website) and the Transfer Student Monitoring process (for transfer students only) to tell you if a student is about to exceed the applicable aggregate loan limit. (See Volume 1, Chapter 3 for more detail on NSLDS financial aid history, which may also affect eligibility for other Title IV programs.)

The Loan History in NSLDS for a borrower who has received Title IV loans shows Aggregate Loan Information for the borrower’s outstanding subsidized and unsubsidized loans. The Subsidized and Unsubsidized Aggregate Outstanding Principal Balance amounts shown for a borrower in NSLDS do not include unpaid accrued interest, capitalized interest (unpaid interest that has been added to the principal balance of the loan), or other charges, as these amounts are not counted against the aggregate loan limits.

For each individual loan that a borrower has received, NSLDS shows both the Outstanding Principal Balance (OPB) and the Aggregate Outstanding Principal Balance (Agg. OPB). The OPB is what the borrower owes, which may include capitalized interest and other charges. The Agg. OPB is the portion of the OPB that counts against the aggregate loan limits for subsidized and unsubsidized loans.

For instance, suppose a student has a Direct Unsubsidized Loan disbursed in the amount of $5,000. Over time, $200 in interest accrues and is capitalized. Assuming that the borrower has made no payments on the loan, the OPB on the loan will be $5,200 (this is the amount the borrower owes), and the Agg. OPB will be $5,000 (this is the amount that is counted against the aggregate loan limit). If you are looking at information in NSLDS for individual loans, it is the Agg. OPB that you should use to determine the student’s remaining loan eligibility under the applicable aggregate loan limit.

The Subsidized and Unsubsidized Aggregate Outstanding Principal Balance amounts displayed in NSLDS for a borrower also include the outstanding portion of consolidation loans (both Direct Consolidation Loans and Federal Consolidation Loans made under the FFEL program) attributable to Direct Subsidized Loans, Direct Unsubsidized Loans, Subsidized Federal Stafford Loans, and Unsubsidized Federal Stafford Loans that were repaid by the consolidation loan.

Unallocated Consolidation Loan Amounts

NSLDS may also show a “Consolidation Loans, Unallocated” amount that is not counted against a borrower’s aggregate loan limits. The “Consolidation Loans, Unallocated” amount represents the portion of a consolidation loan that cannot be attributed to other loans in the borrower’s loan history. For example, it may represent capitalized interest or non-Title IV loans that were consolidated. You are not responsible for determining the origin of any unallocated consolidation loan amounts.

Treatment of Consolidated Perkins Loans and PLUS Loans

A consolidated Perkins Loan or PLUS loan becomes part of the unsubsidized portion of a consolidation loan, but it is not counted toward the borrower’s aggregate Direct Loan limits.

Effect of a Change in Student Status on Aggregate Loan Limits

In some cases, a student may qualify for higher loan limits, but then lose eligibility for the higher limits due to a change in status. One such situation is when a dependent undergraduate qualifies for additional Direct Unsubsidized Loan amounts because the student’s parent is unable to obtain a Direct PLUS Loan, but in a subsequent academic year the student’s parent qualifies for a Direct PLUS Loan. In this circumstance the dependent student no longer qualifies for the additional unsubsidized loan amounts at the higher independent undergraduate annual and aggregate loan limits. During any academic year when a dependent student’s parent qualifies for a Direct PLUS Loan, the student is subject to the dependent undergraduate annual and aggregate loan limits, but only loan amounts the student otherwise would have been eligible to receive under the dependent undergraduate annual loan limits are counted when determining the student’s remaining eligibility under the $31,000 combined subsidized and unsubsidized dependent undergraduate aggregate limit (see Example 3 below).

A similar situation occurs when a student who received loans for a graduate or professional degree program later returns to school and enrolls in an undergraduate program. The student is then subject to the undergraduate annual and aggregate loan limits, but only loan amounts the student previously received as an undergraduate are counted when determining the student’s remaining eligibility under the undergraduate aggregate loan limit (see Example 2 earlier in this chapter).

Volume 8, Chapter 4, Example 3: Aggregate Loan Limits and Additional Direct Unsubsidized Loan Amounts When Parents Are Unable To Obtain Direct PLUS Loans

A dependent student receives additional Direct Unsubsidized Loan funds (up to the additional amounts available to independent undergraduates) for the first three years of a four-year program because the student’s parent is unable to obtain a Direct PLUS Loan for each of those years.

For each of the first three years, the student receives the maximum subsidized and unsubsidized loan amounts under the independent student annual loan limits(remember that the annual subsidized maximums are the same for dependent and independent undergraduates):

First Year (independent student loan limit)

$3,500 subsidized

$6,000 unsubsidized ($4,000 more than dependent maximum)

Second Year (independent student loan limit)

$4,500 subsidized

$6,000 unsubsidized ($4,000 more than dependent maximum)

Third Year (independent student loan limit)

$5,500 subsidized

$7,000 unsubsidized ($5,000 more than dependent maximum)

Total

$13,500 subsidized

$19,000 unsubsidized ($13,000 more than dependent maximum)

In the fourth year, the parent is eligible to borrow a Direct PLUS Loan, so the student is then subject to the annual and aggregate loan limits for a dependent undergraduate. The dependent student received a total of $13,500 in Direct Subsidized Loan funds and $19,000 in Direct Unsubsidized Loan funds ($32,500 combined subsidized and unsubsidized total) for the first three years when the student’s parent was unable to obtain Direct PLUS Loans. These are the same amounts that an independent student who qualified for the maximum annual loan limit each year could have received. If the student’s parent had been able to receive Direct PLUS Loans during each of the first three years and the student received the maximum subsidized and unsubsidized loan amounts under the dependent student annual loan limits, the total loan amounts received would have been $13,500 in Direct Subsidized Loan funds and $6,000 in Direct Unsubsidized Loan funds ($19,500 combined subsidized and unsubsidized total).

Because the combined subsidized and unsubsidized loan amount of $32,500 that the student received for years one through three exceeds the $31,000 dependent undergraduate aggregate loan limit), it might appear that the student would have no remaining loan eligibility for the fourth year of the program. However, only the $19,500 in combined subsidized and unsubsidized loan funds that the student could have received under the dependent student annual loan limits are counted against the $31,000 aggregate, leaving the student with $11,500 in remaining loan eligibility under the dependent undergraduate aggregate loan limit, not more than $9,500 of which may be subsidized. Therefore, in the fourth year of the program (when the student’s parent is eligible to receive a Direct PLUS Loan), the student could receive up to the full combined subsidized and unsubsidized annual loan limit for a dependent fourth-year undergraduate (that is, $7,500, not more than $5,500 of which may be subsidized).

Last Modified: 07/24/2024 • Published: 07/26/2023