How Much Can You Take Out in Private Student Loans? Limits and Smart Strategies

Wondering how much you can actually borrow with a private student loan? You’re not alone—and the answer depends on a few factors, like your lender, degree program, and financial profile.

While some lenders may let you borrow enough to cover your full cost of attendance, it doesn’t mean you should. In this guide, we’ll break down how much private student loan money you might be eligible for—and how to figure out the right amount to borrow so you’re not drowning in debt later.

Table of Contents

1. What are the limits on private student loans?
2. Step-by-step: How to calculate what you actually need to borrow
3. How to lower the amount you need in student loans

What are the limits on private student loans?

Limits for private student loans are different from those for federal loans. Private lenders use factors such as your income, credit score, current major, future projected income, and whether you have a cosigner to determine how much to lend you.

Most private lenders have annual and aggregate loan limits—the total amount you’re allowed to borrow across all years of school, including federal and private loans.

Here are several lenders’ maximum annual limits:

Lender	Limits
College Ave	$1,000 – 100% of certified costs
Sallie Mae	$1,000 – 100% of certified costs
Earnest	$1,000 – 100% of certified costs
Ascent	$2,001 – $200,000

Lenders’ maximum aggregate limits often range from $75,000 to $120,000 for undergraduate students and $150,000 to $300,000 for graduate or professional students.

The aggregate limits consider how much you’ve already taken out in federal and private student loans. Students who have already borrowed money for school tend to be eligible for less than those who haven’t yet borrowed.

Step-by-step: How to calculate what you actually need to borrow

The amount you can borrow might be much higher than the amount you should borrow. Your school’s annual cost of attendance—the full estimated cost of going to school for one year, including tuition, fees, room and board, books, supplies, and personal expenses—may be more than you can afford to repay.

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Tip

One rule of thumb is not to borrow more than you’ll earn in your first year out of college. If you exceed that amount, you may find it difficult to repay your student loans on top of other bills.

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You can use Payscale or the official Bureau of Labor Statistics wage data site to find the average starting salary for your profession. The website CollegeSimply reports data on starting salaries the colleges themselves report to the U.S. Department of Education. Search for your school, and look at the starting salaries.

If you know where you want to work after graduation, you can look up salary information for that region. The more specific you are, the less likely you are to borrow more than you can easily afford.

You should also consider whether you will attend graduate or professional school after earning an undergraduate degree. If so, you should factor in those costs when deciding how much to borrow for your bachelor’s degree.

Keep in mind that private student loans offer fewer options for struggling borrowers than federal loans—for example, you’re not likely to qualify for income-driven repayment plans or loan forgiveness options for private student loans.

Calculate how much you can afford in student loans

Before taking out a private student loan, you should determine both how much you might need to borrow and whether you can afford to pay the loan back.

To find out how much you might need to borrow, calculate the following:

1. How much you need to live on for the semester. This should include the cost of tuition, books, fees, and supplies.
2. How much your room and board, rent, utilities, internet, and cellphone will cost for the semester.
3. How much you expect to spend on variable expenses, such as groceries, gas, clothes, and entertainment, that semester.
4. Add up the amounts above, then subtract any grant aid, contributions from savings, or earnings you can apply to this semester’s education costs.
5. Next, subtract any federal loans or tax credits such as the American Opportunity or Lifetime Learning credit.

This should give you an estimate of the amount you’ll need to borrow for the semester.

Federal vs. private student loan limits

	Federal	Private
Annual limit	$5,500 – $12,500 for undergrads	Often up to full certified cost of attendance
Aggregate limit	$31,000 (dependent students), $57,500 (independent students)	$75,000 – $120,000 (undergrad); up to $300,000 (grad/professional)
What to know	Come with fixed interest rates, income-driven repayment, and forgiveness programs	Rates, terms, and repayment flexibility vary widely by lender

Calculate your loan repayment

To determine whether you can afford to pay the loan back, create a proposed budget using your expected postgraduation starting monthly salary.

Subtract the following expected monthly amounts:

• Taxes
• Healthcare
• Rent
• Food
• Transportation
• Insurance
• Travel
• Entertainment

See whether you expect to make your loan payments comfortably. You can also use other important ratios that determine financial health. For example, the long-term debt coverage ratio is:

Annual gross income / Annual debt payments

This personal finance metric shows how well your income can cover your annual debt payments. A ratio above 2.5 is considered financially healthy. If it’s lower, you might have trouble repaying your loans.

You should only use your student loans to cover necessary expenses—not spring break trips or concert tickets. You’ll need to repay every dollar you borrow with interest, so try to avoid spending frivolously.

How to lower the amount you need in student loans

Take advantage of scholarships and grants to minimize your private student loan burden. Ask your college advisor about any awards you may be eligible for, and look online for scholarships that fit your major and interests.

A part-time job can also help you cover expenses and minimize the need for loans. Try to find a gig that comes with extra cost-of-living benefits, such as waiting tables at a restaurant with free shift meals or working as an RA for free or reduced housing.

Before applying for a private student loan, use our student loan calculator to estimate your monthly payments and long-term costs. It’s one of the best ways to avoid overborrowing and build a repayment plan that fits your future budget.

When you’re ready to begin your search, we recommend starting with our list of the best private student loans.