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Student Loans

How Much Can You Take Out in Private Student Loans?

When you reach the federal student loan limit, you’ll probably need to rely on private student loans for any additional funding needs. But how much can you borrow?

That answer varies by lender, but private student loan limits are generally based on a total loan amount ranging from $75,000 to $120,000 for undergraduate students and $150,000 to $300,000 for graduate or professional students.

Read on for more information about private student loan limits, along with some strategies to calculate the right amount to borrow.

In this guide:

What are the limits on private student loans?

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

They’ll also look at how much you’ve already taken out in federal and private student loans. In general, students who have already borrowed money for school will receive less than those who have not.

Limits are usually higher for graduate and professional students because these degrees cost more and usually result in higher salaries after graduation.

Private lenders typically have annual and aggregate loan limits. The maximum annual limit can range from $15,000 to the annual cost of attendance, depending on the lender and your personal criteria. The annual amount you receive will be divided between the two semesters.

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

>> Read More: Student loan limits

How much should I take out in private student loans?

When it comes to student loans, there’s a difference between how much you can borrow and how much you should borrow. While many lenders will let you borrow the entire annual cost of attendance, this may be more than you can afford to repay.

A basic 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.

You can use sites like 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 US Department of Education. Search for your school and look at the starting salaries.

If you know the general area where you want to work after graduation, you can look up salary information for that region. The more specific you get, the less chance that you’ll borrow more than you can easily afford.

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

It’s even more crucial to stick to these basic guidelines when taking out private student loans, as they have fewer options for struggling borrowers. Private student loans do not offer income-driven repayment plans or loan forgiveness options as federal loans do, and they also have shorter forbearance programs with no pause on interest accrual. That means your loan balance could balloon if you defer private student loan payments.

If you’re having trouble affording your private student loans, the only option may be refinancing to a longer repayment term. But doing this will often result in paying a higher total interest over the life of the loan.

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, write down how much you need to live on for the semester, including the cost of tuition, books, fees, and supplies. Then, write down how much your room and board, rent, utilities, internet, and cell phone will cost. Finally, estimate how much you’ll spend on variable expenses like groceries, gas, clothes, and entertainment. Subtract any grant aid, contributions from savings, earnings, parents, or other relatives. Subtract any Federal loans, tax credits such as the American Opportunity or Lifetime Learning credit, and then net all those figures to estimate the amount you’ll need to borrow.

To determine if you can afford to pay the loan back, create a proposed budget using your after-graduation starting monthly salary and then subtract taxes, healthcare, rent, food, transportation, insurance, travel, and entertainment. See if you can still comfortably pay your loan payments. You can also use some important ratios that determine financial health. The long-term debt coverage ratio is annual gross income divided by annual debt payments. This ratio should be over 2.5. If it is lower, you might have trouble repaying your loans.

Your student loans should only be used to cover necessary expenses—not spring break trips or concert tickets. You’ll have to repay every dollar that you borrow and spending frivolously in college will come back to bite you after graduation.

How to lower the amount you need in student loans

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

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