How to Avoid Reaching Your Student Loan Limit) 5/23/2013 <p><strong>Did you know there is a limit on how much you can borrow in student loans? </strong>Unfor

How to Avoid Reaching Your Student Loan Limit

Did you know there is a limit on how much you can borrow in student loans? Unfortunately, many people don't know these loan limits exist until it's too late.

credit card limit

Before we talk about how to avoid reaching this limit, let's start with making sure you understand what loan limits are.

Most people are familiar with credit card limits. When you reach your credit card limit (often known as maxing out your card), you are required to pay down your principle before you can use the card again. It's similar with students loans; once you've borrowed a certain amount, you can't borrow more until you pay some back. If you're relying too heavily on federal loans, this could leave you unable to afford your education and stuck with unmanageable amounts of debt.

Now, let's discuss the details and how to avoid this situation by practicing responsible borrowing.

Annual and Total Loan Limits: How Do I Know What They Are?

The federal government limits the total amount of subsidized and unsubsidized loans a student can borrow at one time – this is known as a total or aggregate loan limit. If you previously attended college and took out federal loans that you have not yet repaid, those loans will count toward your total loan limit. To check your prior federal student aid history and previous loans, visit the National Student Loan Data System at

There is also an annual loan limit on the amount of loans you can borrow in one academic year. Total and annual loan limits depend on your year in school and whether you are dependent or independent student. You can see the annual and total loan limits that apply to you at If you're a current student, you can also contact your Student Finance Counselor to learn more.

How to Avoid Reaching These Limits

When you discuss your financial aid package with your Student Finance Counselor, make sure you understand your loan limits and try not to rely solely on federal loans.

Here are just a few tips that can help you avoid reaching these limits.

Find alternative ways to finance your education, such as scholarships and grants. There are many scholarships and grants out there, so don’t be afraid to apply. They can make a big difference in your financial plan!

Ask your employer if they are willing to help sponsor your education. This is usually only an option if your desired degree will allow you to gain skills relevant to your work.

Make regular cash payments. Even if these payments are as small as $20 per month, you can reduce the amount you need to borrow and the interest you’ll pay in the future.

• Only accept the aid that you truly need. You do not have to take the full amount of federal aid for which you are eligible, and you should not use these loans for expenses outside of your education.

Stay committed to completing your education in a timely manner. Having to re-take a class will end up costing you extra.

When you create a plan for paying for your degree, think about your long-term financial future. Remember, having to make large monthly payments on your student loan debt will limit what you can spend in the future on large purchases, such as your house or your car, and even daily expenses. Making the right choices today will help you tomorrow.

Related Post: How to Save Money and Finance Your Education Responsibly

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