Quick Stafford Loan Limit Question

Paying for College
1

<p>Loan limits, both for undergraduate and graduate level are based upon the amounts disbursed, correct? Depending of course upon the category you fall in. They don't include accrued interest do they? I've seen a couple of posts recently that appear to imply that it's possible to take out too much in undergraduate loans, making a student unable to take out graduate schools (Note; I'm not talking about those extremely rare cases in which the student's school over-awards for undergrad and the student has to pay back the overage before they can get their graduate loan limit, and to be truthful I don't see how a school can even do that, but I hear it happens). I first I thought these posts were referring to not being able to manage the loan repayment with the accrued interest and that's a valid consideration, but now I'm wondering and want to make sure as daughter is considering graduate school and has about $21,000 in undergrad loans, both subsidized and unsubsidized. </p>

<p>And now I'm wondering why she has any unsubsidized loans at all since she's not over the $23000 sub limit and she was always a EFC 0 kid. </p>

<p>Thinking back, I think her 1st 2 years, she didn't accept the full subsidized amount (and no unsub) because it seemed the school's COA was a little excessive and she could manage without it. Then she graduated and transferred to a university where she needed her full subsidized loan and maybe some unsub. If you don't use your full subsidized amount, I'm guessing it won't carry over to the next year, even if you stay full need? Does that sound right? I'm trying to help her get the loans organized and setup for repayment the best way possible for her now, which is the IBR plan. But that of course is going to accrue interest, will this affect her grad school funding? (barring political changes of course)</p>

<p>My thought is to have the payments set as low as possible to make sure she can afford them, the income is very erratic right now and then myself or any other family member that's so inclined can send some extra in if they want. I assume you have to pay the minimum but can play more if you want to?</p>

2

<p>

The annual limits are year by year. Unused loan eligibility does not carry forward to the next year. So if a freshman is has sufficient need to be offered the full $3,500 freshman sub loan eligibility but takes only $2,500, this does not change his eligibility for sub loans his sophomore year, that $1,000 does not carry forward. The maximum sophomore sub eligibility is still $4,500 (assuming at least $4500 need). If the student needs $5,500 that year, the additional $1,000 would be unsubsidized. </p>

<p>I don’t really understand how it is possible for a student to take out too much in undergraduate loans, making a him/her unable to take out graduate schools. The aggregate limit for a dependent undergrad student is $31,000, and for an independent undergrad student $57,500. For a grad student the aggregate limit is $138,500 (which includes whatever they had from undergrad).</p>

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<p>I don’t really understand how it is possible for a student to take out too much in undergraduate loans, making a him/her unable to take out graduate schools</p>

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<p>I have seen it happen to students who get interest breaks then don’t follow through in doing whatever it was that got them the interest rate break (like auto-debit) — they then have to pay back whatever the break was, and it adds to the loan amount. I don’t quite understand it, but I know it happens because I saw it quite a few times.</p>

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<p>Oh, that kinda sorta makes sense. A little bit. Once they pay it down to within undergrad limits, are they then eligible for grad loans?</p>

5

<p>Yes. It’s pretty easy to take care of, but it can be a pain … we had students who would pay it off, then it would happen again!</p>