Annual and Aggregate Loan Limits (2024)

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 annual loan limits for borrowers 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.

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 could receive up to the full $5,500 in Direct Unsubsidized Loans.

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 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 could 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.

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 other exceptional circ*mstances that would prevent a parent from borrowing a Direct PLUS Loan.

Note that 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, if you determine that exceptional circ*mstances other than adverse credit would preclude the parent from borrowing and document the basis for the student’s eligibility. 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 circ*mstances include, but are not limited, to the following:

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 circ*mstances, 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 circ*mstances 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.

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.

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’s 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/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.

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.

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.

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.

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

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

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/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.

Tables 3A and 3B above show the increased unsubsidized loan limits for programs with an academic year of either 9 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

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 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.

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/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).

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/unsubsidized aggregate loan limit.

The combined subsidized/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.

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 in NSLDS) and the Transfer Student Monitoring process to tell you if a student is about to exceed the aggregate loan limits. (The NSLDS financial aid history may affect eligibility for other Title IV programs, so it is discussed in more detail in Volume 1, Chapter 3.)

The Loan History shown 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 Aggregate Loan Information subsidized and unsubsidized Outstanding Principal Balance amounts shown in a borrower’s NSLDS loan history 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 the individual loans as displayed in the student’s NSLDS Loan Detail, it is the Agg. OPB that you should use to determine remaining loan eligibility under the aggregate loan limits.

The Aggregate Loan Information subsidized and unsubsidized Outstanding Principal Balance amounts shown in a borrower’s NSLDS loan history 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.

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 increased 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 is able to qualify for a Direct PLUS Loan. The dependent student then loses eligibility to receive Direct Unsubsidized Loans at the higher independent undergraduate annual and aggregate loan limits, and is once again subject to the dependent undergraduate annual and aggregate loan limits. However, the increased unsubsidized loan amounts that the student previously received as a result of the parent’s inability to obtain a Direct PLUS Loan are not counted against the dependent undergraduate aggregate loan limit (see Example 5 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. In this case, loan amounts that the student received as a graduate or professional student are not counted against the undergraduate aggregate loan limit (see Example 4 earlier in this chapter).

A dependent student is treated as an independent student for loan limit purposes and 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 amount and the maximum additional unsubsidized amount under the independent student annual loan limits (remember that the annual subsidized maximums are the same for dependent and independent undergraduates):

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. Although it might appear that the student would have no remaining loan eligibility for the fourth year of the program (because the total subsidized/unsubsidized loan amount received for years 1-3 ($32,500) exceeds the $31,000 dependent undergraduate aggregate loan limit), the additional Direct Unsubsidized Loan amount that the student received as a result of the parent Direct PLUS Loan denials in the first three years of the undergraduate program does not count against the $31,000 dependent aggregate limit.

The student received a total of $19,000 in additional Direct Unsubsidized Loan funds for the first three years ($6,000 each in years 1 and 2, and $7,000 in year 3). As shown above, this is $13,000 more than the total additional Direct Unsubsidized Loan amount the student would have been eligible to receive under the dependent student annual loan limits if the student’s parent had qualified for Direct PLUS Loans (dependent undergraduates normally can only receive up to $2,000 each year in additional Direct Unsubsidized loan amounts). The extra $13,000 in unsubsidized funds that the student received as a result of the parent being unable to obtain a Direct PLUS Loan for the first three years is not counted against the $31,000 dependent undergraduate aggregate when determining the student’s loan eligibility for year 4. The $13,000 is subtracted from the total $32,500 the student received for the first three years, leaving only $19,500 that counts against the $31,000 dependent undergraduate aggregate loan limit. This means that for year 4, the student has $11,500 in remaining eligibility under the $31,000 aggregate loan limit (not more than $9,500 of which may be subsidized) and is eligible to receive up to the full annual loan limit for a dependent fourth-year undergraduate: $7,500 (maximum $5,500 subsidized).