How to Determine How Much You Can Borrow on a Student Loan. There are numerous factors that play into how much you can borrow on a student loan. These factors include what kind of loan you get, your status as a dependent and what level of college you are entering. These steps will help you figure out just how much you can borrow on a student loan.

Research the type of student loan for which you are applying. Private loans will have specific rates and terms based on the financial institution and your credit history. Federal student loans are available to students based on financial need. Stafford loans are available to all students, while Perkins loans are available to low-income students.

Know that federal loans have a capped amount that each student can borrow. The cap for a Perkins loan is $4000 per year and $20,000 for your entire undergraduate education. The cap for a Stafford loan fluctuates depending on what year you are in school. A first year student can borrow up to $2,625 in Stafford loans, and that borrowing power increases for every year of college completed. By the student's senior year, they can borrow $5,500 in subsidized loans. The total amount you can borrow for a Stafford loan if you are independent is $46,000 and $23,000 if you are a dependent.

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If you are a dependent--meaning you are under 24, not married and have no children of your own--you can borrow less money than if you were independent. Dependent students can usually only borrow the equivalent to the cap on subsidized loans. An independent student can borrow up to the full amount of the cap on subsidized loans and still get a few unsubsidized loans.

The amount of money also depends on your family's expected contribution to your education. This is the amount of money your parents are supposed to kick in to help you through college. This is determined when your parents fill out their FAFSA form each year.


Students need not reapply for student loans each year. If you have a subsidized loan, you usually can't borrow the entire cost of your education. With an unsubsidized loan you can borrow $4,000 to $5,000 more that subsidized loans every year. Most people reach the cap on subsidized loans and switch over to unsubsidized loans to make up the difference. Your borrowing power depends on three key elements: whether you choose a subsidized or unsubsidized loan, your status as a dependent and what level of schooling you are in. Unsubsidized loans allow you to borrow more money, but they also require you to pay the interest while you are in college. Independents can borrow nearly twice as much as dependents, based on the fact that it is expected that dependents' families will be footing some of the bill. You can borrow more money as you progress through college. The extra money is to offset costs such as housing and food.

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