What is the Maximum Stafford Loan?

Mary McMahon

Recipients of federal Stafford Loans are subject to lending limits. The limits vary depending on student status, terminal degree, and in some cases what the student studies. They also are periodically adjusted for inflation and rising education costs. The maximum Stafford Loan information listed below is current as of 2009; students may want to contact the Department of Education or their financial aid office to confirm these limits.

A student loan and financial aid application.
A student loan and financial aid application.

For students who are considered dependent, the maximum Stafford Loan amount in the first year is $5,000 United States dollars (USD), up to $3,500 USD of which may be subsidized. In the second year, the limit goes up to $6,500 USD, $4,500 USD of which may be subsidized. In the third year and above, students can borrow up to $7,500 USD, with a subsidized loan limit of $5,500. The lifetime lending limit on dependent undergraduates is $31,000 USD, $23,000 of which may be subsidized.

Repayment on student loans generally begins shortly after graduation.
Repayment on student loans generally begins shortly after graduation.

Independent undergraduates have a maximum Stafford Loan of $9,500 USD in the first year, $3,500 USD of which can be subsidized. The limit increases in the second year to $10,500 USD, with up to $4,500 USD subsidized, and in the third year to $12,500 USD with $5,500 subsidized. The lifetime maximum Stafford Loan for independent undergraduates is $57,500 USD, of which $23,000 is allowed to be subsidized.

Graduate and professional students are allowed a larger maximum Stafford Loan, recognizing the fact that they spend more time in school, and that school can be very expensive. They can borrow up to $20,500 annually, with up to $8,500 USD being in the form of subsidized loans, unless they are in medical school, in which case they are allowed $40,500 annually, with a limit of $8,500 in subsidized loans. The lifetime cap for graduate and professional students is $138,000 USD with $65,000 subsidized, while people in the medical profession can take out up to $224,000 in Stafford Loans, with a maximum of $65,000 of that amount in subsidized loans.

Students who are concerned that the maximum Stafford Loan limits will not allow them to finance their education can explore other types of education loans. Students should also be aware that their financial aid office may not recommend borrowing the full amount a student is allowed under the maximum. This is in part due to concerns that a student could hit the lifetime limit before graduating, and because financial aid offices are concerned about the burden of repayment; signing a promissory note for a $12,500 loan for a year of school may seem rather abstract to college students, for example, until they start getting the bills after graduation.

Students who have difficulty repaying their loans have a number of options, including a negotiation for reduced payments and a temporary suspension of payments due to hardship. Stafford Loan forgiveness is also an option for people in certain professions.

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