Private Student Loans: How Much Can I Get

Q: I know that I am supposed to take out federal student loans first and apply for FAFSA, which I plan on doing, but I just know given my parents income range that it won’t be enough student loans to pay for what I need. I will have to take out private student loans, so how much is the max I can take out in private student loans?

A: For most private student loans, the amount a student can borrow in private student loan funds is based on their cost of attendance, less other college financial aid, but no more than the amount certified by their college or university. Each student has a “cost of attendance” (COA), with this amount calculated, the financial aid officer can subtract off any grants, scholarships, and/or federal student loans you will be receiving and determine what amount of private student loans you are in need of. Private student loans can also be used for educational related expenses, and if you have a good credit score (or a creditworthy cosigner) you should be able to secure a private student loan to cover the remainder of your educational costs after FAFSA.

When borrowing private student loans, it is important to never borrow more than you absolutely need to cover your college expenses. Private student loans can come with high interest rates, and few repayment plan options, which is why it is important for borrowers to use these loans responsibly. Most college financial aid experts recommend that students never borrow more in student loans (private student loans and federal student loans) than they expect to earn their first year in the workforce after college graduation.