Did you know that federal financial aid has both annual and lifetime limits? It’s true! So, before you run out of federal aid each semester (or permanently), make sure you know what your limits are!
Federal financial aid is designed to be a supplement to pay for school, but it’s not necessarily intended to cover every expense that a student may have. Therefore, planning ahead, knowing what aid you’re eligible for, and understanding how much you may need to pay for school out of pocket before fees are due is critical. It won’t always be covered 100% by federal aid.
Every student is offered a different aid package based on their financial situation and each type of aid you are eligible to receive has different annual limits. You should submit a FAFSA and send it to your school each year to avoid delays in receiving aid. A FAFSA is also typically required when applying for scholarships within your college or university- especially if the scholarship requires that you demonstrate financial need, so it’s a good idea to submit it early. You can check annual limits for federal aid on the Federal Student Aid website. The Aid at a Glance page is a great way to find available financial aid types, descriptions about awards, and annual limits.
According to the Federal Student Aid website, the current lifetime loan limit for dependent undergraduate students is $31,000 and for independent undergraduates, it is $57,500. For graduate students, the lifetime limit is currently $138,500. While this seems like plenty of money, it can add up very quickly. It’s important to know what your aid limits are, and the amount of money you’ve borrowed, so that you can manage your money effectively.
While private loans are an option for students who run out of federal funds, I personally do not endorse using private loans. Private lenders do not necessarily have to follow the same rules that the federal government does and it makes me nervous to take out private loans. Instead, I recommend making sure that you stay within your federal loan limits and pay out of pocket for school as much as possible. Knowing your limits each year is the best way to make sure that you are balancing your budget!