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How do people rack up those huge college loans? | Haven Financial Solutions, Inc.
Recently over lunch and some very good small batch cider, a colleague asked me, How on earth do people rack up these big loans when there's a limit on federal loans? It was a very good question: I've seen some humongous student loan debt, but I decided to go back over client profiles to really check out where it all came from. First, some basics; as an undergraduate, you have six options for borrowing to pay the cost of attendance: Direct Subsidized Loans These are available for undergraduates who can demonstrate financial need. The borrowing limit on these is $3,500 freshman year; $4,500 sophomore year; and $5,500 for junior year and beyond. So, in four years you could borrow $19,000, and theoretically if your program is 4 years, you can borrow up to 6 years if it takes you that long: $30,000. Direct Unsubsidized Loans $5,500/$6,500/$7,500. If you've qualified for subsidized loans, these are the upper limits for total amounts. So if you qualified for $3,500 in subsidized loans in